Foot Locker Stock Stumbles on Mixed Quarter as COVID Keeps 10% of Store Fleet Closed

Shares of Foot Locker Inc. tumbled in Friday premarket trading following the release of a mixed fourth-quarter financial report.

For the three months ended Jan. 30, the specialty athletic retailer saw earnings of $1.55 per share, compared with the prior year’s earnings per share of $1.63. Its EPS beat consensus estimates of $1.35 in earnings per share. Revenues, however, declined 1.4% to $2.19 billion, versus Wall Street’s predictions of $2.29 billion.

As of 8:30 a.m. ET, its stock was down more than 9% to $47.98.

“Our teams continued to execute nimbly in the fourth quarter to manage against the headwinds to our top line,” EVP and CFO Lauren Peters said in a statement. “Although over 10% of our store fleet is temporarily closed at present due to COVID-19 restrictions, the strength of our financial position leaves us well prepared to continue navigating the macro challenges, while protecting our bottom line and investing in our growth.”

According to the New York-based company, comps decreased by 2.7%. During the fourth quarter, it opened 19 new units, remodeled or relocated 39 outposts and closed 53 locations. At the end of January, it operated 2,998 stores across 28 countries.

For the 2020 fiscal year, Foot Locker notched earnings per share of $2.81, compared with the prior year’s $4.93. Its revenues fell 5.7% to $7.55 billion. By year-end, the chain’s cash and equivalents totaled $1.68 billion, while the debt on its balance sheet amounted to $110 million. It added that it has invested $159 million in its store fleet, digital platforms, supply chain and logistics capabilities, as well as other infrastructure.

What’s more, the company’s board of directors previously approved a 33% boost in its quarterly dividend to 20 cents per share, plus a $275 million capital investment program for 2021.

“Despite the challenging macro backdrop of COVID-related store closures and supply chain congestion, we delivered strong bottom-line results in the fourth quarter,” ended chairman and CEO Richard Johnson. “Our customers responded well to our solid product offering and exciting holiday campaign, which drove stronger margins and continued acceleration of our digital business. Based on the resiliency we have shown over the course of 2020, I am looking forward with renewed optimism as we continue to advance our long-term strategies and build value for all our stakeholders.”

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