Foot Locker to close Footaction stores after colossal Q1 earnings

Footwear and sportswear retailer Foot Locker (FL) smashed Q1 ’21 earnings estimates delivering adjusted EPS of $1.96 vs. $1.08 and posting revenues of $2.15 billion, representing an 82% increase year-over-year.

Comparable-store sales increased by 80.3% in the quarter. Total sales increased by 83.1%, to $2,153 million compared with sales of $1,176 million in the same period last year as cities and stores across the U.S. and the world continue to open up following COVID-19 closures and lockdowns.

“Last quarter, I talked about entering our fiscal 2021 with momentum, and that was certainly the case in our first quarter. The momentum gained strength as the quarter progressed, enabling us to deliver exceptional top-line and bottom-line results, even against the ongoing challenges of store closures in Europe and Canada and congestion at the U.S. ports leading to abnormally lean inventory levels," said Foot Locker Chairman and Chief Executive Officer Dick Johnson on the company's earnings call. 

Johnson also noted the strength of Foot Locker’s digital business, which is up 43% on a comp basis and landing at a penetration rate of 25% of the company’s total sales. In addition, Foot Locker saw its footwear business increase by over 70%, and its apparel and accessories business was up triple digits.

But perhaps the most compelling news from the footwear and sportswear retailer was its decision to close the majority of the remaining Footaction stores as leases expire over the next two years.

“We are currently in the process of assessing the Footaction fleet to determine the best decision for each location. Approximately one third of the top performance Footaction locations will be made into new Foot Locker stores establishing a bolder women’s and kids presence, as well as new Champ Sports and Kids Foot Locker stores. We are excited about the opportunities to expand our women’s and kids presence within our foot locker and Champs Sports stores.”

Johnson said that the decision to close out the Footaction brand was not an easy one and thanked the Footaction team for their “tireless efforts” over the years.

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

Read more:

  • Foot Locker teams up with New Balance to help bring diversity to the footwear industry

  • Crocs fever is at an all-time high after stellar first-quarter results

  • Nike says it’s paid over $9 billion in taxes since 2016

  • NFL players team up with Goalsetter to teach kids financial literacy

  • ‘There’s just so much energy around the sneaker market:’ Footlocker CEO on company’s growth

  • ArtGrails debuts NFT of Diamond Supply Co. & Nike Tiffany SB Dunks

Source: Read Full Article