Foot Locker Inc. (FL, Financial) released its third-quarter financial results before the opening bell on Nov. 22. The athletic shoes and apparel retailer recorded stronger-than expected earnings owing to robust comparable store sales. However, revenue did not live up to expectations.
Snapshot of the quarter
Foot Locker registered adjusted earnings of $1.13 per share, up 18.9% from the same period last year. Group revenue came in at $1.932 billion, up 3.9% from the previous year. Analysts had anticipated earnings of $1.07 per share on revenue of $1.94 billion. Comps grew 5.7% year on year.
Reflecting on the company's performance, CEO Richard Johnson said:
"We are pleased with our performance in the quarter, which reflects the success of our strategic focus on building even deeper connections with our customers and further strengthening relationships with our vendors. Across the Company, we are making great strides in implementing our four strategic imperatives, which are designed to ensure we are best positioned to compete in the retail marketplace by inspiring and empowering youth culture while also strengthening our bottom line and driving value for our shareholders."
At quarter-end, company had cash and cash equivalents of $744 million and long-term debt of $122 million.
Segment details
Nike, which contributes approximately two-thirds of Foot Locker’s total sales, witnessed sales of $10.7 billion, up 7% on a year-over-year basis.
Geographically, Nike’s sales jumped 22% in China. In North America, sales grew less than what was expected (up 4% year over year), but this was offset by robust women’s apparel sales coupled with a surge in the group’s gross profit margin.
Store update
For the three months ending in August, the company launched 11 new outlets, modernized or repositioned 34 stores and closed down 25 stores. As of now, Foot Locker runs 3,160 outlets across 27 countries.
“As we enter the all-important holiday selling season, we will remain focused on execution to continue to position us to achieve our long-term financial objectives,” Chief Financial Officer Lauren Peters said.
Disclosure: I do not hold any positions in the stocks mentioned.
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