Consumer stocks were higher in morning trading on Friday with shoe retailers Shoe Carnival (SCVL, Financial) and Foot Locker (FL, Financial) gaining after earnings beats. In the S&P 500, the real estate, consumer staples and consumer discretionary sectors were all up greater than 0.40%.
Shoe Carnival
Shoe Carnival showed a gain of 17.70% after reporting earnings Thursday after the closing bell. Shoe Carnival posted an impressive earnings beat of 12 cents with first quarter earnings per share of 83 cents. Revenue for the quarter was just below estimates at $257.45 million but still gained 1.6% year over year.
Operating primarily across the U.S., the company posted total revenue of $257.4 million, an increase of 1.6% from the comparable quarter. The revenue report missed estimates by $4.57 million. During the quarter the company closed three stores with decreased revenue from the store closings a leading factor for the slight revenue miss. In 2018, the company says it plans to open three new stores and close 20 to 25 stores.
Profitability was strong for the quarter, helping the stock price to gain. Gross profit increased 7.17% to $77.3 million. Operating income also increased 30.19% to $17.3 million. Adjusted earnings per share were 72.92% higher than the comparable quarter at 82 cents.
Overall the quarter’s better-than-expected results led to an increase in guidance. Management reported that it would be increasing both the low and high end of its expected diluted earnings per share guidance for 2018 to $1.90 to $2.05. Guidance for 2018 is projected to be higher than 2017’s adjusted earnings report of $1.49.
Foot Locker
Foot Locker showed a gain of 15% in morning trading after the company reported earnings before the opening bell on Friday that beat the street’s estimates. For the first quarter, the company posted earnings per share of $1.45, beating estimates by 20 cents. Revenue for the quarter was $2.03 billion beating by $70 million.
The company operates across several brands and geographies.
In the first quarter revenue of $2.03 billion was up 1.20% from the comparable quarter. For the quarter, new and alternative stores helped revenue with comparable-store sales reporting a decrease of -2.8%.
Adjusted earnings per share showed an impressive 6.62% comparable quarter increase at $1.45. However, income from operations and adjusted net income were both lower than the comparable quarter. Income from operations was reported at $224 million, down from $268 million. Adjusted net income was reported at $174 million down from $224 million.
Management had a positive outlook for comparable store sales through the end of the year which helped to contribute to the positive market sentiment.
According to Foot Locker Chairman and CEO Richard Johnson, the company expects to see positive comparable-store sales growth in the subsequent quarters of the year.
Disclosure: I do not directly own any shares of Shoe Carnival or Foot Locker.
