Foot Locker Inc. shrugged off the unseasonably cold winter in the U.S. to post a 16 percent lift in fourth-quarter profits, boosted by robust sales of basketball and athletic shoes.
The company reported net income of $121 million, or 81 cents a diluted share for the quarter, compared with $104 million, or 68 cents, in the prior corresponding period. The result beat analysts’ consensus forecast of 76 cents. Excluding one-off items, Foot Locker earned 82 cents a share, up from 64 cents a year earlier.
Sales for the quarter totaled $1.79 billion, versus $1.71 billion a year earlier, topping analysts’ consensus forecast of $1.76 billion.
“I am very proud of the progress the entire team at Foot Locker is making toward reaching our long-term goals and objectives,” Foot Locker CEO Ken Hicks said in a statement. “While we accomplished a great deal in 2013, we have many more opportunities to improve the business further.”
UBS retail analyst Michael Binetti lauded the company for its better-than-expected quarterly results, adding that Foot Locker will likely benefit from a 6 percent increase in Nike basketball shoes this year and strong growth of the Nike brand in Western Europe.
“[Most] importantly, 2014 guidance was above what we believe the sell-side and buy-side [analysts and investors] expected, which should create a positive backdrop for the stock today,” he wrote in a note to clients.
Shares of Foot Locker rose 7 percent to $45.52 in morning trading.
For the full year, the company reported diluted earnings per share of $2.85, in line with the prior year and higher than analysts’ expectations of $2.80. Sales for fiscal 2013 were $6.5 billion, up from $6.2 billion a year earlier.
“By category of business, footwear was the driver of our success in the quarter with a gain in the mid-single [digits]. Average selling prices and unit sales were both up,” CFO and EVP Lauren Peters said on a conference call with analysts and investors. “Basketball was definitely the strongest component of footwear, with many divisions posting double-digit gains.”
Healthy sales of the Jordan brand and Timberland boots added to the strong quarterly result, Peters said.
Additionally, the firm announced a capital expenditure program of $220 million for 2014, which executives said would be funneled largely to store remodeling.