The New York-based company reported Q2 EPS of $0.94, beating Wall Street’s view of $0.90. Revenue rose 5% from last year to $1.78 billion, also exceeding estimates for $1.76 billion.
A big reason for the earnings beat was Q2 comparable-store sales, which rose 4.7% from last year. Also known as same-store sales, these comps are an important measure of a brick-and-mortar retailer’s health, since they track the performance of stores open at least on year. This provides for a fairer comparison, since the company may have opened or shuttered stores since Q2 last year.
Other interesting notes from the report included:
- Q2 gross margin rate rose to 33.0% from 32.6% last year.
- Q2 selling, general, and administrative expenses rose to 19.7% percent of sales from 19.5% last year.
- Q2 inventories were $1.339 billion, up 1.7% from last year.
- FL ended Q2 with $945 million in cash and equivalents, versus debt of $129 million.
- In Q2, FL opened 23 new stores, remodeled or relocated 64 stores, and closed 18 stores.
From the press release:
“As a Company, Foot Locker has strong leadership positions in the athletic industry, with the most important being our deep understanding of the core customer for each of our banners,” said Richard Johnson, Chairman of the Board and Chief Executive Officer. “We share this understanding with our key vendors, which enables us to partner with them to deliver the trend-right, premium footwear and apparel assortments our customers seek, which in turn has led to consistently outstanding financial results such as we announced today. Within the second quarter, we drove comparable sales gains across basketball, running, and classic footwear, as well as apparel. We also posted gains in all regions and channels in which we operate, reflecting the success of our strategic initiatives to build our Company to be an enduring retail leader with strengths across many dimensions.”
Foot Locker shares rose $2.07 (+3.36%) to $63.75 in premarket trading Friday. Prior to today’s report, FL had fallen about 5% year-to-date, compared with a 7% gain in the benchmark S&P 500 in the same period.