Millennials and the 'sneaker culture' boost Foot Locker

Millennials and other young Americans may not be spending much time watching the Olympics on NBC, but it appears they’re spending plenty of money on sneakers. And that’s translating into gold for companies like Foot Locker, Nike and Under Armour.

Foot Locker delivered a profit of $127 million, or $0.94 cents a share for its second quarter. That topped analysts’ estimates of $0.90 a share. Revenue came in above forecasts as well, increasing 5% to $1.78 billion.

The company also posted stronger than expected same store sales growth, with sales at existing stores jumping 4.7%, driven by demand for basketball, running and other classic footwear as well as apparel during the quarter.

“Most of the basketball shoes that we sell never see a basketball court,” Foot Locker’s Chief Executive Officer Richard Johnson said during a conference call, adding that most running shoes his company sells will never see the track, either. “They just look really good, and they’re part of the sneaker culture that we really support.”

Analysts at Deutsche Bank recently wrote that athletic footwear is one of the few growth areas in retail, driven partly by “millennials who continue to view sneakers in high regard.”

Foot Locker (FL) shares soared on the strong quarterly results and other other athletic apparel makers like Nike (NKE), Under Armour (UA) and Skechers (SKX) also moved higher on the news, even though the overall stock market was on track for a weekly loss.

Foot Locker opened 23 new stores last quarter, closed 18 and remodeled or moved 64 stores, ending the quarter with 3,401 total stores in 23 countries.

Earlier this week, Dicks Sporting Goods (DKS) raised its outlook for the year after delivering a beat on both its top and bottom lines for the second quarter thanks to better than expected same-store sales growth.