Shares for Foot Locker Inc. have taken a tumble in early morning trading despite a second-quarter earnings and sales beat from the athletic footwear and apparel seller.
As of 9:45 a.m. ET, the stock remained down nearly 11 percent to $47.33.
For the period ended Aug. 4, Foot Locker said its sales advanced 5 percent to $1.78 billion, topping analysts’ bets of $1.76 billion. Its profits saw gains of more than 70 percent to $88 million, or 75 cents per diluted share, versus analysts’ forecasts of 70 cents per diluted share.
Comparable store sales, meanwhile, edged up 0.5 percent during the period — just shy of market watchers’ expectations for a 0.7 percent gain.
“Our performance reflects the work we are doing on several fronts to position the company to succeed in a rapidly evolving retail environment,” said Chairman and CEO Richard Johnson. “We remain optimistic that our improving product flow and depth in premium styles positions us to deliver stronger comparable sales growth in the second half of 2018.”
After posting consistent blockbuster results during the height of the athletic boom in 2015 and 2016, the previous year had produced some softness for Foot Locker, which cited product staleness as it moved to trim its store fleet.
“We are encouraged by the results we delivered, including a return to growth on the top line combined with gross margin expansion,” said EVP and CFO Lauren Peters. “We maintained our disciplined approach to inventory management in the second quarter, which is enabling us to flow improving merchandise assortments into the business for back-to-school and the holidays.”
The company’s gross margin rate increased to 30.2 percent in Q2 from 29.6 percent a year ago.
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