Foot Locker (FL) reported better-than-expected third-quarter earnings Friday morning. Foot Locker stock soared premarket Friday after beating analyst views and raising its outlook.
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Rivals such as Dick’s Sporting Goods (DKS) also rallied, along with key supplier Nike (NKE).
Foot Locker earnings fell 34% to $1.27 per share while revenue slid less than 1% to $2.17 billion. But Wall Street analysts expected earnings of $1.11 per share on $2.09 billion in sales for the mall-based athletic shoe seller
Comparable-store sales edged up 0.8% over the year for Q3, defying views for a 6% decline.
Inventories jumped 29.5% to $1.69 billion. But Foot Locker says its inventory quality and aging are healthy, positioning the retailer well for the holiday fourth quarter.
Foot Locker raised its full-year EPS outlook to $4.42-$4.50 from $4.25-$4.45. Total sales are expected to decline 4% to 5%, vs. its prior target of a 6%-7% drop. Comps should fall 4%-5% vs. its old goal of an 8%-9% slide.
The results could be a good omen for other shoe and athletic apparel retailers. Foot Locker is a top Nike partner, who has yet to set a reporting date. And Dick’s Sporting Goods announces results Tuesday.
Foot Locker Stock
FL stock soared 13% to 37.37 Friday, signaling a big jump above the 50-day moving average. Foot Locker stock is moving toward a 40.10 buy point from a bottoming base.
DKS stock rose 3% before the open, working back toward its 50-day line after plunging Wednesday as Target (TGT) earnings and guidance slammed retailers. NKE stock climbed 1%. Academy Sports & Outdoor (ASO) and Under Armour (UAA).
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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