NEW YORK (

TheStreet

) --

Foot Locker

(FL) - Get Report

shares rose late Thursday after the sneaker seller nearly doubled Wall Street's profit expectations with its third-quarter report.

After the bell, the company said it earned $52 million, or 33 cents a share, for the three months ended Oct. 31, up from a year-ago adjusted profit of $16 million, or 10 cents a share, and well beyond the average estimate of analysts polled by

Thomson Reuters

for earnings of 17 cents a share.

The stock jumped more than 9% to $17.95 on after-hours volume of nearly 65,000. Based on a regular session close at $16.44, the shares were up about 50% so far in 2010.

Foot Locker cited an increase of 8.1% in same-store sales for the profit jump, as well as expanding gross margins. The company's sales totaled $1.28 billion in the latest quarter, up 5.4% year-over-year.

"These improving results reflect the hard work of our associates worldwide as the organization continues to implement the initiatives outlined in our new strategic plan," said Ken Hicks, the company's president and CEO. "It is encouraging that our increased sales and earnings reflect meaningful improvements in each of our operating divisions in the U.S., as well as in our largest international markets."

Of the 16 analysts covering Foot Locker's stock, seven rated it at hold, six were at strong buy, one was at buy and two were at underperform headed into the report. Wedbush Morgan initiated coverage of the shares earlier on Thursday with an outperform rating and a 12-month price target of $21. The accompanying research note was rather prescient as it highlighted the company's plans to improve gross margins.

"We view FL as an early stage margin recovery story that has both top-line and gross margin drivers to support a return to normalized EBIT

earnings before interest and taxes margins." Wedbush said, adding later: "Ultimately we believe FL can return to mid-high single digit operating margins resulting in earnings growth of 20% annually through 2012."

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Written by Michael Baron in New York.

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