June 22, 2024

Foot Locker’s “Lace Up” turnaround strategy may be helping the retailer get a leg up, but it still has a ways to go.

Shares of Foot Locker initially jumped by 19% during afternoon trading on Thursday, after the company disclosed that its comparable sales had declined less than Wall Street analysts expected for its first fiscal quarter of 2024. The retailer said comparable sales fell 1.8%, beating Wall Street analysts’ estimates published by StreetAccount (a 3.1% decline) as well as FactSet (a 1.9% decline).

“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,” said Mary N. Dillon, Foot Locker’s chief executive officer, in a statement.

The New York-based company met Wall Street’s revenue expectations and slightly beat earnings-per-share estimates. For the first quarter, it reported revenue of $1.88 billon and adjusted earnings of $0.22 per share. Analysts forecasted it would generate $1.88 billion in revenue and roughly $0.12 cents per share, according to FactSet.

Foot Locker reaffirmed its full-year guidance, and expects sales to either decline by 1% or increase by 1%.

Franklin R. Bracken, Foot Locker’s chief commercial officer, told investors during the earnings call on Thursday that the company is “confident” it has “momentum” that will help it grow its brand partner relationships, as well as its relationship with customers. That sentiment is in stark contrast to the retailer’s fourth quarter earnings report in March, when it said that its profitability goal would be delayed by years.

Nonetheless, Foot Locker’s got plans to expand its footprint, online and in-store. In April, it debuted a revamped version of its store inside a Wayne, New Jersey-based mall, which it dubbed the “store of the future.” It plans to open four new and improved locations this year.

Moreover, the sneaker seller said it is on track to roll out a new Foot Locker mobile app later this year, which will provide a “faster, more modern shopping experience” that will also serve as a hub for its new loyalty program, FLX Rewards.

Dillon said the company is “making strong progress” in its digital transformation efforts, and is aiming for e-commerce sales to represent 25% of its total sales by 2026.

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