With some of the mega-rich shoe deals NBA stars are signing, no one would expect that the basketball shoe business is in decline.
But after Foot Locker posted lower-than-expected financial results on Friday — thanks largely to basketball shoe sales declining to the mid-single digits in stores — the stock of the company fell as much as 6.8 percent. During the past three months, Foot Locker stock has fallen 13 percent.
“Our core consumer changes their preferences sometimes multiple times during a day,” said Chief Executive Dick Johnson on the company’s earnings call with analysts.
Particular weaknesses came with LeBron James and Kevin Durant’s shoes from Nike, which had disappointing sales. However, sale of casual sneakers not related to basketball continued to rise, eating into that business. Foot Locker hopes the basketball shoe world rebounds with the release of another Michael Jordan shoe, which last year had already happened at this time.
“You all saw the Adidas results, you saw the Under Armour results, you know they are having success. Do we want some more of their products? Absolutely, but again the scarcity model is what fuels our sneaker industry,” Johnson said.
Some of the drop in basketball shoe sales at Foot Locker can be attributed to Nike, Adidas and Under Armour selling shoes directly to customers instead of through other vendors.