- Foot Locker stock has advanced more than 14% in Friday's premarket.
- FL shares were stuck between $30 and $34 for a month and a half.
- Foot Locker beat analyst expectations on the top and bottom lines and guided higher.
Foot Locker (FL) stock sailed 14.1% higher to $37.65 in Friday's premarket after the shoe outlet posted third-quarter earnings and guidance that outdid most bullish analysts. Foot Locker posted $1.27 in adjusted earnings per share (EPS) on revenue of $2.17 billion. This was well ahead of Wall Street consensus for the quarter – $1.11 in adjusted EPS on sales of $2.09 billion.
Foot Locker earnings news
Alongside the sizable beat on both top and bottom lines, Foot Locker management said same-store sales rose 0.8%, while analysts had expected a 6% decline. This surprise has been a major part of the Friday morning surge in the share price.
In fact, analysts had expected full-year same-store sales in fiscal 2022 to fall between 8% and 9%. Instead, management said same-store sales will drop just 4% to 5%. Net revenue is also unlikely to fare as badly as both analysts and management had feared earlier in the year. Management also raised full-year EPS guidance from a midpoint of $4.35 to a midpoint of $4.46.
Results for the quarter were down from a year ago when the footwear chain produced adjusted EPS of $1.93 on revenue of $2.19 billion.
Foot Locker just opened a $40 million distribution center in Reno, Nevada that it said would help it store and move as much as 20 million product units at a time. The 465,000-square-foot warehouse will enable Foot Locker to source products for as many as 300 stores.
Foot Locker stock forecast
Foot Locker stock has broken out of the $30 to $34 consolidation zone that has been the norm since late September. Now bulls will focus on breaking through resistance at $40, which stood tall as fierce resistance from late August to late September. Beyond here sits further resistance between $45 and $46 from all the way back in January. One piece of evidence that this rally may have legs is that the Moving Average Convergence Divergence (MACD) indicator has crossed over in a bullish stance and is currently approaching the zero threshold. Moving above the zero threshold is typically a signal that a rally has momentum.
FL stock 1-day chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.