Foot Locker beats Wall Street forecasts as ‘lace up’ turnaround plan is working

Foot Locker (NYSE:FL) stock surged 15% as its first-quarter profit easily exceeded expectations, indicating that the retailer’s “Lace Up” turnaround strategy is gaining traction.

Net income for the three-month period was reported at $8 million, versus $36 million a year ago. On a per-share basis, earnings (adjusted EBITDA) came in at 22 cents which was much better than the consensus Wall Street forecast of just 12 cents.

It outshone the quarterly revenue number of $1.87 billion which was actually shy of the $1.89 billion that analysts had anticipated.

The financial metrics were good enough for Foot Locker to retain its full-year outlook – envisaging between $1.50 and $1.70 per share of earnings, based on somewhat neutral sales projections (pitched between a 1% decline and 1% growth).

Specifically, management was optimistic about upcoming summer trading and the subsequent ‘back-to-School’ shopping season.

“We are well-positioned with fresh assortments as we approach the summer and Back-to-School seasons,” chief executive Mary Dillon said.

She added: "Through our Lace Up Plan, we are strengthening our brand partnerships, enhancing customer engagement through digital and loyalty investments, and solidifying our position at the intersection of basketball and sneaker culture.

“I remain confident that the Lace Up Plan is positioning the company for sustainable growth and shareholder value creation."

In New York, Foot Locker stock was up $3.33 or 14.79% changing hands at $25.89.