Foot Locker shares are rising and first-quarter earnings are beating expectations

Key takeaways

Foot Locker shares soared Thursday as first-quarter results showed the company’s turnaround efforts were working.
The athletic footwear and apparel retailer beat earnings estimates and comparable store sales were better than expected.
CEO Mary Dillon stated that Foot Locker controlled costs and benefited from favorable changes in the spending schedule.

Shares of Foot Locker ( FL ) soared Thursday as the athletic footwear and apparel retailer’s first-quarter results showed turnaround efforts appear to be paying off.

Foot Locker reported quarterly adjusted earnings per share (EPS) of $0.22, almost double the analyst consensus from Visible Alpha. Revenue fell 2.8% to $1.88 billion, broadly in line with forecasts.

Comparable store sales fell 1.8%, driven by what the company called “the continued repositioning of the Champs Sports banner.” Foot Locker and Kids Foot Locker comparable store sales increased 1.1%.

Sales at Foot Locker rose 2% to $759 million. They gained 9.6% to $183 million in Kids Foot Locker and 6.7% to $160 million in WSS. Sales at Champs Sports fell 18.6% to $267 million.

Foot Locker’s CEO says the “lace-up plan” is working

Chief Executive Officer (CEO) Mary Dillon explained that the results showed that the company’s “Lace Up Plan” to reorganize the business was working. She attributed the high profit to “disciplined expense management and some favorable changes in the spending schedule.” She also expressed optimism about the current quarter, saying Foot Locker “is well positioned with fresh inventory for the upcoming summer and back-to-school seasons.”

The company maintained its full-year adjusted EPS outlook of $1.50 to $1.70, with comparable store sales up 1.0% to 3.0%.

Foot Locker shares are up more than 26% to $28.46 as of 10:30 a.m. ET on Thursday, but remain nearly 10% lower year to date.