A dire set of Foot Locker results have blown the company firmly off track and mean that the outcome for this fiscal year is going to be poor.

Foot Locker was already down on its forecast thanks to a slow first quarter, but the latest comparable sales dip of 6 per cent along with the total sales slide of 4.4 per cent represent a significant deterioration. Moreover, the outlook is also weak, with the company cautioning that more negative results could follow as it moves into its second half.

Given that Foot Locker has been investing in things like new store formats and growing its apparel business, the extent of the negative results come as something of a surprise. This is all the more so because while overall consumer demand for sneakers was a little soft during the quarter, it did not fall by anywhere near the level of Foot Locker’s decline. In other words, the company lost market share.

The main issue is that Foot Locker was a little off-pitch in terms of the styles it showcased and did not have anywhere near enough stock of the key lines and items that consumers wanted. Taken together, these things reduced conversion rates and average spend. Admittedly some other unhelpful trends exacerbated this, including footfall declines at some locations where Foot Locker has stores, but these were relatively minor in comparison to the range issues.

Foot Locker’s sudden fall from grace points to a truism in today’s sports market: customers want and demand constant newness and innovation and punish firms that don’t deliver it. This is something that Nike has spoken about on several occasions, alluding to the fact that new technical capabilities and new iconic styles are essential ways to get consumers to buy new things like sneakers when their existing pairs are still functional.

Nike itself has been at the forefront of these innovations, pushing lines like its Air Vapormax Flyknit sneakers.

While Foot Locker carried this line, stock levels were not always good across the business during the second quarter. This follows on from very poor availability during the first quarter when only a few SKUs of the range were carried – disappointing some customers who then didn’t return.

On top of availability issues, Foot Locker was not able to offer the excitement of the customisable and more expensive iD element of the Vapormax range, which Nike facilitates via its website. As much as this isn’t in the company’s control, it represents a significant problem that suggests Foot Locker needs to work much harder at creating its own points of experience and interaction.

The negative sales numbers took their toll on the bottom line. Unfortunately, this decline was exacerbated by a $50 million litigation fee related to a court decision about its pension scheme. Without this, net income would have been down by 28 per cent, but including the fee, it tumbled by a dramatic 60 per cent.

Looking ahead, expect Foot Locker to regain some momentum. However, making up the ground lost this quarter is almost impossible. As such, this outlook for this year is fairly bleak.

• Neil Saunders is MD of GlobalData Retail.