An employee arranges a sneaker display at a Foot Locker Inc. store on South Park Mall in Strongsville, Ohio.
Luke Sharrett | Bloomberg | Getty Images
Foot Locker’s shares rose more than 10% in early Friday trading after the company cut analysts’ earnings estimates for the second quarter of the fiscal year and expressed optimism for the second half of the year.
Consumers continued to spend on athletic shoes and workout clothing during the Covid pandemic, with these segments outperforming others such as clothing and high heels. Now parents are budgeting their paychecks to buy new Nike and Adidas sneakers for their kids preparing to go back to school.
Foot Locker reported net income of $ 430 million, or $ 4.09 per share, for the quarter ended July 31, compared to $ 45 million, or 43 cents per share, a year earlier. Excluding one-time gains, the company made $ 2.21 per share. Analysts surveyed by Refinitiv looked for adjusted earnings per share of $ 1.01.
Revenue rose 9.5% to $ 2.28 billion from $ 2.08 billion a year ago. That exceeded expectations of $ 2.09 billion.
Foot Locker’s like-for-like sales increased 6.9%. Analysts polled by StreetAccount had been looking for a 0.2% decline.
Chief Executive Richard Johnson said that in addition to its apparel and accessories segments, the company was also seeing strong demand in the women’s and children’s shoe businesses. Foot Locker also kept promotions in check and increased profits, he said.
CFO Andrew Page said the retailer remains “cautiously bullish” on its outlook for the second half of the year.
“Recognizing that we are still operating in an uncertain environment due to Covid-19, we continue to monitor the business closely, including temporary store closures and supply chain challenges,” he said in the press release.
Earlier this month, Foot Locker announced it was buying two smaller chains of shoe stores for approximately $ 1.1 billion in cash to expand its reach outside of malls and into Asia.
Foot Locker’s shares are up about 35% since the start of the year. The company’s market capitalization is $ 5.63 billion.
Find the full press release on Foot Locker’s results here.