In the fight to win over fickle consumers in a challenging retail environment, Foot Locker Inc. is the block-and-counter pro.
Bolstered by ongoing strength in the athletic category as well as a curated selection from some of the industry’s most sought-after brands, the athletic specialty retailer today delivered another blockbuster quarter to end fiscal year 2016. As of 10:55 a.m., investors continued to cheer the results, sending the stock soaring more than 8 percent to $74.08.
Foot Locker said its Q4 sales climbed 5 percent year-over-year, to $2.1 billion, while its comparable store sales gained 5 percent, topping estimates for a comp gain of 4.5 percent. (Sales results were in line with forecasts.)
Profits rose 20 percent year-over-year, to $189 million, or $1.42 per diluted share. Adjusted diluted earnings per share, at 37 cents, handily topped Wall Street’s bets for diluted EPS of $1.32.
“In today’s challenging, fast-changing retail landscape, the results [we delivered] are a truly exceptional achievement,” chairman and CEO Dick Johnson said during the firm’s conference call. “It took an incredibly talented team of associates to produce a sixth consecutive year of all-time best financial performance as an athletic specialty company.”
Johnson went on to highlight solid sales of Puma, Adidas and Nike branded product as key drivers during the quarter. Notably, Under Armour — which is grappling with slowing growth — was not mentioned among Foot Locker’s top-performing labels in Q4.
Collectively, across the company’s banners, digital sales were up more than 20 percent in the U.S. According to the CEO, e-sales in Europe and Canada were up even more. The firm’s Eastbay banner, on the other hand, saw a mid-single-digit decline in e-commerce revenues.
For the full year, Foot Locker’s sales advanced nearly 5 percent, to $7.8 billion, while profits rose 23 percent, to $664 million, or $4.91 per diluted share. Adjusted diluted EPS gained 12 percent, compared with the previous year, to $4.82.
Looking ahead, the company predicts a mid-single digit comparable sales gain and a double-digit earnings per share increase in 2017.