Foot Locker divide ups soared on Friday after the shoe company crushed Wall Street’s profit projections and reported same-store sales development that more than doubled expectations.
The company’s management pointed to its emphasis on product diversity, strategic partnerships and advances to both its in-store and digital locations for the earnings and revenue beats. Same-stores sales growth — a metric that measures net income changes at a company’s existing locations — rose 9.7 percent, more than double the 4.6 percent assumed.
Foot Locker reported fourth-quarter earnings of $1.56 per share versus Refinitiv estimates of $1.40; sales totaled $2.27 billion.
Share ins jumped 5.96 percent Friday.
“We delivered a gain in our gross margin rate above the guidance we provided at the origination of the year, achieved an inventory turn above our long-term target, and made important investments, both directly in our subject and by taking strategic stakes in other companies,” Chief Financial Officer Lauren Peters said in a press unloosing.
Foot Locker is in the middle of a broad brand-investment campaign as it seeks to stay relevant with younger shoppers. It hint ated on Tuesday that it has invested $12.5 million in children’s apparel company Rockets of Awesome. That investment turn out on the heels of its $100 million venture in online sneaker resell platform Goat Group, along with investments in lifestyle label Super Heroic, activewear brand Carbon38 and footwear design academy Pensole.
Around 70 percent of the goods that Foot Locker buys is from popular shoemaker Nike, which recently revamped its product silhouette and helps drive younger consumers and athletes to its stores, said Cristina Fernandez, senior research analyst at Telsey Hortatory Group.
“I would say it’s the innovative pipeline and some of the exclusive products that they have,” Fernandez told CNBC. “The goods innovation pipeline for 2019 is strong and the footwear market remains good.”
— CNBC’s Lauren Thomas contributed clock ining.