Sportswear retailer Foot Locker reduced its forecast for the drop in sales this year after a stronger than expected Thanksgiving holiday.
The company said that sales are down because of "ongoing consumer softness," but it narrowed its forecast for drop of 8% to 8.5% in the fiscal year that ends in February 2024. Previously, the outlook was of a contraction of 8% to 9%.
"We are updating our outlook to reflect the momentum we have in our strategic initiatives into the fourth quarter, which includes strong results over the Thanksgiving week period, against the backdrop of ongoing consumer uncertainty," Chief Executive Officer Mary Dillon said in the earnings statement. "We look forward to rounding out our reset year and building on our progress in 2024 and beyond, and we are confident we are on the right path to delivering longer-term shareholder value."
The National Retail Federation said Tuesday that the number of people shopping during the Thanksgiving weekend, or the period from Thanksgiving through Cyber Monday, rose to a record 200.4 million. The number was above NRF's expectation of 182 million.
Foot Locker expects to end the fiscal year with inventories flat or slightly down.
The company shares rose in premarket hours after the announcement of the new outlook.
Foot Locker is betting on a new agreement to be the National Basketball Association's official marketing partner in the U.S. to engage with the sport's fans and boost sales.
The retailer also said it's entering India in 2024 through licensing agreements with local operators Metro Brands Limited and Nykaa Fashion.
"These agreements will enable Foot Locker to efficiently access the large and growing sneaker market in India, consistent with the Company's efforts to strategically pursue growth opportunities in new markets, expand sneaker culture globally and bring Foot Locker's elevated, multi-brand experiences and strong vendor partnerships to even more people around the world," Foot Locker said.