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Can Foot Locker (FL) sustain share gains after Q2 beats?
Sportswear company Foot Locker (FL) crushes earnings and sales expectations in Q2 after benefiting from the reopening of stores and strong demand for products.
Foot Locker (FL) shares skyrocketed on Monday after the sportswear company smashed the analyst consensus for earnings and sales in Q2.
The New York-headquartered retailer posted its latest financial report before the first bell of the new week and it did not disappoint investors who were expecting more conservative returns.
Foot Locker said that earnings per share for the period ending 30th June were $0.66-$0.70, which was a full dollar and more above the pre-report estimates of a $0.60 loss.
Wall Street had expected the coronavirus to weigh on sales, but the reopening of stores in the early summer released pent-up demand for clothing and shoe products.
Foot Locker, which has 75 stores in the UK, reported an 18% uptick in sales in Q2 – again, well ahead of the 23.6% decline pegged by analysts polled by FactSet.
Foot Locker’s CEO Richard Johnson said that its digital channels had performed admirably during the latest quarter.
He added: “As we continued to reopen stores throughout the quarter, we saw a strong customer response to our assortments, which we believe was aided by pent-up demand and the effect of fiscal stimulus.”
Foot Locker had closed at $27.49 on the New York Stock Exchange on Friday after a stable week, but there was a massive jump (+23%) in pre-market trading on Monday.
It was a timely rise for the company after a slump of 30% into the red for the year-to-date through last Friday.
During trading hours on the NYSE, shares remained on an upward curve with gains of 6.62% just before midday (EST).
Foot Locker has a consensus rating of ‘hold’, with nine ‘buy’ ratings, 10 ‘hold’ ratings and two ‘sell’ ratings.
The consensus price target is $33.58.
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