Foot Locker stock popped 20% on Wednesday: explained here

Foot Locker Inc (NYSE: FL) popped 20% this morning after reporting a surprise beat on both top and bottom lines in its third financial quarter.

Foot Locker stock up despite lowered earnings outlook

The sportswear retailer now forecasts sales to drop by up to 8.5% this year versus up to a 9.0% decline it had guided for earlier.

Still, Foot Locker said its per-share earnings are expected to fall between $1.30 and $1.40 on an adjusted basis – down from up to $1.50 a share previously. Mary Dillon – its Chief Executive said in a press release today:

On the earnings call, she added that the turnaround initiatives were progressing well. Earlier this month, Foot Locker announced a new marketing deal with the NBA.

What Foot Locker is seeing in terms of consumer trends

Foot Locker saw robust sales this year over the Thanksgiving weekend, as per its earnings report.

Shoppers, it added, were comfortable paying full price as long as the product is new and trendy. According to CEO Mary Dillon:

Digital sales were up 0.4% in the recently concluded quarter excluding Eastbay. Foot Locker stock is still down about 40% versus its year-to-date high.

Notable figures in Foot Locker Q3 earnings release

• Earned $28 million versus the year-ago $96 million
• Per-share earnings also declined from $1.01 to 30 cents
• Total revenue declined 8.6% year-on-year to $1.99 billion
• Consensus was 21 cents a share on $1.96 billion revenue

An 8.0% hit to same-store sales in Q3 due to consumer softness was less than 9.7% that experts had forecast.