Foot Locker Pulls Off Incredible Turnaround

Retail is so back

BREAKING NEWS

After almost a full year of horrific earnings calls, Foot Locker has finally pulled out of their dive with a solid earnings and profitability beat. Let's break down how they put the pieces back together: 

WHAT HAPPENED

Foot Locker managed to generate a decent $0.30 EPS from $1.99 billion in revenue for Q3. While both of these figures declined from last year, this wasn't nearly as bad as the market had already priced in. Foot Locker initiated better partnerships this quarter that managed to arrest their fall. 

BOTTOMING OUT

More importantly, Foot Locker also boosted their guidance to reflect that same-store sales will only fall 8-9% in 2023. Analysts were expecting a shortfall as high as 10%, so this is a great sign that the slide really is over and Foot Locker is finally on the mend. More importantly, Foot Locker will also be entering the critical India market in 2024, which brings some great prospects for growth. 

WHY IT MATTERS

Even though concerns about inflation and consumer spending are only hitting a fever pitch now, companies like Foot Locker have been a canary in the coal mine for declining sales ever since January of this year. Foot Locker had a terrible time maintaining profits as sales bottomed out earlier this year. Even though Foot Locker's profitability is still down this year, all of these current factors indicate that the company can pull out of this dive. That was enough for investors in the early market, who pushed Foot Locker stock up over 11% in early trading. Of course, Foot Locker is still down well over 30% on the year, but progress is being made here.