Shares for Foot Locker shot up 13.5 percent to $67.62 at market open following the release of fourth-quarter earnings results that soared past Wall Street expectations.
The retailer’s stronger-than-expected growth was led by same-store sales, which increased 9.7 percent — more than double the number analysts’ had predicted. It also reported profits of $158 million, or $1.39 per share, for the three months ending Feb. 2.
On an adjusted basis, Foot Locker earned $1.56 per share, a 37 percent gain from the same time last year and well ahead of the $1.40 forecast. Total sales for the period rose 2.8 percent to $2.27 billion, handily topping analysts’ bets for sales of $2.19 billion.
“The fundamentals of our core business remain strong and led to meaningful improvement in our financial results, not only during the fourth quarter but throughout 2018,” said chairman and CEO Richard Johnson. “This positive performance was made possible by our team’s unrelenting focus on providing compelling assortments to our customers, launching exciting collaborations with our strategic partners, both long-standing and new, and making our stores and digital channels unique and exciting destinations.”
For 2018, Foot Locker saw revenues that hit $7.94 billion — a gain of 2 percent from the previous year — while comparable-store sales climbed 2.7 percent. Full-year profits increased to $541 million, or $4.66 per share.
The New York-based athletic company continues to make changes to its closing strategy, shuttering 56 stores but opening 11 new locations and remodeling or relocating another 33 during the fourth quarter.
Within the past 13 months, it has also boosted its strategic stakes in other companies as the retailer has sought continued relevance with younger customers.
On Tuesday, Foot Locker announced that it had put $12.5 million toward children’s apparel company Rockets of Awesome. The move came only a few weeks after it made a $100 million bet in GOAT Group, as well as a month following its $2 million strategic investment in Pensole Inc. and a $3 million Series Seed II investment in children’s lifestyle brand Super Heroic. Last January, it also contributed $15 million in Series A funding toward Los Angeles-based women’s luxury activewear maker Carbon38.
Foot Locker now expects double-digit growth in the coming year.
“Looking at 2019, we believe that by maintaining our focus on bringing differentiated experiences to youth culture, we can continue to elevate our financial performance by generating a mid-single-digit comparable sales gain and another double-digit percentage increase in earnings per share,” Johnson said.
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