reported first-quarter adjusted earnings of $1.60 a share and said it expects to reach the “upper end” of its earnings and revenue guidance for the fiscal year.
Shares of Foot Locker (ticker: FL) rose 9% to $33.03 on Friday.
First-quarter sales rose 1% to $2.18 billion, slightly below Wall Street forecasts, while comparable-store sales fell 1.9%, narrower than estimates that called for a decline of 4.1%.
The company said it expects adjusted earnings for the fiscal year at the high end of guidance of $4.25 to $4.60 a share. It expects sales at the high of down 4% to down 6%.
“Following our solid results from the first quarter, our strong inventory position going into the remainder of the year, and our strengthening vendor relationships, based on our current visibility, we now expect to achieve the upper end of our revenue and earnings guidance for the full year,” Chief Financial Officer Andrew Page said in a statement.
“Our balance sheet and real estate flexibility remain strategic assets for us as we continue to navigate this dynamic industry and serve the sport and sneaker community.”
Coming into Friday, the stock had gained more than 7% over the past five days, and at a close Thursday of $30.30 it’s gained nearly 6% since Barron’s recommended it on March 4. By contrast, the S&P 500 has tumbled just under 10% over the same time frame.
Analysts are still largely wary of the stock, with roughly two-thirds of those tracked by FactSet rating it a Hold or the equivalent. There are five bearish calls on Wall Street, compared with just three Buy ratings, a rarity as the analyst community tends to lean bullish.
There has been little in the way of guarantees in terms of retailer earnings this week, with big box players like
(TGT) warning of shifting consumer appetites—particularly away from discretionary categories—and ongoing supply chain and transportation cost headaches. A downbeat quarter from athletic footwear and apparel maker
(UAA) was another concern, as are the continuing lockdowns in China that have hurt
(NKE) and others.
The good news is that Foot Locker has been actively working to diversify away from Nike, and nearly three-quarters of its business is domestic. That doesn’t mean that it won’t be impacted by supply chain and freight woes, but it does mean less direct impact to restricted movement in Asia.
Foot Locker’s results could shed some light on Nike’s highly anticipated earnings, due out June 30. Given how rapidly the retail landscape has shifted, investors will be eager for any clues.
Write to Teresa Rivas at [email protected]