An employee organizes a sneaker display at a Foot Locker Inc. store. within the South Park Mall in Strongsville, Ohio.
Luke Sharrett | Bloomberg | Getty Images
Shares of Foot Locker soared 9% in trading before trading on Friday after the company crushed fiscal estimates of analysts ’second-quarter earnings and expressed optimism about the previous year’s half.
Consumers have continued to spend on sports shoes and training clothing during the Covid pandemic, with these segments outpacing others such as clothing and high heels. Now, parents are budgeting their salaries to buy new Nike and Adidas sneakers for their children who are preparing to go back to school.
Foot Locker reported net income for the quarter ended July 31 of $ 430 million, or $ 4.09 per share, compared to $ 45 million, or 43 cents per share, a year earlier. Excluding one-time gains, the company earned $ 2.21 per share. Analysts surveyed by Refinitiv were looking for adjusted earnings per share of $ 1.01.
Revenue rose 9.5% to $ 2.28 billion from $ 2.08 million a year earlier. This exceeded expectations of $ 2.09 million.
Foot Locker comparable store sales increased 6.9%. Analysts polled by StreetAccount had been looking for a 0.2% decline.
CEO Richard Johnson said the company had strong demand in the women’s and children’s footwear business, in addition to the clothing and accessories segments. Foot Locker also kept promotions under control, fueling profits, he said.
Chief Financial Officer Andrew Page said the retailer remains “cautiously optimistic” about its outlook for the second half of the year.
“Recognizing that we still operate in an uncertain environment due to the Covid-19, we continue to monitor the business, including temporary store closures and supply chain challenges,” it said in the press release.
Earlier this month, Foot Locker announced plans to buy two smaller shoe store chains for about $ 1.1 billion in cash to expand its reach outside malls and into Asia.
Shares of Foot Locker have risen approximately 35% to date. The company’s market cap is $ 5.6 billion.
Here’s the full press release on Foot Locker’s earnings.