Shares of Foot Locker (FL) are falling on Wednesday as slowing consumer demand and an elevated promotional environment weigh on sales and gross margin expansion. Wealth’s Brad Smith speaks to Cristina Fernandez, managing director and senior research analyst at the Telsey Advisory Group, about her key takeaways from these results. She points to softness in Nike (NKE) as a headwind for the sneaker retailer. With Nike making up 60% of Foot Locker’s sales, weakness in the brand is a huge weight even as competitors gain share: "Nike has been offering higher promotions, the retailers have had to respond. So the combination of all those things led to weaker sales, more promotions, and then Foot Locker having to lower their outlook for the year." Fernandez goes on to say this trend for Nike points to a more "picky" consumer. "Sales of Adidas (ADDYY), On (ONON), Hoka (DECK), New Balance, all those other brands combined were up double digits." For more expert insight and the latest market action, click here to watch this full episode of Wealth!
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