By Sabrina Lynch
- Foot Locker sales surged by 18% due to pent up sneaker demand and fiscal stimulus
- Black Culture will fuel the sneaker industry to be worth $95.14B by 2025
Foot Locker (FL +1.07%) has stunned the stock markets with a surprise earnings beat with substantial profits during the pandemic. The footwear giant’s sales were much better than expected, surging by 18%, and it cited pent up sneaker demand and fiscal stimulus as factors that helped to propel the company. Is Foot Locker’s success really due to sneaker culture’s principle customers, multi-ethnic Millennials and Gen Z, squandering stimulus checks on “unvital” expenses instead of paying rent, bills and loan payments?
Why This Matters: Having cultivated partnerships with Black influencers, such as Chico Bean, Dylan and Dakota Gonzalez to create customized programs and content to appeal to a broader spectrum of customers, the brand needs the Black dollar to thrive, if it is to continue building a robust sneaker ecosystem. Foot Locker CFO Lauren Peters also attributed “disciplined expense management” and “highly promotional environment” to the profit increase. This usually means slashing prices and offering discounts to entice customers back through the doors and shop online.
The brand needs the Black dollar to thrive, if it is to continue building a robust sneaker ecosystem
After the company invested $100M in the kicks app GOAT, Black leaders of the sneaker industry, and customers who are the custodians of a shoe’s success, are in the position to demand more support from the brand. From backing designers and communities responsible for growing the culture, to the recruitment and retention of Black talent who set the trends, control of Q3 profits is in the hands of the African-American community. As a key retail partner and trade beneficiary of some of the biggest brands in the world, Foot Locker’s financial health works to the advantage of progressing the agenda for equality and quality.
Foot Locker’s success flies in the face of analysts who predicted a decrease of more than 20% in sales. A prediction validated by the struggles of Nike (NKE +2.37%), Adidas (ADDYY -3.01%) and Under Armour (UA -1.54%) to recoup customer interest in sneaker purchases.
Situational Awareness: Despite the increase in sales for Q2, Footlocker still has shed 30% year-to-date, so it’s not out of the woods yet. The prediction has been teased ahead of the brand’s official release of the second quarter results (in full) on Friday, August 21st. As consumers continue to shift their spending to essentials and seek value across purchases, Q3 sales will be more indicative if sneaker purchases will remain a top priority for American households.
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