Foot Locker Soars to Highest Since May 2017 on Strong Sales
(Bloomberg) -- Foot Locker Inc. shares jumped as much as 14 percent to the highest since May 2017 after the athletic-shoe retailer posted results that blew away estimates.
- Comparable-store sales rose 9.7 percent, more than twice what analysts predicted. Excluding some items, earnings per share of $1.56 also topped projections.
- In efforts to draw more customers to its stores, Foot Locker has been closing underperforming locations and renovating others. It upgraded or relocated 33 stores in the fourth quarter and shuttered 56.
- Improvements in inventory were behind Foot Locker’s last big earnings surprise, in the first quarter of last year, and they helped in the most recent quarter, too. Chief Financial Officer Lauren Peters said the company’s inventory turn exceeded its long-term target.
- Foot Locker’s close relationship with Nike Inc. “puts the retailer in a unique position for growth,” Bloomberg Intelligence analyst Chen Grazutis wrote in a note. Its position as the largest U.S. athletic-shoe chain gets it better product allocations than rivals, he said.
- Foot Locker shares rose as much as 14 percent to $68 in New York trading, their highest level since May 2017.
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