Foot Locker Inc. shrugged off weak retail conditions in the U.S. after posting a first-quarter result that beat the Street’s expectations for the period.
The New York-based firm reported first-quarter earnings of $162 million, or $1.10 a diluted share, compared with $138 million, or 90 cents, year-on-year. On an adjusted basis, earnings rose 20 cents to $1.11. The result beat analysts’ consensus forecast for EPS of $1.06.
Revenue for the period improved 14 percent to $1.87 billion, ahead of analysts’ expectations of a 9.5 percent increase.
“We are off to a great start in 2014, with our first-quarter results representing the highest quarterly sales and profits in our history as an athletic company — for the third consecutive year,” Chairman and CEO Ken Hicks said in a statement.
Strong demand for athletic and basketball shoes helped drive the firm’s business in the quarter.
On a conference call with analysts and investors, Foot Locker COO and EVP Richard Johnson said, “Starting with footwear, where we have a lot of our strengths, our biggest category was also our strongest, with basketball up solidly in the teens. The gains were led by Jordan and Nike Marquette player shoes.”
Johnson added that Jordan has been strong for most of the year. “Jordan brand shoes like the True Flight, all of the retro releases and the player edition shoes, including Melo and CP, performed well in the quarter,” Johnson noted.
Analysts lauded the company for its strong performance amid the weak mall and retail environment in the U.S.
“Given the challenges across the retail landscape, this is a standout performance by Foot Locker, and we believe the stock should trade higher on these stellar results,” Canaccord Genuity analyst Camilo Lyon wrote in a note to clients. “We believe Foot Locker is in the trend sweet spot, with basketball likely driving much of the growth.”
He also reiterated his “buy” rating on the stock.
Foot Locker shares were up 1.3 percent, or 64 cents, at $48.81 in morning trading.