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Foot Locker shares surge as Q1 earnings point to a step in the right direction

Investors are rewarding Foot Locker (FL) for taking a step in the right direction.

On Thursday morning, shares jumped nearly 20% as CEO Mary Dillon called Q1 "a solid start to the year." The company's "Lace Up Plan," which includes efforts to improve its digital business, store experience, loyalty, and brand building, seems to be showing early signs of promise.

Same-store sales dropped 1.8%, better than the 1.93% decline Wall Street expected. Revenue came in at $1.88 billion, compared to the $1.89 billion expected, while adjusted earnings per share of $0.22 beat the $0.12 estimated.

The company reaffirmed its 2024 guidance, with same-store sales expected to grow between 1% and 3%, while overall sales are expected to range between a 1% decline and a 1% gain. It expects full-year EPS to come in between $1.50 and $1.70.


This comes as consumers' discretionary income is pinched by prolonged inflation, reduced savings, and higher interest rates.

Prior to the report, Foot Locker shares dropped nearly 27% year to date, compared to the S&P 500's (^GSPC) roughly 11% gain.

As part of the plan, Foot Locker unveiled a new store remodel (pictured below), which the company says is translating to higher foot traffic and basket sizes.

The company opened four new stores in the quarter and closed 37. It remodeled or relocated 16 stores and updated 13 to the current design standards.

Foot Locker plans to refresh two-thirds of its global Foot Locker and Kids Foot Locker locations over the next few years.

It's also been investing in digital sales, including its loyalty program FLX Rewards, which has been in testing in Canada and is expected to formally launch in Q2. It's showing early signs of "higher activations and average transaction metrics in test," per Evercore ISI analyst Michael Binetti.

He expects it will allow the company to gain more consumer insights. Just 20% of Foot Locker's transactions happen through its loyalty program, compared to 60%-80% for the retail industry.

Dillon said the launch "will further strengthen" its "demand flywheel" as it looks to become a modern, omnichannel retailer.

Reinvigorating brand partner relationships is also key. The company said it is "working very closely on multiyear growth plans" with Nike, which makes up 60% of its portfolio, as the shoe brand refocuses on wholesale.

Dillon said the team is "very encouraged by the pipeline of innovation that was shared beginning with the Paris Olympics and into the back half of 2024 and then 2025."

Foot Locker debuts new store concept at its Foot Locker Willowbrook Mall location in Wayne, NJ and plans to use learnings from this concept into new stores. (Courtesy: Foot Locker)
Foot Locker debuts new store concept at its Willowbrook Mall location in Wayne, N.J., and plans to incorporate learnings from this concept in new stores. (Foot Locker)

Here's what Foot Locker reported for Q1, compared to Wall Street estimates, per Bloomberg consensus data:

Adjusted earnings per share: $0.22 versus $0.12

Revenue: $1.88 billion versus $1.89 billion

Same-store sales growth: -1.8% versus -1.93%

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

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