Foot Locker Wows Investors With Solid Earnings Beat
August 19, 2016 by Chris LangeFoot Locker Inc. (NYSE: FL) reported its fiscal second-quarter financial results before the markets opened on Friday. Overall the company had a positive quarter beating estimates across the board. As a result investors had a positive reaction and sent shares higher in Friday’s session.
The company posted $0.94 in earnings per share (EPS) on $1.78 billion in revenue, compared to consensus estimates from Thomson Reuters that called for $0.90 in EPS on revenue of $1.76 billion. The same period from last year reportedly had EPS of $0.84 and $1.7 billion in revenue.
Gross margin rose to 33.0% of sales for the quarter, up from 32.6% a year ago.
During the second quarter, Foot Locker opened 23 new stores, remodeled or relocated 64 stores and closed 18 stores. At the end of the quarter the company operated a total of 3,401 stores across the globe, not including 54 franchised stores in the Middle East and South Korea, as well as 15 franchised Runners Point stores in Germany.
Richard Johnson, board chair and chief executive, commented:
As a Company, Foot Locker has strong leadership positions in the athletic industry, with the most important being our deep understanding of the core customer for each of our banners. We share this understanding with our key vendors, which enables us to partner with them to deliver the trend-right, premium footwear and apparel assortments our customers seek, which in turn has led to consistently outstanding financial results such as we announced today. Within the second quarter, we drove comparable sales gains across basketball, running, and classic footwear, as well as apparel. We also posted gains in all regions and channels in which we operate, reflecting the success of our strategic initiatives to build our Company to be an enduring retail leader with strengths across many dimensions.
On the books, Foot Locker’s cash and cash equivalents totaled $945 million at the end of the quarter, versus $970 million in the same period from last year.
Shares of Foot Locker were trading up 6.4% at $65.64 Friday morning, with a consensus analyst price target of $70.05 and a 52-week trading range of $50.90 to $77.25
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