Jordan Pullback Puts Foot Locker’s Turnaround at Risk

By Marcus Bennett

A pullback on Jordan retro launches could cost Foot Locker roughly $550 million in sales from spring 2027 unless the retailer replaces lost Jordan volume, BNP Paribas Equity Research senior analyst Laurent Vasilescu estimated.

The estimate lands as Foot Locker’s owner faces a weak sales base. Dick’s Sporting Goods bought Foot Locker for $2.4 billion last year, and Foot Locker’s comparable sales, or comps, fell 3.6% in Q2.

In August, Dick’s cut Foot Locker’s full-year outlook to comps of flat or down as much as 2%, down from previous expectations of up to 3% growth. Nike’s Jordan decision therefore compounds a problem Foot Locker must solve during its turnaround under new ownership.

Why does Jordan matter so much to Foot Locker?

Jordan generated $8.7 billion for Nike in fiscal 2024. The brand now sits about 20% below that benchmark, and revenue fell in the mid-teens in Nike’s latest quarter. The latest results made clear that Jordan needs more time to recover, while Nike’s earnings earlier this month signaled a longer company turnaround.

CEO Elliott Hill said Nike will pull back retro Jordan launches to correct an oversupply. “We’ve discussed it with our wholesale partners,” Hill said earlier this month. “Together, we will restore balance to the marketplace to create a foundation for more profitable and sustainable growth.”

The inventory correction matters because Jordan represents roughly 25% of Foot Locker’s revenue, or about one in every four revenue dollars. Vasilescu called Foot Locker Jordan’s largest wholesale partner and estimated the basketball brand generated about $1.85 billion for the retailer.

Nike’s announcement did not specify how many retro launches it will cut or when Jordan will regain its fiscal 2024 revenue level. That leaves wholesale partners with a direction but no measurable timetable.

Takeaway: Nike is prioritizing Jordan’s inventory health over near-term wholesale volume, and Foot Locker carries a large share of that exposure.

How large is the sales risk?

Vasilescu’s scenario assumes Jordan falls 30% next year. “If Jordan is down 30% next year, [Dick’s] has a hole to fill at Foot Locker, which we don’t think can be replaced by other brands due to the [average selling price] differential,” BNP Paribas Equity Research senior analyst Laurent Vasilescu wrote Monday.

At Foot Locker’s estimated $1.85 billion in Jordan sales, a 30% decline equals about $555 million, close to BNP Paribas’ roughly $550 million estimate. The estimated hit starts in spring 2027 unless Foot Locker replaces the Jordan volume.

BMO Capital Markets analyst Kelly Crago also flagged Foot Locker’s upcoming financials. Crago expressed a cautious view of the retailer’s ability to post positive comps in FY27 and estimated the Jordan pullback would affect comps by 250 to 550 basis points that year. That range equals 2.5 to 5.5 percentage points.

Neither analyst assigned a probability to the 30% decline scenario or detailed how Foot Locker’s lower outlook incorporates the full Jordan pullback.

Takeaway: The downside estimates reach well beyond Foot Locker’s already reduced growth range and become material in FY27.

Can Vans and New Balance replace Jordan?

Foot Locker could flex up with partners such as Vans and New Balance, Vasilescu said. Their lower prices would require Foot Locker to sell a higher volume to replace the same Jordan sales dollars.

Vasilescu did not quantify the average selling price difference or the extra unit volume needed. The retailer must therefore replace both high Jordan sales and the units that generate them.

Takeaway: Alternative brands can cushion the gap, but lower ticket prices make the substitution harder than a dollar-for-dollar product swap.

What cost changes could Dick’s make?

“Given expected [Foot Locker] weakness, we believe [Dick’s] may need to rethink FL’s cost structure,” BMO Capital Markets analyst Kelly Crago wrote Monday.

Crago raised three possible responses:

• Shut Foot Locker’s European business, which accounts for about 20% of sales and creates a roughly $115 million drag on profitability.
• Sell WSS.
• Close Champs.

Closing Europe would remove about one-fifth of Foot Locker’s sales while shedding a $115 million profitability drag. Crago’s analysis did not estimate how much Dick’s could save through closures, a WSS sale or other cost reductions.

Takeaway: Foot Locker may need to shrink its store portfolio because a product-level sales gap cannot be fixed through merchandising alone.

What does a smaller Foot Locker mean for Nike?

“Whatever [Dick’s] chooses to do, we see a smaller [Foot Locker] as a further incremental risk to [Nike],” Crago said.

That assessment leaves Nike with a two-sided problem. It needs wholesale partners to carry less Jordan inventory, while a smaller Foot Locker would weaken Jordan’s largest wholesale relationship.

Hill tied the supply correction to more profitable and sustainable growth, but the announcement gave no recovery schedule. The next test comes with Foot Locker’s FY27 results: positive comps and a cost structure that can absorb the Jordan pullback as the spring 2027 sales gap approaches.

Takeaway: A cleaner Jordan marketplace may require a smaller Foot Locker, shifting Nike’s risk from excess inventory to wholesale weakness.