May 19 Reuters Shares of Foot Locker Inc plunged 26 on Friday, after the footwear retailer cut its annual sales and profit forecasts reeling under a sharp drop in demand and a hit from heavy discounts aimed at clearing excess inventories.

The company also missed Wall Street estimates for its firstquarter results and named former Kohl39;s Corp executive Mike Baughn its new finance chief, effective June 12.  

U.S. consumers have sharply cut back discretionary spending, worn thin by persistent inflation. This dented sales at a wide range of companies, including bigbox retailer Target Corp and home improvement chain Home Depot.

Foot Locker doubled down on promotions and markdowns to drive demand at its stores, which, coupled with a rise in theftrelated inventory shrink, dealt a 400basispoint hit to its quarterly gross margin.

We know trends have weakened, but just the magnitude of the guidance cut is what39;s disappointing… It39;s a surprise how big Foot Locker had to cut it just two months after they gave it, said Telsey Advisory Group analyst Cristina Fernández, adding the path to recovery was now steeper.

Foot Locker39;s gloomy report dragged shares of sportswear companies on Friday, with Nike Inc and Under Armour Inc dropping 4 and 3, respectively.

Fernández said the results signaled it would not be possible for brands to clear their inventories by summer as they expected.

Foot Locker, which has a market cap of about 3.88 billion, now expects fullyear…