Foot Lock stock opened 15% up on Friday: this is why
Foot Locker Inc (NYSE: FL) opened nearly 20% up this morning after reporting market-beating results for its fiscal third quarter and lifting its guidance for the full financial year.
CEO Dillon discussed the earnings print on CNBC
Higher markdowns resulted in a 270 basis points hit to gross margin this quarter. Still, CEO Mary Dillon is convinced the Foot Locker consumer is incredibly resilient. On CNBC’s “Squawk Box”, she said:
We offer a wide variety of brands and range of price points. Our consumers are showing extreme resilience. That’s why we raised our core guidance. [But] it will still be a promotional period. Our promotions are working.
For fiscal 2022, Foot Locker now forecasts its adjusted EPS to fall in the range of $4.42 and $4.50 on a narrower 4.0% to 5.0% annualised decline in net sales. It also expects up to a 5.0% increase in comparable sales versus an 8.0% to 9.0% decline that it had guided for earlier.
According to the Chief Executive, there’s significant room to the upside in the company’s digital sales.
There’s opportunity for us to be even bigger online than we’re today. It will continue to grow. We are at 16% of sales online today. I don’t know exactly where it’s going to land, but it’s definitely higher than this.
Investors interested in buying Foot Locker stock, though, should consider that the Wall Street has a consensus “hold” rating on it at writing.
Foot Locker stock up on better-than-expected Q3 results
Net income printed at $96 million versus the year-ago $158 millionPer-share earnings also fell significantly from $1.52 to $1.01Adjusted for one-time items, EPS stood at $1.27 as per the press releaseTotal sales went down marginally (0.7% YoY) to $2.17 billionSame-store sales up 0.8% were way better than 6.0% decline expected
Despite the year-over-year weakness, Foot Locker’s quarterly results were better than expected. Consensus was $1.11 of adjusted per-share earnings on $2.09 billion in sales.
Most importantly, merchandise inventory was up 29.5% year-on-year but down meaningfully from 52.1% in the prior quarter that we also covered “here” in August. For the year, Foot Locker stock is still down about 15%.
The post Foot Lock stock opened 15% up on Friday: this is why appeared first on Invezz.