Update: Foot Locker Stock Beats Four-Decade Record
Foot Locker Inc. ended the trading day up more than 28 percent, to $40.82, marking the company’s single best trading day since 1977, according to CNBC’s stock analysis.
While the record-making spike is good news for the specialty athletic retailer — which has been experiencing a tough year amid slowing athletic trends — it’s worth noting that the company’s share price remains down more than 40 percent compared with this same day a year-ago.
What We Reported Earlier
Foot Locker Inc. just gave investors something to cheer about.
The specialty athletic retailer — which recently appeared to be slowing down after two years of blockbuster growth — today reported third-quarter earnings that were significantly better than expected.
On the heels of the announcement, Foot Locker shares spiked more than 26 percent. If shares close at those levels, it will be the company’s single best trading day since 1977, CNBC reported.
As of 10:30 a.m. ET, shares remained up more than 23 percent to $39.21.
During Q3, Foot Locker’s reported profit declined 35 percent to $102 million, or 81 cents per diluted share. But on an adjusted basis, profits were $110 million, or 87 cents per diluted share — handily topping analysts’ bets for diluted earnings per share of 80 cents.
Total sales decreased 0.8 percent to $1.9 billion but bested forecasts for sales of $1.8 billion. Comparable store sales declined 3.7 percent.
Market watchers and investors likely viewed today’s results as a sign of hope after recently being down on the retailer amid concerns of an athletic industry slowdown, bolstered by waning momentum at Nike and Under Armour.
During a call with investors today, chairman and CEO Dick Johnson said the firm cut corporate and division staff during the third quarter in a move to weather industry hardships.
“While it was a very important step in keeping us headed in the right direction on this journey through the turbulence that defines the retail industry today, it was also a very difficult and painful step,” Johnson said of the staff reduction, although he did not give specific numbers. “It was hard to see people who have contributed a great deal to the company leave the business.”
He further hinted that the retailer is planning more aggressive moves: “With the disruption we are witnessing in retail in general, in the athletic industry more specifically, we will have to make many critical decisions as we shape our future.” (In Q2, Foot Locker upped the number of planned store closures this yearto 135, from 100.)
“We see our biggest vendor, Nike, on the verge of a major breakthrough in terms of product innovation and customer engagement — and of course, we’re working closely with them on that,” Johnson told investors. “Adidas, meanwhile, has certainly proved that they, too, could compete at the highest levels.”
Looking ahead, Foot Locker’s chief said he believes the company can also top its fourth-quarter forecasts, which calls for a comparable sales decline of 3 percent to 4 percent.