Foot Locker Retreats After 2Q Misses Expectations

NEW YORK (AP) — Shares of Foot Locker Inc. retreated on Friday, after the shoe retailer's break-even performance and 12.1 percent drop in same-store sales during the second quarter disappointed investors.

The stock declined 89 cents, or 7.9 percent, to $10.40 in afternoon trading.

After Thursday's closing bell, Foot Locker reported no profit, compared with year-ago earnings of $18 million. Same-store sales — an important retail metric that measures sales at stores open more than a year — dropped 12.1 percent.

Both profit and revenue missed Wall Street expectations, as well.

Sterne Agee analyst Sam Poser, who rates the stock "Buy," remained optimistic and said that even if sales only slightly improve in the third quarter, he expects far greater improvement in the fourth quarter as comparisons from a year ago get easier.

Poser said his checks on stores in states that are already in the back-to-school selling season are performing better than some might think.

Meanwhile, Stifel Nicolaus & Co. analyst Thomas D. Shaw said he knew the athletic retail industry would be hurt by stronger results a year ago from stimulus checks and a later back-to-school period, but thinks pressure on Foot Locker is more severe than Dick's Sporting Goods Inc.

"In Foot Locker's case, we see a business more driven by fashion and less driven by a sports enthusiast mindset — aiding Dick's along with what we see as a 'staycation' theme benefit." Shaw wrote in a client note.

Shaw rates shares of Foot Locker "Hold."