Foot Locker Surprises With Stronger Earnings and Sales

Foot Locker, the sneaker and sportswear retailer, witnessed a surge in its shares following positive quarterly financial results and a successful Thanksgiving weekend. The company narrowed down its full-year forecast, with an expected 8% to 8.5% drop in sales compared to the previously predicted 8% to 9% decrease.

Although the company lowered the high end of its adjusted earnings guidance to a range of $1.30 to $1.40 per share, shares still surged about 17% on Wednesday.

CEO Mary Dillon highlighted the company’s successful turnaround efforts, including a new NBA marketing deal. She also reported a strong start to the holiday quarter with solid sales both in-store and online during Thanksgiving week.

“We know we’re vying for wallet share with a value-conscious consumer this holiday season. While our customers remain discerning with their discretionary dollars and we expect that will continue to through the season, we’re also seeing them respond to newness at key moments.”

Mary Dillon, Foot Locker CEO, via CNBC

Foot Locker’s Q3 results exceeded Wall Street’s expectations with 30 cents adjusted earnings per share and $1.99 billion in revenue. However, same-store sales fell by 8% year over year, a slightly better figure than analysts’ predictions of a 9.7% drop.

As Foot Locker grapples with various hurdles, it simultaneously seeks innovative avenues to engage customers and boost revenue. Earlier in November, it landed a multi-year collaboration with the NBA, a move that promises Foot Locker virtual on-court visibility during national broadcasts and a presence across the NBA’s social media platforms.

Finally, Foot Locker unveiled its plans to venture into a new marketplace, India, by next year. It has forged a long-standing license agreement with Metro Brands Ltd., one of India’s prominent specialty retailers in footwear and accessories, and Nykaa Fashion, a leading e-commerce retailer. These two operators will exclusively own and operate Foot Locker outlets and facilitate the online sale of its products in India.