The company is taking strategic actions to address unproductive assets, including the optimization of inventory and the closure of underperforming stores. The company believes these actions will lay the groundwork for the success of the Foot Locker Business starting in 2026. As a result of the actions to optimize the inventory, the company believes that Q4 2025 gross margin for the Foot Locker Business will be down between 1,000 to 1,500 basis points as compared to Foot Locker’s reported results in the same period last year with pro-forma comp sales being down mid- to high-single digits. Excluding the one-time costs associated with the company’s actions to address unproductive assets, including the optimization of inventory and the closure of underperforming stores, the company expects Q4 2025 operating profit for Foot Locker to be slightly negative.
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