The company’s net income fell to $19m(£15.5m) in the three months to 28 January, compared to $103m(£84.1m) in the previous year.

Gross margin declined by 290 basis points compared with the year before, driven by higher markdowns on products.

Total sales were down by 0.3% during the quarter to $2.3bn (£1.9bn) while comparable store sales grew by 4.2%, driven by increased traffic and improved access to inventory.

As of 28 January, 2023, the company’s leftover stock was worth $1.6bn(£1.3bn), 29.8% higher than at the end of the fourth quarter last year.

During the period, Foot Locker opened 21 new stores, remodeled or relocated 45 stores, and closed 101 stores.

In its 2023 financial year, the company expects sales to be down by between 3.5% to 5.5% year-on-year.

Meanwhile, it announced plans to revamp its business model in Asia including closing stores and ecommerce in Hong Kong and Macau and converting its current operations in Singapore and Malaysia to a license model as it looks to “focus on core banners and regions”.

In January, Foot Locker said it would be cutting “a number of corporate and support roles” in order to enhance its operational efficiency. It also decided to “wind down its Sidestep banner in Europe”, which accounts for an estimated 80 stores in the region, located across Germany, the Netherlands, Belgium, Spain and Switzerland.

Mary Dillon, president and chief executive officer at Foot Locker, said: “Our team delivered a great finish to the year with strong fourth quarter results that capitalised on resilient holiday demand and a compelling assortment and inventory position from our brand partners.

“We are entering 2023 with a focus on resetting the business – simplifying our operations and investing in our core banners and capabilities to position the company for growth in 2024 and beyond.”

“We are proud of Foot Locker’s role in influencing and serving the global sneaker community, and next year, we will celebrate the 50th anniversary of the iconic Foot Locker brand.”