Foot Locker surprised investors on Friday with first-quarter earnings that fell short of analysts’ expectations following several quarters of strong results.
The sneaker chain reported net income of $172 million, or $1.52 per share, for the three months ended May 4, while Wall Street had forecast earnings of $1.60 per share.
The company also cut its earnings outlook for full-year 2019, buying back just 32,000 shares for $1.8 million during the quarter (it announced a three-year $1.2 billion stock buyback program in February), but it reiterated its projections for sales, gross margin and selling, general and administrative expenses.
While the earnings miss — Foot Locker’s first in five quarters — sent the company’s stock plummeting nearly 10% in premarket trading, the retailer was at least able to deliver sales growth during the quarter — something many others in the sector have fallen short of this week. FL’s same-store sales were up 4.6%, while total sales reached $2.08 million, compared with $2.03 million during the same period last year. Analysts had forecast $2.11 billion.
“We started the year with great energy, innovative products and exciting customer events, leading to solid top-line growth in the first quarter with strong performance across our regions, banners, channels and categories,” said Foot Locker’s president and CEO, Richard Johnson. “Based on the momentum we have underway, we feel
confident that the updated strategic imperatives we introduced at our Investor Day in March position us to deliver on our long-term goals.”
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Foot Locker, like many retailers, is in the process of trimming its store count. In early March, following a blockbuster fourth-quarter earnings report, it announced plans to close 165 stores globally in 2019. In the first quarter, it completed 34 of these closures, while opening 14 new stores and remodeling or relocating an additional 13.
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