(Reuters) - Shares of Foot Locker ( FL ) slumped about 27% on Wednesday after the retailer projected 2024 profit below Wall Street expectations, hurt by a planned ramp-up in investments across its business to boost demand.

Despite a solid holiday quarter, Foot Locker ( FL ) said it would achieve its long-term profit margin target two years later, in 2028, dashing hopes of a steady recovery in margins, which have been crimped due to a surge in promotions.

Shares of the New York-based company, which were last trading at $25.13, were set to more than give up the gains made over the past three months.

The company, which is in the midst of a revamp announced in March last year, said its "Lace Up" strategy has improved its digital business and driven more full-price sales, even as it had to mark some prices down to clean up inventories.

Chief Financial Officer Mike Baughn said the company was not resuming a dividend and anticipates "another year of significant investment (in 2024)," signaling that lower discounts would also chip away at demand early in the year.

"It will take some time to transition consumer expectations away from those higher promotional levels ... We therefore expect to see (on-going margin) pressure through the first quarter."

The company projected full-year adjusted earnings between $1.50 and $1.70 per share, while analysts, on average, expected a profit of $1.93, according to LSEG data.

CFRA Research analyst Zachary Warring downgraded the stock's rating to "strong sell" from "sell".

"Foot Locker ( FL ) has not proven it can grow top or bottom-line consistently in this new retail environment of direct-to-consumer," Warring said in a note.

However, steady demand for sneakers, including Nike's Air Force 1's, Dunks, Adidas AE 1 shoes and New Balance sneakers, prompted the retailer to project full-year same-store sales growth of 1% to 3% above market estimates of a 0.7% rise.