U.S. retailer Foot Locker has reported a better-than-expected profit as the company’s long gestating turnaround strategy takes hold.
The New York City-based company, which primarily sells sneakers, reported earnings per share (EPS) of $0.22 U.S., which was well ahead of the $0.12 U.S. expected on Wall Street.
Revenue in the quarter totaled $1.88 billion U.S., which matched analysts’ forecasts. Sales were down 1.8% from a year earlier. But that was much better than a 3.1% drop that analysts had estimated.
Foot Locker also reaffirmed its full-year guidance, saying it expects sales to be in a range of a 1% decline to a 1% gain. Wall Street expected a full-year decline of 0.6%.
Foot Locker expects 2024 earnings of $1.50 U.S. to $1.70 U.S. a share, ahead of estimates of $1.57 U.S. per share.
Foot Locker has been trying to turnaround its business as consumers pullback their discretionary spending on items such as sneakers.
The company’s “Champs” brand has also weighed on financial results, with sales down 13.4% during the year’s first quarter.
Management said that they had to rely on promotions to drive sales, but that the current situation is improving.
Foot Locker’s average selling price rose during Q1, demonstrating that consumers are willing to pay full price for the right product.
The company is also revamping its retail stores where it does about 80% of its annual sales. Underperforming stores have been closed and existing locations have been given a refresh.
In April, the retailer unveiled its re-branded “store of the future,” which changes the previous Foot Locker format.
Foot Locker’s stock is up 15% on news of the company’s latest financial results. Before today (May 30), the company’s share price had fallen 27% year to date and was trading at $22.52 U.S. per share.
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