Foot Locker (FL) stock crashed Wednesday, falling as much as 34% in early trading as the company slashed its full-year outlook for the second straight quarter and suspended its quarterly dividend as a "still-tough consumer backdrop" weighs on the footwear retailer.

"We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers while still leaning into the strategic investments," Foot Locker CEO Mary Dillon said in the company's earnings release.

The retailer now sees full-year comparable sales falling in a range of 9%-10%, a steeper drop than its initial forecast for a 7.5%-9% decline.

Three months ago, Foot Locker's stock fell more than 25% in a day when the company also warned the "tough macroeconomic backdrop" would impact full-year sales during its first quarter earnings call. Foot Locker hasn't seen same-store sales decline more than 6% for the year since 2010.

Foot Locker also slashed its full-year outlook for earnings per share down to a range of $1.30-$1.50 after previously guiding to a range of $2.00-$2.25. Dillon noted on the company's earnings call that the macro environment challenges weighed heavier on the lower income consumer than expected, including a "weak" start to back-to-school shopping. This led to Foot Locker promoting more heavily than it initially planned to stay competitive and keep inventory levels low.

"The store traffic and conversion challenges, we began to see in late Q1, persisted through the second quarter as our customers remain cautious with their discretionary dollars," Dillon said.

Foot Locker stock is now down nearly 60% so far this year and is now hovering at a share price last seen in October 2010.

In the most recent quarter, the company's earnings per share of $0.04 was down 96% from the same quarter the year prior, reflecting Foot Locker's worst quarter since the first quarter of its fiscal year 2021.

Sales for the second quarter, fell nearly 10% from the same period a year prior to $1.86 billion. Wall Street analysts had expected $1.87 billion, according to Bloomberg data.

Like other retailers, the company also said "shrink" weighed on margins during the quarter.

Foot Locker's struggles over the past several months could span beyond its own business too.

After last quarter's disappointing results, Wall Street analysts warned Foot Locker's downturn could impact Nike (NKE), which has historically accounted for more than half of Foot Locker's total sales.

Nike shares were down more than 3.5% in early trade on Wednesday with the stock set for its 10th straight day of declines.

"We think Nike could feel a negative impact from Foot Locker's moderated sales outlook and efforts to reduce inventory levels into the Holiday season amid a more uncertain environment," Jefferies analyst Randal Konik wrote in a note on Wednesday. "That said, we continue to believe Nike is best in class and is likely to drive ongoing share gains ahead."

After successfully building up Ulta (ULTA) for eight years ending in 2021, Dillon was named the Foot Locker CEO in August 2022 and assumed the position in January.

Led by Dillon, Foot Locker is in the midst of its turnaround strategy, dubbed "Lace Up." The footwear chain that became a staple in brick-and-mortar malls plans to close 400 underperforming stores, mostly in lower-tier malls, and focus more on off-mall locations.

Foot Locker said in its release that in order to keep executing that plan, it will no longer be offering its quarterly cash dividend.

"Foot Locker clearly finds itself in a tough spot amid the currently challenging macro environment," selling on average high priced products to moderate-income core customers, Wedbush senior vice president Tom Nikic wrote in a note on Wednesday.

He added: "Hopefully this is as bad as it's going to get."

Josh Schafer is a reporter for Yahoo Finance.

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