Reuters
A customer shops at Foot Locker.
On Friday, sneaker retailer Foot Locker announced a brutal second quarter that sent shares tumbling by nearly 30%. The compay earned $0.39 a share on revenue of $1.7 billion, both of which were shy of Wall Street expectations. Additionally, same-store sales sank 6% versus a year ago.
Friday's selloff is the latest blemish on a difficult three months for the company. Over that time shares have plunged more than 50% as traders price in the possibility of further disruption from
But even after the brutal three months, capped off by Friday's disappointing figures, Foot Locker Chairman and CEO Richard Johnson says he's not worried about Amazon's impact on business (emphasis ours).
"For our part, we will continue to invest in creating compelling experiences for our customers. At the premium end of the market, most of our customers don't want to just buy a specific product they see on a screen. They want that product to have a connection to an experience they find meaningful and want to participate in. That experience could be a special event in a store, being notified of or discovering a video on our website or YouTube channel of an athlete or celebrity wearing or discussing the latest product, an interaction with their friends while touching and feeling the product, or simply a conversation about sneakers with one of our stripers or other store associates. For that reason, we do not believe our vendors selling product directly on Amazon is an imminent threat. There is no indication that any of our vendors intend to sell premium athletic product, $100-plus sneakers that we offer, directly via that sort of distribution channel."
Johnson's comments are rather curious considering at the end of June, Nike announced a deal to sell its sneakers and apparel on Amazon to crack down on unauthorized third-party vending. And while it's true that premium brands such as Jordan aren't offered on Amazon, the trend is certainly moving in that direction.
