Foot Locker Inc. topped Wall Street’s estimates for the holiday quarter on Thursday as it sold more sneakers and sportswear at deep discounts, signaling that shoppers are still willing to spend on must-have fashion items despite rising inflation and economic uncertainty.
The athletic footwear and apparel chain said sales rose 8% to $2.3 billion in the three months ended Jan. 28, helped by strong demand for products from Nike Inc (NKE.N), Adidas AG (ADSGn.DE) and Puma SE (PUMG.DE).
Comparable sales, excluding sales from stores closed for renovations, increased 6.6%.
Analysts on average had estimated sales of $2.2 billion and a 4.8% rise in comparable sales, according to Refinitiv data.
In a bid to clear excess inventory, the company significantly discounted products during the holiday shopping season, which resulted in a 0.2% decline in average selling prices.
‘Our aggressive promotional strategy resonated with consumers, leading to record holiday sales, a higher penetration of new customers and clearing of excess inventory,’ CEO Richard Johnson said.
The company also benefited from the popularity of products tied to professional basketball player LeBron James, who along with Nike, has a long-term partnership with the retailer.
Foot Locker expects the promotional environment to remain competitive in the near term, but it sees a gradual improvement in margins as the year progresses.
For the full year, the company cut its sales forecast to a range of $9.1 billion to $9.2 billion from $9.2 billion to $9.4 billion previously. It still expects earnings per share in the range of $6.15 to $6.25, which was above analysts’ average estimate of $6.13.
Foot Locker shares were up 5.6% at $45.68 in morning trade.
The company operates more than 2,800 stores in 27 countries, including Finish Line, Champs, Footaction, Lady Foot Locker, SIX:02 and Runners Point..
