Shares of Foot Locker Inc. leaped Wednesday, heading to levels not seen in more than three months, after the athletic-footwear retailer recorded a clean-sweep earnings beat and provided an upbeat sales outlook.
The results marked a sharp turnaround for the company, following two straight quarters of profit, revenue and same-store sales misses, and post-earnings stock plunges of nearly 30%.
The stock
FL,
ran up 11.2% in premarket trading, to put it on track to trade above $26 intraday for the first time since Aug. 10.
“We delivered third quarter results that were ahead of our expectations as strong execution and early progress against our Lace Up plan improved conversion trends across channels,” said Chief Executive Mary Dillon.
The Lace Up refers to the plan introduced in March 2023 aimed at driving the next phase of growth for the company and creating value for shareholders. As part of the plan to expand sneaker culture, the company announced in mid-November a multi-year marketing partnership with the National Basketball Association.
Net income for the quarter to Oct. 28 fell to $28 million, or 30 cents a share, from $96 million, or $1.01 a share, in the same period a year ago.
Excluding nonrecurring items, adjusted earnings per share declined to 30 cents from $1.27, but beat the FactSet consensus of 21 cents.
Total revenue declined 8.6% to $1.99 billion, but was above the FactSet consensus of $1.96 billion. And while same-store sales fell 8.0%, amid “ongoing consumer softness,” that beat expectations for a 9.7% decline.
“Looking forward, we are updating our outlook to reflect the momentum we have in our strategic initiatives into the fourth quarter, which includes strong results over the Thanksgiving week period, against the backdrop of ongoing consumer uncertainty.”
For fiscal 2023, the company updated its total-sales change outlook to a decline of 8.0% to 8.5% from a decline of 8.0% to 9.0% and improved its same-store sales change guidance to down 8.5% to 9.0% from down 9.0% to 10.0%
Meanwhile, the company trimmed its adjusted EPS outlook to $1.30 to $1.40 from $1.30 to $1.50.
The stock has soared 30.1% over the past three months through Tuesday, but has plunged 36.9% year to date. In comparison, the SPDR S&P Retail ETF
XRT,
has gained 6.1% this year and the S&P 500
SPX,
has advanced 18.6%.
