By Saabira Chaudhuri and Ben Fox Rubin
Foot Locker Inc.'s (FL) third-quarter profit jumped a
better-than-expected 61% as the athletic apparel and footwear
chain's same-store sales gave results a boost.
Observers have long touted a strong athletic footwear and
apparel cycle, which has entered its third year and typically lasts
between three to five years. The Olympics this year have helped
drive interest in new technologies and fashionable gear worn by top
international athletes.
Foot Locker has now logged 11 straight quarters of
year-over-year sales and earnings growth as new products from Nike
Inc. (NKE), Under Armour Inc. (UA) and other apparel and footwear
makers continue to power demand in the running, basketball and
lifestyle categories. New styles, colors and materials are being
used in athletic gear, which helps drive consumers to the retail
chains that sell those wares.
But concerns about how economic malaise has hurt European sales
have weighed on retailers expanding or with heavy exposure in the
region. Shoe maker Wolverine World Wide Inc. (WWW) last month said
its third-quarter earnings sank 19% as it continued to see Europe's
lagging economy weigh down results.
For the quarter ended Oct. 27, Foot Locker posted a profit of
$106 million, or 69 a share, compared with $66 million, or 43 cents
a share, a year earlier. Excluding a tax benefit, earnings were 63
cents a share in the latest period.
Revenue rose 9.3% to $1.52 billion, or 11% excluding the impact
of currency fluctuations.
Analysts polled by Thomson Reuters expected per-share earnings
of 54 cents on $1.47 billion in revenue.
Gross margin widened to 33.1% from 32.5%.
Same-store sales increased 10%, while inventory rose 3% from
last year.
Shares closed Thursday at $31.85 and were inactive premarket.
The stock is up 34% so far this year.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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