Shares of Foot Locker Inc. jumped as high as 23% in Monday premarket trading following the release of an unexpectedly upbeat forecast for its second-quarter profit and sales.
The athletic chain announced today that it expects earnings for the period ended Aug. 1 to be between 66 cents and 70 cents per share, versus the prior year’s 66 cents. It also reported that comparable store sales rose roughly 18% during those three months.
Analysts were looking at a loss of 60 cents per share, as well as revenues of $1.29 billion. As of 9:00 a.m. ET, Foot Locker’s stock was still up 16.5% to $32.
“As we continued to reopen stores throughout the quarter, we saw a strong customer response to our assortments, which we believe was aided by pent-up demand and the effect of fiscal stimulus,” chairman and CEO Richard Johnson explained in a statement. “This fueled our in-store sales and also drove continued momentum across our digital channels.”
He added, “While these undoubtedly remain challenging times, we are nonetheless pleased by the health of our category, our deep connections with our customers and the strength of our vendor relationships.”
During the first quarter, the New York-based retailer logged a net loss of $98 million, or 93 cents per share, compared with last year’s net income of $172 million, or $1.52 per share. Revenues for the three months ended May 2 declined 43.4% to $1.17 billion, and comps decreased 42.8%. Wall Street had anticipated earnings per share of 49 cents and $1.58 billion in sales.
Today, however, the majority of Foot Locker’s stores across the United States have reopened to the public after remaining shuttered for several weeks. At the end of the Q1 period, it had 3,113 stores in 27 countries spanning North America, Europe, Asia, Australia and New Zealand.
“Despite gross margin pressure from channel mix shift and a highly promotional environment,” added EVP and CFO Lauren Peters, “we were able to return to positive earnings per share due to the meaningful lift in top-line sales and disciplined expense management.”
The company plans to report Q2 2020 financials before market open on Aug. 21. It previously withdrew its full-year guidance in March, when the outbreak touched down in the U.S.