Mary Dillon Starts With Momentum at Foot Locker
Maybe blush and basketball shoes aren’t so different after all.
Mary Dillon might be proving as much at Foot Locker Inc.
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The architect behind much of Ulta Beauty’s success is settling into her new gig as president and chief executive officer of the sneaker mainstay and is coming in with some momentum. She’s also not the only one moving into a new corner office in the sneaker world, where Bjørn Gulden has been tapped as the next CEO of Adidas and Arne Freundt has taken up the post of CEO for Puma.
In Dillon’s first quarterly report to Wall Street since taking the helm in September, Foot Locker logged better-than-expected adjusted earnings and boosted its outlook for the year — at a time when outlooks in apparel are generally coming down.
On a call with analysts, Dillon laid out what brought her to Foot Locker.
“Sneakers are fun,” she said. “I come in with a true love for the product, which has only grown every day that I’ve been here, along with the number of sneakers that I have.
“This is a growth category with a long runway ahead where the intersection of sport, fitness, fashion and the casualization of society and the tailwinds for sneakers, I believe, will be persistent for many years to come,” she said. “And much like beauty’s, [the] sneaker category is driven by passionate enthusiasts who are deeply engaged in the category, products that allow for individual expressions that are fun to shop for and where newness and innovation matters.”
Dillon also pointed to sneakers as “affordable luxury” and said the category could be “resilient in the face of steep inflationary pressures.”
And Foot Locker, she said, has both great strength and history in sneakers and room for improvement.
“We really authentically own street basketball and youth culture, and we’re at the intersection of fitness and trend and sport,” she said. “And I think yet there’s a lot of folks who probably don’t know Foot Locker, believe it or not, right? So we’ve got strong brand awareness, but maybe somewhat latent equities. And I think as we think about certainly, the momentum we’re already seeing with the diversification of brands, and…we’re seeing things with new brands, bringing new customers, women getting more attracted to Foot Locker, and we’re really just getting started.”
Dillon also said the company can simplify its business, can shift from a “product-led” to a “consumer-led” approach, and become more omnichannel savvy.
The simplification drive has already started and Dillon said Foot Locker would halt its entry into Japan and wind down two joint ventures in Europe.
Investors liked what they heard and sent shares of Foot Locker up 8.7 percent to $35.88 on Friday.
The retailer’s third-quarter net profits fell 39 percent to $96 million, or $1.01 a share, from $158 million, or $1.52, a year earlier.
Adjusted earnings per share of $1.27 came in 16 cents ahead of the $1.11 analysts projected.
Sales for the quarter ended Oct. 29 slipped 0.7 percent to $2.17 billion from $2.19 billion a year earlier and would have been up 3.3 percent without currency fluctuations. Comparable-store sales increased 0.8 percent.
The quarter was strong enough to prompt the company to raise its earnings guidance for the year, to $4.42 to $4.50 a share, up from the $4.25 to $4.45 previously projected.
