Foot Locker stock pops 15% on Q1 earnings

on May 30, 2024
  • Foot Locker reported its financial results for the first quarter on Thursday.
  • Here's what its CEO Mary Dillon told CNBC in an interview today.
  • Foot Locker stock is still down some 25% versus its year-to-date high.

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Foot Locker Inc (NYSE: FL) is up 15% in premarket on Thursday after reporting better-than-expected earnings for its fiscal Q1.

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Foot Locker stock gains on reaffirmed outlook

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Investors are cheering also because the management reiterated its guidance signalling the turnaround is finally starting to yield results.

$FL now forecasts its sales to fall between down 1.0% to up 1.0% this year. Analysts, in comparison, were at a 0.6% decline. Mary Dillon – the chief executive of Foot Locker told CNBC today:

The reason I feel confident, we’re launching an enhanced FLX rewards programme, so we have a lot of opportunity with rewards.

The footwear firm forecasts up to $1.70 of adjusted per-share earnings in its fiscal 2025 versus analysts at $1.57. Foot Locker stock is still down more than 25% versus its year-to-date high.  

Notable figures in Foot Locker Q1 earnings report

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  • Earned $8.0 million versus the year-ago $36 million
  • Per-share earnings also declined from 38 cents to 9 cents
  • Adjusted EPS printed at 22 cents as per the earnings report
  • Sales inched down 3.0% year-over-year to $1.88 billion
  • Consensus was 12 cents a share on $1.88 billion in revenue

Foot Locker ended its first quarter with inventory down 5.6% versus a year ago. CEO Dillon also said in an interview with CNBC on Thursday:

We’re launching a revamped mobile app to drive customer engagement and commerce and we see growth opportunities … with all our brand partners, including returning to growth with Nike in holiday quarter.

Wall Street currently has a consensus “hold” rating on Foot Locker stock.

An overview of $FL’s balance sheet

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Foot Locker reported a 120 basis points hit to gross margin on Thursday. However, markdowns did moderate sequentially, it added.

The retail firm ended the quarter with $282 million in cash and equivalents and $446 million of debt. Its chief executive Mary Dillon said in a press release today:

We are well-positioned with fresh assortments as we approach the summer and Back-to-School seasons. I remain confident that the Lace Up Plan is positioning the Company for sustainable growth and shareholder value creation.

Last week, Joe Feldman – an analysts of Telsey Advisory reiterated his “hold” rating on Foot Locker stock. $FL is trading below his $26 price objective in premarket at writing. Note that the retail firm does not currently pay a dividend.

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