Lowered guidance from Foot Locker (N/R); mainly due to company-specific issues we believe Foot Locker has lowered guidance alongside weaker-than-expected Q1 sales. Total sales were down 11.4% with comps down 9.1%. North America comps were down 12.8% (Foot Locker fascia -5.5%) with Champs Sports a drag (-24.6%) as it is reset & EMEA comp sales were down 0.2% (Italy, Spain & France grew; UK & Germany down) with Foot Locker fascia +2.1%. Sales softened meaningfully in April (vs plan) post a weak tax refund season and has continued since. Management increased markdown levels at the end of Q1 to both drive demand and manage inventory and this will continue into Q2. FY24 was always going to be a difficult reset year for Foot Locker Inc after NIKE cut allocations last year and the Group is far too early into its new ‘Lace up’ strategy (announced 2 months ago) for it to impact on financials. In our view, years of underinvestment means there is much to fix at Foot Locker with the new strategy focused on broadening out ranges away from Nike, launching new formats, transforming the estate and building better CRM and digital capability. New FY24 guidance is EPS $2-£2.25 (prev $3.35-$3.65) based on sales comps -7.5% to -9% (prev -3.5% to -5%). Q2 comp are expected to be down high-single digit (prev: mid-single digit) with 2H comps down mid to high-single digit (low-single digit). Dynamics behind JD Sports very difference. It is a well-tuned machine and has just reported strong Q1 momentum In stark contrast, JD Sports Group has just delivered record profit in FY23 and a strong 1Q24 with organic total Group Q1 sales up 15% and the US up c20%. There is strong revenue momentum across all its key territories and we believe its ‘3 double’ 5 year financial targets, which imply double-digit growth p.a., seen achievable, as discussed in ‘The next growth chapter’ (published 8 Feb 2023). JD is c.40% smaller than Foot Locker and has a strategy which dovetails well with the global brands’ own goals. We see the dynamics behind JD Sports business as very different to Foot Locker. JD already has a well-invested business with a proven vibrant and unique lifestyle proposition which is laser-focused on under 25s. Finally, management said at its results earlier this week that JD does not have a stock issue, with cover similar to pre-COVID levels. Management views the promotional environment as returning to normal, rather than anything out of the ordinary.