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.
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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