Foot Locker Stock Soars As New CEO Mary Dillon Drives Q3 Earnings Beat, Forecast Boost
Updated at 10:19 am EST
Foot Locker (FL) - Get Free Report shares surged higher Friday after the sports apparel retailer posted stronger-than-expected third quarter earnings, and boosted its full-year profit forecast, under the new leadership of former Ulta Beauty CEO Mary Dillon.
Foot Locker said adjusted earnings for the three months ending in October came in at $1.27 per share, down 27% from the same period last year but firmly ahead of the Street consensus forecast of $1.11 per share. Group revenues, Footlocker said, rose 0.7% to $2.173 billion, just shy of analysts' estimates of a $2.09 billion tally, as same-store sales fell by a smaller-than-expected 0.8%.
The group, which relies on Nike (NKE) - Get Free Report for around 60% of its annual sales, now sees fiscal 2022 profits of between $4.42 and $4.50 per share, up from its prior forecast of between $4.25 and $4.45 per share, with full-year sales falling between 4% and 5% from 2021 levels.
"Foot Locker's solid third quarter results in the midst of ongoing macroeconomic challenges are a testament to the strengths of this organization that I am honored to now be leading," said Dillon, who replaced the retiring Richard Johnson as group CEO in August. "Despite the tough environment, our expanding customer base remained resilient, and I'm proud that our team delivered sales above our expectations, thanks to their exceptional execution."
"I see tremendous opportunity to further leverage the power of our brand equity and our incredible field team to drive our growth in this exciting category," she added.
Foot Locker shares were marked 10.8% higher in early Friday trading to change hands at $36.59 each, a move that would still leave the stock down more than 17% for the year. Nike shares gained 0.2% to $105.54 each.
Earlier this fall, Nike cautioned that "higher markdowns" will be needed to reduce its bloated global inventory, pressuring profit margins for the world's biggest sports apparel company.
Nike said shifting the goods will likely narrow margins by between 2% and 2.5%, with most of the pressure coming during the current quarter. A surging U.S. dollar, which hit a fresh 20-year peak against its global currency peers in September, will likely clip $4 billion from its annual revenue forecast, Nike said.
