Higher sales and better margins propelled Foot Locker Inc.’s first-quarter profits past Wall Street expectations.
For the three months ended May 1, the New York-based footwear retailer’s net income grew 74 percent to $54 million, or 34 cents a diluted share. A year ago, the firm posted profits of $31 million, or 20 cents a share.
Sales in the period climbed 5 percent to $1.28 billion from $1.21 billion in the comparable period. Same-stores sales increased 4.8 percent in the quarter, the company said.
The retailer’s gross margin grew by 140 basis points to 30.7 percent. Its inventory was down 7 percent.
Footwear was a source of particular strength for Foot Locker, according to Ken Hicks, chairman, CEO and president of Foot Locker. “The athletic footwear industry in general is benefiting from new exciting styles and technology,” he said on a call with investors. Hicks said athletic footwear sales in the U.S. rose in the high single digits, led by growth in the men’s running category and what he categorized as the “explosive” growth of toning in the women’s market.
Going forward, Hicks said, he expects to see footwear continue to outperform.
“Our key suppliers are providing us with new, exciting footwear products that we can offer to our customers [and] an improving athletic trend is emerging as evidenced by industry sales gains in technical running and the relatively new toning category,” he said.
The results exceeded the estimates of analysts polled by Yahoo Finance, who had expected earnings per share of 28 cents on revenues of $1.26 billion, on average.