What Happened:

Shares of footwear and apparel retailer Foot Locker (NYSE:FL) jumped 5.47% in the morning session after the company reported second quarter earnings that missed analysts' revenue and earnings per share estimates. In addition, it posted lower-than-expected margins (likely driven by markdowns on items to move merchandise) and paused its dividend to free up resources. 

Lastly, the company continued to burn cash. Moving ahead, Foot Locker lowered its full-year revenue and EPS estimates again after doing the same just five months ago during its Q1 earnings. 

Turning to macro, CEO Mary Dillon noted that the company is seeing a tough consumer backdrop, calling consumers price sensitive. 

Overall, this was a bad quarter for Foot Locker, as the outlook suggests that sales and profits could face pressure in the latter half of the year. 

After the initial pop the shares cooled down to $15.68, down 32.4% from previous close.

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What is the market telling us:

Foot Locker's shares are not very volatile than the market average and over the last year have had only 17 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Foot Locker is down 57.7% since the beginning of the year, and at $15.68 per share it is trading 66.3% below its 52-week high of $46.54 from February 2023. Investors who bought $1,000 worth of Foot Locker's shares five years ago would now be looking at an investment worth $294.55.

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