Foot Locker, Inc. (NYSE:FL) Q3 2022 Earnings Call Transcript

Mary Dillon : Yes. I guess I’m not exactly sure. What I would say is that certainly, signature launches and partnering with our brand partners will always be a part of the equation because that’s what customers want, right? So we will continue — I mean, we have a great relationship with LaMelo Ball. We’re launching the MB.02 in the fourth quarter, many collaborations that we have across all of our brand partners. So we’ll always participate in part of that. It’s a broad market. We’re not — we’re not the only place that people can buy these things, certainly, but that will be a key part of our strategy going forward. Is there anything, Frank, you want to add to Michael’s questions. .

Frank Bracken : I think the other thing is as we dimensionalize our consumer and the assortment, it’s launched in our core base business and both are important and both can be successful. So those things can be simultaneously true. When you think about the introduction of innovation into the category, the adoption of Crocs within the sneaker culture, the UGG brand, the great work that the team at New Balance is doing, Mary mentioned Puma, On Running, HOKA, it’s bringing new customers into the category, which is really exciting. So we’re not as dependent on a launch calendar per se. We can have that and we can have a really strong flow of innovation that recruits new customers into the category. And I’ll just mention with regards to on HOKA, we’ve seen great gender diversity and retention and acquisition of the female consumer has been exceptional on those two brands, which again, just speaks to this trend of the broadening of steeper culture and more consumers wanting to participate.

Andrew Page : And then, Michael, getting back to some of your model questions. I appreciate your call out on the walk from third quarter to fourth quarter. But do remember, this fourth quarter is the first big impact of the Nike drop in allocation. So you’re — that’s why you see comps very similar coming down against your expectations in the fourth quarter compared to the third quarter. We do expect, obviously, some continued growth in SG&A against — even as you compare it against 2019. So SG&A, we expect to be similar in Q3 to Q4. But on the deleverage, on the comp side, that’s really reflective of the fact that this is the first quarter of the big step down as it relates to Nike.

Operator: The next question comes from Lorraine Hutchinson of Bank of America.

Lorraine Hutchinson : Mary, I thought your outlook on some things that you hope to change was very interesting. I was just wondering, on the cost side, are there any big investments needed in IT or marketing as you see it, to really realize this — some of your goals on the better omnipresence, loyalty, digital marketing. Anything that we need to think about either from a CapEx or SG&A standpoint over the next several years to fund these changes?