Foot Locker Stock Jumps. Sales Outlook Is Brighter.

Third-quarter sales of $1.99 billion beat expectations for $1.96 billion, and same-store sales fell 8%, narrower than an expected 9.7% drop.

Foot Locker also raised same-store guidance for the fiscal year ending Feb. 3, 2024, to a decline of 8.5% to 9%, up from a prior range of a decline of 9% to 10%. It also raised the midrange for sales guidance for the fiscal year to a decline of 8.25%, up from a decline of 8.5%. But the midrange outlook for adjusted earnings per share for the fiscal year slipped to $1.35 from $1.40.

Analysts had penciled in a same-store sales decline of 9.8% and adjusted earnings per share of $1.27.

“As we move into the fourth quarter, we are thrilled to be partnering with the NBA as an official league marketing partner in the U.S.,” President and CEO Mary Dillon said. “We look forward to rounding out our reset year and building on our progress in 2024 and beyond.” Foot Locker also said it is entering the India market in 2024 through long-term licensing agreements with Metro Brands Limited and Nykaa Fashion.

Shares were up 11% to $26.40 in premarket trading. Coming into Wednesday’s trading session, the stock has dropped 37% so far this year.

Earlier this week, Citi analyst Paul Lejuez downgraded Foot Locker stock to Sell from Neutral and maintained an $18 price target, citing a tough macroeconomic backdrop and heightened inventory levels, among other concerns.

“We believe a weakening macro/still elevated inventory levels are driving Foot Locker to be more promotional than planned this fall/holiday…We believe Footlocker will sacrifice margin near-term to get clean on inventory by year-end,” he wrote. 

Write to Emily Dattilo at [email protected]