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Key Takeaways
- Foot Locker shares soared Thursday as its first-quarter performance indicated the company’s turnaround efforts are succeeding.
- The athletic shoe and apparel retailer beat profit estimates, and comparable store sales were better than expected.
- CEO Mary Dillon said Foot Locker controlled costs and benefited from favorable changes in the timing of expenses.
Foot Locker ( FL ) shares soared Thursday as the athletic shoe and apparel retailer’s first-quarter results showed its turnaround efforts seem to be working.
Foot Locker reported quarterly adjusted earnings per share (EPS ) of $0.22, nearly double the consensus estimate of analysts compiled by Visible Alpha. Revenue declined 2.8% to $1.88 billion, basically in line with forecasts.
Comparable store sales dropped 1.8%, dragged down by what the company called “continued repositioning of the Champs Sports banner.” Comparable store sales for Foot Locker and Kids Foot Locker were up 1.1%.
Sales at Foot Locker grew 2% to $759 million. They gained 9.6% to $183 million at Kids Foot Locker, and 6.7% to $160 million at WSS. Sales plunged 18.6% to $267 million at Champs Sports.
Foot Locker CEO Says ‘Lace Up Plan’ Working
Chief Executive Officer (CEO ) Mary Dillon explained the performance showed that the company’s “Lace Up Plan” to revamp operations is working. She credited the strong profit to “disciplined expense management and some favorable shifts in expense timing.” She also expressed optimism about the current quarter, saying that Foot Locker is “well-positioned with fresh assortments as we approach the summer and Back-to-School seasons.”
The company affirmed its full-year outlook of adjusted EPS in the range of $1.50 to $1.70, with comparable store sales higher by 1.0% to 3.0%.
Foot Locker shares were up more than 26% to $28.46 as of 10:30 a.m. ET Thursday but remain nearly 10% lower year-to-date.