Why Foot Locker stock jumped today

Why Foot Locker stock jumped today
Why Foot Locker stock jumped today

What happened

Shares of Foot locker (FL 8.73%) surfaced today after the sneaker retailer posted better-than-expected results in its third-quarter earnings report and raised its guidance.

The stock closed up 8.7% on the news after trading as high as 18% on Friday morning.

So what

Comparable sales rose 0.8% in the quarter and overall revenue fell 0.7% to $2.17 billion, but that was better than estimates of $2.09 billion.

Gross margin for the quarter fell 270 basis points as, like other retailers, the company struggled with higher than normal markdowns and higher supply chain costs. In the end, the company reported adjusted earnings per share of $1.27, down from $1.74 in the year-ago quarter, but it still beat the consensus of 1.11. $.

CEO Mary Dillon, who came to the company after Ultimate beautysaid, “Foot Locker’s strong third quarter results amid the current macroeconomic challenges are a testament to the strengths of this organization which I am honored to now lead. Despite the challenging environment, our growing customer base remained resilient, and I’m proud that our team delivered sales above our expectations, thanks to their exceptional execution.”

Now what

Foot Locker also raised its guidance, showing signs of strength in a difficult environment. It now sees adjusted earnings per share of $4.42 to $4.50, up from $4.25 to $4.45, and it also raised its full-year comparable sales outlook to a decline. from 4% to 5%. For the fourth quarter, it expects comparable sales to decline 6% to 8% and adjusted EPS of $0.45 to $0.53.

While these numbers show weakness in the retail sector, the uptick in the forecast was good enough to please investors, especially for a stock trading at a price-earnings ratio of just 8.

. Foot Locker stock jumped today

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