00:00 been a long time since I've been in a footlocker and holy cow,
00:03 have we, we got this one right forever.
00:06 We've hated this stock since $45. I've called it a value trap.
00:10 It is a value trap.
00:12 People are getting punished for owning it today and it's deserved because the
00:15 writing has been on the wall, but footlocker for a very, very long time.
00:20 It's down 31% today. This is a disaster.
00:23 Bring on money Mitch because we need to know the details of this report.
00:27 I know he's got the trusty benzinger pro open right now to let us know all the
00:31 dirt on the footlocker shoes.
00:34 Yeah. Let's get into the complete retail disaster. Right.
00:38 And this is not just footlocker, right? Let's talk about it.
00:41 Footlocker Q2 EPS at 4 cents in line sales at
00:46 1.86 billion missing the 1.88 billion estimate.
00:50 Of course they're trading lower reporting a Q2 revenue miss here and an
00:55 11% rise in inventory.
00:57 The company also lowered its gross margin guidance,
01:00 citing more aggressive markdowns.
01:03 Footlocker updated 23 sales guidance down 6.5 and 8%
01:09 down to eight and 9% now.
01:11 And the company also suspended its quarterly dividend,
01:15 all not looking good here for footlocker.
01:18 Yeah. So, and again, you just look here,
01:22 and this was a company that made significant amounts of money and now it's
01:26 making 4 cents in the quarter coming in line.
01:29 The it's just falling off the cliff. Earnings are falling off the cliff here.
01:32 This has been the classic example of a value trap.
01:35 People jumping in for that nice 8% dividend while it would be 10% today,
01:39 but unfortunately it has now moved to zero because they've suspended the
01:43 dividend.
01:44 I don't anticipate anything them giving that dividend back anytime soon because
01:47 the company is not making any money.
01:50 So it's just the writing is on the wall here.
01:53 This thing is like,
01:55 I know that people who are attracted to buying stocks that are down 31%,
01:59 but what I can tell you is stocks that go down 30% often go down more.
02:03 I tweeted this morning was down 28. Um,
02:05 that I thought it could go down further. It's now down 31.
02:08 Think it continue. Is there a balance in store? Nothing goes straight to zero.
02:13 Nothing goes straight to single digits, but I think Footlocker,
02:17 I think by the end of the year, I'm going to make a bold call here by the end of
02:20 the year, single digits. Yeah.
02:23 Loses another six bucks by the end of the year.
02:25 That's where I'm thinking Footlocker is going.
02:27 The trend is absolutely not your friend. How many year low are we in here?
02:31 Yeah, well try 13 years.
02:37 Yeah.
02:40 If you had an order out at 1563 back in November of 2010 and you lost a dollar
02:45 and you left a good till cancel.
02:49 You got it today.
