Foot Lock Traction Slips During Latest Quarter

Foot Locker continues its struggle getting back to its feet.

Same-store sales or sales at stores open a minimum of one year ended the most recent quarter sluggish, and the chain of sneaker stores saw overall net income drop.

However, its revenue as well as per share earnings that ended stronger than had been expected appeared to give investors a boost, and helped to drive up the stock price for the company on Friday.

Shares surged by over 27.5% in trading Friday afternoon.

One analyst on Wall Street said that investors are attempting to analyze from each retailer what the cyclical versus the structural changes were in their financial results.

The structural changes will eliminate retailers, while the cyclical ones are manageable, he added, and Foot Locker was able to show on Friday that it will succeed in navigating the overall structural shakeout.

During its quarter ending October 28, sales for stores opened a minimum of one year, an important industry metric for gauging financial performance, were down 3.7%. Net income fell from $157 million the prior year to $102 million.

However, earnings per share reached 81 cents and beat Wall Street expectations of 79 cents, and revenue of $1.87 billion the sneaker chain took in, exceeded the projections on Wall Street that averaged $1.82 billion.

Struggles at Foot Locker are a reflection of the broader trend amongst retailers of sporting goods who are having problems maintaining pace with the fickle and fast changing tastes of consumers.

They often must offer steep discounts in order to move products from their shelves that are slow sellers.

The chain also has previously blamed its lackluster sales on the lack of new and exciting styles that help shake the market up. But, Foot Locker says the overall landscape appears to look better as it enters its hugely important holiday shopping season.

While Foot Locker says it might have to cut prices to move less popular footwear from its shelves, it intends to be very well stocked with the trends that are most sought after for the upcoming new year.

CEO and chairman of Foot Locker Richard Johnson said the company remained focused on being the top retailer of athletic specialty footwear.

Johnson added that if the company sees a product or products that are not selling, it will be aggressive with its markdowns to ensure the product is sold and off the shelves quickly.