Shares of Foot Locker dropped more than 10% in after-hours trading Thursday (10 May) after the athletic specialty retailer sharply cut its first quarter earnings projections based on weakness in its US stores.

Earnings for the just-concluded quarter are now expected to come in at between US$0.10 and $0.11 a diluted share, less than a third of the original estimate of $0.34 to $0.37.

Matthew Serra, chairman and CEO of the New York-based company, said: "The shortfall in our expected earnings primarily reflects a first quarter comparable-store sales decline of 5.1% and additional markdowns taken in our US stores.

"While first quarter sales and earnings at our US store businesses fell short of our expectations, our financial results from our international units were generally in line with our plan with earnings increasing from last year's comparable period."

Foot Locker's shares closed at $23.27, down $0.37 or 1.6%, in Thursday's New York Stock Exchange session prior to the release of the downward revision. They continued to spiral lower in after-hours trading, sinking to $20.84, down $2.43 or 10.4% in comparison to the close of trading. The stock's 52-week low had been $21.10, set on 24 January.

Foot Locker is scheduled to report first quarter results on 23 May and will update guidance for the fiscal year during a conference call the following day.
By Arnold J Karr.