Here’s why Foot Locker shares are up 10% on Friday morning

Foot Locker Inc. (NYSE: FL) reported its financial results for the second quarter on Friday that beat Wall Street estimates by a significant margin. Shares of the company were about 10% up in premarket trading.

Second-quarter financial performance

Foot Locker said its net income in the second quarter printed at $430 million that translates to $4.09 per share. In the comparable quarter of last year, its net income was capped at a sharply lower $45 million or 43 cents per share.

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On an adjusted basis, the shoe company earned $2.21 per share in the recent quarter. It generated $2.275 billion in sales versus the year-ago figure of $2.077 billion. According to FactSet, experts had forecast $2.098 billion in sales and $1.01 of adjusted EPS.

In related news, peer Buckle Inc also reported its financial results for the second quarter on Friday.

CFO Page is ‘cautiously optimistic’ for H2

Foot Locker said its comparable sales in Q2 jumped 6.9% compared to only 0.2% expected. CFO Andrew Page refrained from giving future guidance but said he was “cautiously optimistic” about the back half of the current financial year.

“Recognising we are still operating in an uncertain environment due to COVID-19, we continue to keep a close eye on the business, including temporary store closures and supply chain challenges,” Page said in the earnings press release.

The New York-based company attributed its hawkish Q2 performance in particular to the women and kids’ footwear business. It also refrained from excessive promotions that further helped boost profits.  

The earnings report comes only weeks after Foot Locker said it will buy WSS and Atmos for roughly $1.1 billion in cash. The $6.12 billion company has a price to earnings ratio of 9.80.