Foot Locker’s Stock Pops on Earnings Beat, Shoppers Returning to Stores
Shares for Foot Locker Inc. were higher in premarket trading on the heels of a stronger-than-anticipated second-quarter report.
For the three months ended Aug. 1, the specialty athletic chain’s profits were $45 million, or earnings of 71 cents per share on an adjusted basis, compared with last year’s income of $60 million and adjusted EPS of 66 cents. Revenues increased 17.1% to $2.08 billion. Market watchers had forecasted earnings of 57 cents per share and sales of $2 billion.
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As of 8:45 a.m. ET, its stock was up nearly 8% to $29.31.
“I’m proud of the exceptional effort from our team this quarter,” president and CEO Richard Johnson said in a statement. “Despite the challenging backdrop of the pandemic and social unrest, we achieved strong second-quarter results, led by our digital business, with a return to growth in both the top and bottom line.”
For the three months, Foot Locker’s comps rose 18.6%. After remaining shuttered for several weeks, the majority of its 3,100 stores in 27 countries across North America, Europe, Asia, Australia and New Zealand have resumed business. The company also opened 18 new locations over the past several weeks, as well as remodeled or relocated 26 outposts and closed 31 units.
“As our global fleet of stores reopened, our customers responded with enthusiasm and energy to our assortments and visited our stores with a high intent to purchase,” Johnson added. “As the COVID-19 situation continues to evolve, we believe we have the right strategies and strong leadership in place to strengthen our customer connectivity, deepen our strategic relationships with our vendors, navigate the challenges ahead and emerge from this period better positioned than ever.”
At the end of the period, Foot Locker had about $1.37 million in cash, while its debt totaled $121 million. Although it did not pay a dividend or repurchase any shares during the second quarter, it announced today that the board of directors has reinstated the dividend program. It declared a quarterly cash dividend on the retailer’s stock of 15 cents per share, payable on Oct. 30.
“The second quarter was truly a testament to our team’s ability to be nimble and to our financial and operational discipline. We delivered a meaningful increase in sales, managed our expenses tightly and made progress towards our goal of improving our inventory position,” said EVP and CFO Lauren Peters. “Looking ahead, we believe the company is well positioned financially to maneuver through the evolving COVID-19 pandemic.”
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