Foot Locker (NYSE:FL) shares fell more than 27% in early Wednesday trading after the retailer announced its second-quarter earnings and said it will pause quarterly dividends in a move to enhance financial flexibility.

The company reported EPS of $0.04 on revenue of $1.86 billion. Analysts were looking for EPS of $0.04 on revenue of $1.88B. Sales fell nearly 10% year-over-year.

Foot Locker’s comparable sales for the reported period showed a decline of 9.4%, a slight improvement from the 10.3% decrease in the same period year-over-year. Still, the number came in worse than the expected decline of 8.9%.

Mary Dillon, president and chief executive officer, said, “Our second quarter was broadly in line with our expectations, despite the still-tough consumer backdrop. However, 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 that drive our Lace Up plan.”

“Importantly, we are continuing to make progress on our inventory levels and look to best position the business for the upcoming holiday season and into 2024.”

Looking forward, the company anticipates EPS in the range of $1.30 to $1.50, below the prior forecast of $2.00-2.25, and compared to the consensus estimate of $2.01.

Additionally, Foot Locker foresees a decline in sales ranging from 8% to 9%, as compared to the previously projected decrease of 6.5% to 8%.

“To ensure that we have the flexibility to continue to fund our strategic investments appropriately, we are pausing our quarterly cash dividend beyond our Board’s recently-approved October payout. We intend to update the market on our go-forward capital allocation plans and the timing around our longer-term financial targets when we report fourth quarter results,” Dillon added.