Foot Locker Shares on the Rise Following Earnings Beat

Foot Locker Shares on the Rise Following Earnings Beat

Foot Locker (NYSE: FL) shares skyrocket over 10% after topping analysts second-quarter earnings estimates.

The company reported earnings of USD2.21 per share, compared to the expected 1.01 a share. Revenue amounted to USD2.28 Billion, higher than analysts anticipated USD2.09 Billion. Additionally, same-store sales climbed 80.3% in comparison to previous year’s metrics and it posted a 5.9% increase in same-store sales.

“Our strong performance this quarter reflects the health of our category, the deep engagement we have with our customers, and the strategic nature of our relationships with our vendor partners,” said CEO Richard Johnson. “This quarter reflects strong results in our women’s and kids’ footwear business along with broad demand for our apparel and accessories offerings, which combined with more limited promotional activity, led to the outstanding top and bottom line results.”

The footwear retailer had previously announced plans to acquire two small shoe store chains for approximately USD1.1 Billion in cash in order to expand its reach outside of malls and within Asia. Amid the high demand of athletic footwear throughout the pandemic, the division has done better than others, such as dress wear and high heels.

“Many of the trends we saw in the first quarter continued into the second quarter, with the combination of robust demand and fresh and lean inventory driving meaningfully lower levels of promotional activity and resulting in a gross margin of 35.1%, compared to the 25.9% in the prior year period,” added Andrew Page, Executive Vice President and Chief Financial Officer. 

Foot Locker shares have risen 35% throughout the year and has a current market cap of USD5.63 Billion.

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