Foot Locker Beats Q3 Earnings and Sales Forecasts, But Temporary Store Closures Resume as COVID Cases Spike

Foot Locker Inc. delivered a third-quarter earnings and sales beat as shoppers continued to spend on athletic and casual shoes amid the ongoing health crisis.

For the three months ended Oct. 31, the specialty athletic chain earned $128 million, or $1.21 per share, compared with the prior year’s profits of $122 million, or $1.13 per share. Analysts had forecasted earnings per share of 62 cents. Revenues, which rose 9% to $2.11 billion, soundly beat estimates of $1.94 billion.

“We delivered a strong top- and bottom-line performance in the third quarter, underscoring the strength of our in-store and online product assortments and the resilience of the Foot Locker Inc. brands,” chairman and CEO Richard Johnson said in a statement.

He added, “Although the back-to-school selling season kicked in later than usual due to COVID-19-related delays, momentum built as the quarter progressed, and we were pleased with our customers’ continued strong engagement across our family of brands. Our teams again executed well in a dynamic environment and did a tremendous job maintaining a seamless, safe and exciting shopping experience for our customers.”

Overall, Foot Locker’s comps increased 7.7%. The retailer, which has managed to stay relatively agile amid the coronavirus pandemic, is now — like much of its retail peers — contending with another wave of pandemic-induced store closures. As countries around the world report another wave in the outbreak, more than 10% of Foot Locker’s global brick-and-mortar fleet is temporarily closed as a result of government-mandated restrictions.

During the quarter, the company opened 27 stores, remodeled or relocated eight outposts and permanently shuttered 95 stores, including 70 Runners Point locations. It currently operates a total of 3,032 stores in 27 countries across North America, Europe, Asia, Australia and New Zealand.

For the upcoming holiday shopping season, the retailer plans to shut down all of its stores in the United States on Thanksgiving. It is expected to continue operating on Black Friday. A number of other companies — counting Target, Kohl’s and Dick’s Sporting Goods — have also made the decision to dim their lights on Turkey Day while offering markdowns via online channels to encourage customers to do their shopping from the comfort of their own homes.

“We are taking proactive measures for the upcoming holiday period to deliver outstanding experiences both in our stores and online,” added EVP and CFO Lauren Peters, “while ensuring the safety of our team members and customers.”

At the end of the period, Foot Locker had $1.39 billion in cash, while the debt on its balance sheet amounted to $131 million. It opted against providing an outlook for the full year due to pandemic-related uncertainties.

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