Foot Locker shares surge on record sales in 2018, Q4 comps lift 10%
U.S. sneaker company Foot Locker on Friday reported fourth quarter results that blew away estimates, announcing comparable sales recorded close to 10% growth during the holiday season, sending shares up 14 percent to $68 in New York trading.
For the three months ending February 2, 2019, net income grew to $158 million, or $1.39 per share, compared to a net loss of $49 million, or $0.40 per share, for the for the same quarter last year.
On a non-GAAP basis, the New York based-company earned $1.56 cents per share, a 37 percent increase over the comparable 13-week non-GAAP earnings per share of $1.14 in 2017.
Comparable sales increased 9.7 percent, more than twice what analysts predicted, while total sales increased 2.8 percent, to $2.27 billion this year.
Excluding the effect of foreign exchange rate fluctuations, total sales for the fourth quarter increased 4.2 percent.
On Friday's news, Foot Locker shares rose as much as 14 percent to $68 in New York trading, their highest level since May 2017.
In a statement released on Friday, Foot Locker CEO, Richard Johnson, said the company's core business remained strong throughout the year 2018, with improved performance continuing into the last quarter.
"This positive performance was made possible by our team's unrelenting focus on providing compelling assortments to our customers, launching exciting collaborations with our strategic partners, both long-standing and new, and making our stores and digital channels unique and exciting destinations," said Johnson.
Foot Locker's sales for 2018 were $7.94 billion, an increase of 2 percent -- the highest in the company's history as an athletic business.
Full-year comparable sales increased 2.7 percent, and increased 1.7 percent, excluding the effect of foreign currency fluctuations.
In 2018, net income increased to $541 million in 2018, or $4.66 per share, compared to $284 million, or $2.22 per share in 2017.
Looking ahead to 2019, Johnson said his company plans to maintains its focus on "bringing differentiated experiences to youth culture," which the CEO expects will "a mid-single digit comparable sales gain and another double-digit percentage increase in earnings per share."
Foot Locker announced in late February that the company is planning multiple capital allocation initiatives, including a $1.2 billion common share repurchase program and a $275 million capital expenditures program.
The spending involves increased investments in Foot Locker's store fleet in all existing regions, including Asia, and in its digital initiatives.
The company said it also plans to devote funds to building up its supply chain and other infrastructure capabilities.
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