Footwear Insight - Business Report Quarterly

Sales: Total Q3 revenues stepped 16 percent higher to $1.56 billion. UGG sales increased by 15.2% to $1.072 billion; Hoka sales rose 21.9% to $429.3 million for the three months ended Dec. 31. U.S. sales increased by 15.6%. Operating profit: +34.5% to $487.9 million. Gross margin: +570 basis points to 58.7% from 53.0% in the year-ago period. Key developments: Raised its FY24 revenue guidance by 3.1% to $4.15 billion, representing 14% year-over- year growth with UGG projected to be up in the "low double digits" and Hoka by about 25%. Chief Commercial Officer Stefano Caroti takes over as president and CEO on Aug. 1 to replace the retiring Dave Powers. Meanwhile, Hoka's new president is Robin Green, formerly global VP of men's running and fitness at Nike. Sales: +2% to $2.38 billion in Q4. Combined comparable sales in Foot Locker and Kids Foot Locker +5.2% in final period. Annual revenues fell 6.8% year-over-year to$8.15 billion. FY end inventories were -8.2% from year- ago period. Operating profit: -44% to $33 million in Q4; -76% to $142 million for FY23. Gross margin: Higher markdowns sent it down 350 basis points in Q4. Key developments: Now expects a two-year delay in reaching its 8.5-9.0% EBIT margin target to 2028. Total store count projected to decline by 4% in 2024 but comparable sales should rise 1-3%. Annual gross margin forecast at 29.8-30.0% range due to fewer markdowns. Will introduce a new Foot Locker mobile app later this year; on track to reach approximately 25% e-commerce penetration by 2026. Sales: +2% in Q4 to $739 million as comps declined by 4%. Direct sales rose 5% and e-commerce equaled 27% of retail sales versus 25% in year-ago period. FY net sales slipped by 2.5% to $2.3 billion with store sales -7% and direct sales +8%. Journeys' sales declined by 2.3% to $455.0 million for FY. Operating profit: -25.1% to $37.3 million in Q4; lost almost $13.5 million in FY. Gross margin: -10 basis points to 46.3% in Q4; -30 basis points to 47.3% for FY. Key developments: Implementing new strategies at Journeys under a new chief merchant. Intensifying efforts to promote chain as industry- leading retail brand, hiring a new creative agency to develop a new communication strategy. Eyeing strong H2 for the business where a loyalty program and BOPIS initiative has been launched. Sales: +11% to ¥53.5 billion ($355.4 million) for Q3 ended Dec. 31. rough first nine months of FY, global footwear sales rose by 15.5% to ¥23.2 billion ($154.1m) and by 36.0% to ¥6.7 billion ($44.5 million) in the Americas. Operating profit: Hit ¥5.6 billion ($37.2 million) in Q3. Gross margin: Rose by 10 basis points to 40.0 percent through nine months. Key developments: Company raised its full-year operating profit forecast to ¥16.5 billion ($109.6m) but maintained its FY sales outlook at ¥225 billion ($1.5 billion). rough nine months, Americas' footwear sales increased by 36.0% to ¥6.7 billion ($44.5 million). Sales: Flat at $12,429 million versus $12,390 million for three months ended Feb. 29. Operating profit: -5.4% to $1,336 million from $1,412 million. Gross margin: +150 basis points to 44.8% in Q3, driven by strategic price increases and lower freight and logistics costs that were partially offset by higher product input expenses and restructuring charges. Key developments: Announced 1,600 job cuts in mid-February. Plans on launching new iterations of its Air technology, investing more in key wholesale partners, and improving its brand storytelling for consumers as it zeroes in on product freshness and innovation and makes some of its footwearinsight.com Q1 April 8 2024 ~Footwear Insight Business Report Quarterly 11

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