Foot Locker (FL) shares surged higher Friday after the sports apparel retailer posted stronger-than-expected second quarter earnings and said former Ulta Beauty (ULTA) boss and e-commerce expert Mary Dillon would replace the retiring Richard Johnson as group CEO.
Foot Locker said adjusted earnings for the three months ending In July came in at $1.10 per share, down 50% from the same period last year but firmly ahead of the Street consensus forecast of 81 cents per share. Group revenues, Footlocker said, fell 9% to $2.065 billion, just shy of analysts' estimates of a $2.07 billion tally, as same-store sales fell 10.3%.
The group, which relies on Nike (NKE) for around 60% of its annual sales, forecast fiscal 2022 profits of between $4.25 and $4.45 per share, down 15 cents from the higher end of its prior guidance.
Foot Locker said Johnson will continue as executive chairman until the end of the fiscal year in January, after which Dona Young will assume the new title of lead independent director
"Following our solid results for the second quarter, against record results last year, we remain confident in our ability to achieve earnings within our original guidance range," said CFO Andrew Page. "But recognizing that the back half will likely see more pressure than we originally anticipated, we now expect to be at the lower end."
"Our balance sheet, real estate flexibility, and relationships with vendors all remain strategic assets that will aid us in navigating ongoing macroeconomic volatility while we continue to serve the sport and sneaker communities," he added
Foot Locker shares were marked 23.1% higher in early trading Friday to to change hands at $39.24 each.
Nike, which typically accounted for around 75% of Foot Locker sales in a given year, is deep into its shift in focus towards direct-to-consumer sales, bypassing retailers as it seeks more control over its global supply chain.
Foot Locker cautioned in February that Nike would likely only account for around 60% of sales this year, clipping sale-store sales growth and lower than expected profits.
