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Foot Locker plays hard in Q3

Athletic footwear giant Foot Locker turning in a winning third quarter, with sales and earnings that topped Wall Street expectations.

Net income for the quarter ended November 3, 2018 was $130 million, or $1.14 per share, compared to net income of $102 million, or 81 cents per share in the year-ago period. Excluding items, earnings came in at 95 cents per share, topping analysts’ expectations of 92 cents per share.

Total third quarter sales decreased 0.5% to $1.86 billion this year, topping estimates. (The 53rd week shift impact reduced sales by approximately $60 million during the third quarter.) Same-store sales increased 2.9%, better than expected.

In response to sluggish sales, Foot Locker has been investing to improve its digital and in-store experience, along with collaborations with vendors. Its third quarter results suggest the efforts are beginning to pay off.

“Our accelerating comparable sales and improving bottom line reflect the strategic partnerships with our vendors, as well as our efforts to inspire and empower youth culture and create deeper connections with local communities," said Richard Johnson, chairman and CEO, Foot Locker. "We believe we are well positioned to produce even stronger results in the all-important holiday selling season and the fourth quarter overall."

Canaccord Genuity consumer analyst Camilo Lyon noted that in addition to Foot Locker's improving product mix, the chain is collaborating extensively with such key vendor partners as Nike to offer a unique and differentiated experience to its customers.

"Also, the initial success of new stores in Asia and power stores (experiential, community focused) highlight incremental long term revenue drivers," Lyon added.

As of November 3, the company operated 3,266 stores in 26 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 108 franchised Foot Locker stores were operating in the Middle East, as well as 10 franchised Runners Point stores in Germany.
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