Foot Locker (FL) Annual Retail Round Up Conference summary

Strategic progress and operational highlights

• Achieved three consecutive quarters of positive comparable sales, gross margin expansion, and regained market share, with positive free cash flow in 2024 and continued momentum expected into 2025.

• Store refresh and reimagined formats are driving higher productivity, with 300 refreshed and 80 reimagined stores planned for 2024, targeting 55% of stores in these formats by end of 2026.

• Digital enhancements, including a new app and improved site experience, led to a 12% digital comp in Q4 and a target of 25% digital penetration by 2026.

• Loyalty program FLX exceeded penetration goals two years ahead of schedule, with further rollout to Europe and Asia-Pacific planned for 2025.

• Partnerships with the NBA and Chicago Bulls are amplifying brand awareness and driving strong event engagement.

Consumer trends and demand management

• Noted increased consumer uncertainty post-holiday, with lower-income households more affected, but strong performance during key events and tax refund periods.

• Leveraging loyalty programs, targeted marketing, and event activations to smooth demand and drive engagement during off-peak periods.

• Apparel remains a challenging category, but new branded and private label initiatives are expected to drive improvement, especially in the back half of the year.

Brand and product portfolio

• Nike remains a core partner, with allocations up and strong collaboration on basketball, sneaker culture, and kids' segments.

• Exciting upcoming Nike launches include new signature basketball shoes and refreshed classics, with strong sell-through on Jordan Retros and new running models.

• Non-Nike brands like New Balance, Hoka, and UGG are growing double digits, with expansion in store count and product categories.

• SKU count has been reduced to focus on depth and replenishment for high-performing products.