Foot Locker Smashes Q3 Profit Forecast, Holds Back on Holiday Guidance

Foot Locker blasted Wall Street forecasts for its third quarter earnings, with stronger-than-expected same store sales amid a robust back-to-school season.

Foot Locker Inc.  (FL) - Get Report posted stronger-than-expected third quarter earnings Friday as the athletic retailer took advantage of a solid performance from Nike  (NKE) - Get Report and improving consumer spending during the back-to-school season.

Foot Locker said adjusted earnings for the three months ending on November 1 came in at $1.21 per share, up 7% from the same period last year and well ahead of the Street consensus forecast of 63 cents per share. Group revenues, Footlocker said, rose 9% to $2.106 billion as same-store sales jumped 7.7%.

The retailer decline to provide full-year or holiday quarter guidance, however, but noted that end of October inventories were 8.5% lower from last year at $1.193 billion.

"We delivered a strong top- and bottom-line performance in the third quarter, underscoring the strength of our in-store and online product assortments and the resilience of the Foot Locker, Inc. brands," said CEO Richard Johnson. "Although the back-to-school selling season kicked in later than usual due to COVID-19-related delays, momentum built as the quarter progressed, and we were pleased with our customers' continued strong engagement across our family of brands."

"Our teams again executed well in a dynamic environment and did a tremendous job maintaining a seamless, safe, and exciting shopping experience for our customers," he added.  

Foot Locker shares were marked 1.3% lower in early trading following the earnings release to change hands at $40.70 each.

Nike, which contributes around 70% of Foot Locker revenues, said its sales in the three months ending in August slipped 1% to $10.6 billion, but noted that digital-channel sales rose 82% from last year as brick-and-mortar stores remained closed during the coronavirus pandemic. 

The group said it sees fiscal 2021 revenues "to be up high single-digits to low double-digits versus prior year".