09:14 AM EDT, 08/28/2024 (MT Newswires) -- Foot Locker ( FL ) swung to a fiscal second-quarter loss year over year while the footwear retailer slashed its full-year gross margin outlook.

The company now anticipates gross margin to be in a range of 29.5% to 29.7% for fiscal 2024, compared with its previous forecast of 29.8% to 30%. The company cited "promotional pressure" globally and in the WSS brand for its revised guidance. Shares of the company fell 8.3% in Wednesday's premarket activity.

The downward trend in the share price is likely due to a "combination of the stock's strong rally heading into the print" and the decrease in gross margin outlook, Wedbush Securities said in a client note.

Foot Locker ( FL ) kept its per-share adjusted earnings guidance unchanged at $1.50 to $1.70 for the ongoing fiscal year, while the current consensus on Capital IQ is for $1.54. The retailer also continues to project sales to be in a range of a 1% decrease to a 1% gain and comparable sales to be up 1% to 3% for the year.

For the three-month period ended Aug. 3, the company posted an adjusted loss of $0.05 a share versus earnings of $0.04 per share the year before. The Street was looking for a normalized per-share loss of $0.07. Sales rose 1.9% year over year to almost $1.9 billion, just ahead of the market's $1.89 billion estimate. Sales took a non-recurring hit of $11 million related to the launch of the retailer's enhanced rewards program in the US.

Comparable-store sales increased 2.6%, while five analysts polled by Capital IQ expected a rise of 1%. Gross margin expanded by 50 basis points on a yearly basis. During the quarter, the company closed 31 stores and opened 5 new locations.

"The Lace Up Plan is working, as evidenced by our return to positive total and comparable sales growth as well as gross margin expansion in the second quarter," Chief Executive Mary Dillon said in a statement. "Our top line trends strengthened as we moved through the quarter."

"We are encouraged by the company posting its first positive (comparable sales) since 2022, and the fact that this was the first time in almost three years that they posted positive comps and gross margin expansion simultaneously," Wedbush analysts led by Tom Nikic wrote in the note. However, the brokerage remains in a "wait-and-see" mode on the company amid a challenging macro environment, among other factors.

Foot Locker ( FL ) plans to shut down or transfer operations of about 30 of its 140 stores in Asia Pacific and 629 stores in Europe. These changes are anticipated to be completed by the middle of next year. The retailer also plans to shift its global headquarters to St. Petersburg, Florida in late 2025.

Price: 30.26, Change: -2.55, Percent Change: -7.77