- Foot Locker is working to reroute its cargo in an attempt to avoid port congestion. Port delays reached two to three weeks in some cases and affected the company’s inventory levels in Q4, CEO Dick Johnson said on the company’s most recent earnings call.
- Chief Financial Officer Lauren Peters said port congestion was one of the issues, along with store closures, that led to a 2.7% year-over-year drop in sales in the quarter.
- “Once the product gets into our portion of the supply chain, you know I feel really confident that our team can move through the inventory and get it in the right place very quickly,” Dick Johnson said. “We think that [inventory] will start to normalize over the quarter.
Foot Locker’s inventory was down 23.6% at the end of Q4, as port delays have lengthened lead times for shippers and bottlenecked cargo.
“With respect to our inventory position, although we achieved our goal of being at a healthy composition by the end of the fiscal year, our levels are lower than we would like,” Peters said.
Dick Johnson said the company is working to improve its inventory as it expects to see strong demand in the quarter — especially given the stimulus bill that passed after the company’s earnings call.
“We’re working with our vendor partners to look for alternative routing,” Dick Johnson said in relation to port congestion and inventory levels.
Figuring out alternative ports of entry is a step multiple shippers are taking to avoid congestion at gateways, such as the ports of Los Angeles and Long Beach.