Foot Locker Shrugs Off Nike Pullback, Tops Earnings Estimates
2022.05.20 17:21
By Sam Boughedda
Investing.com — Shares of Foot Locker Inc (NYSE:FL) jumped more than 9% in early Friday trading after the company beat first-quarter earnings estimates.
The company posted earnings of $1.60 per share, beating estimates of $1.50. The results show the company appears to have shrugged off the impact of Nike ‘s (NYSE:NKE) move to focus more on sales via its direct-to-consumer route.
They have since started a long-term partnership with Nike rival Adidas (OTC:ADDYY), targeting over $2 billion in retail sales by 2025, almost tripling levels from 2021.
Foot Locker revenue came in below estimates at $2.18 billion. In addition, first-quarter comparable-store sales declined 1.9%, with the company saying apparel significantly outpaced footwear.
Gross margin fell by 80 basis points compared to last year, which it said was driven by higher supply chain costs and “slightly higher markdowns versus historically-low levels.”
Foot Locker’s outlook on the full-year 2022 was positive, stating it expects to reach the upper end of its 2022 sales and earnings range.
“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,” said Andrew Page, Executive Vice President and Chief Financial Officer of Foot Locker.
“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,” added Page.
