KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
Shares of Foot Locker Inc fell sharply after the company slashed its full-year sales and profit forecasts, citing increased discounting and reduced consumer spending ahead of the critical holiday season.
Weaker Consumer Spending and Sales Shortfall
Foot Locker’s CEO Mary Dillon noted that U.S. shoppers have become more selective, seeking better deals, which weighed on the company’s performance and undermined its turnaround efforts.
“The consumer is being choosy, picky, and smart, trying to find the best deals they can find,” Dillon said in an interview, adding that the increasingly promotional environment has prompted a more cautious outlook.
Key highlights:
- Comparable Store Sales: Rose 2.4% in Q3, below analyst expectations of 2.8%.
- Full-Year Sales Forecast: Anticipates a decline of up to 1.5%, a 0.5 percentage point downgrade from prior guidance.
- Earnings per Share Guidance: Lowered to $1.20-$1.30 from a previous high of $1.70.
Market Reaction
The company's shares plunged about 14% in premarket trading on Wednesday and have fallen 22% year-to-date as of Tuesday’s close.
Turnaround Efforts
Dillon, who has been CEO for just over two years, is working on a broad transformation strategy, which includes:
- Store Renovations: Overhauling a significant portion of the store network.
- Rewards Program: Strengthening customer engagement.
- Digital Upgrades: Revamping its online operations.
Rebuilding Nike Partnership
A key focus of the turnaround is restoring Foot Locker’s relationship with Nike Inc., which had previously prioritized its direct-to-consumer channels. The companies collaborated on a new in-store basketball section, Home Court, which Foot Locker plans to expand to 100 stores globally by 2026.
Footwear Outperforming Apparel
Dillon highlighted stronger performance in the footwear segment, driven by brands like Adidas, Nike, Hoka, Asics, and Ugg, while apparel sales lagged.
Consumer Trends
- Back-to-School Slowdown: Spending dipped after the August back-to-school period.
- Thanksgiving Rush: Sales picked up during the Thanksgiving shopping period.
Outlook
Despite pockets of strength, Foot Locker faces significant challenges as it navigates a cautious consumer environment and heightened competition. Investors will closely watch whether Dillon’s strategic initiatives can offset the headwinds as the company heads into the holiday season.
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