Why Is Foot Locker (FL) Up 2.4% Since Last Earnings Report?

Earnings Performance - Foot Locker's Q3 2024 earnings missed expectations with adjusted EPS of 33 cents, below the Zacks Consensus Estimate of 39 cents, though it increased from 30 cents in the prior-year quarter [5] - Total revenues decreased by 1.4% year-over-year to $1,961 million, missing the Zacks Consensus Estimate of$2,001 million [6] - Comparable sales increased by 2.4% year-over-year, driven by a 2.8% increase in global Foot Locker and Kids Foot Locker sales [6] Margins and Expenses - Gross margin rate increased by 230 basis points (bps) due to lower markdown levels [7] - SG&A expenses as a percentage of sales increased by 210 bps, driven by investments in technology and brand-building, partially offset by cost-optimization savings [7] Store Operations and Expansion - In Q3, the company opened 10 new stores, closed 24 stores, remodeled or relocated 20 stores, and modernized 167 stores to align with updated design standards [8] - As of November 2, 2024, Foot Locker operated 2,450 stores across 26 countries, with 214 franchised stores in the Middle East and Asia [9] Financial Position - The company ended Q3 with $211 million in cash and cash equivalents, long-term debt and finance lease obligations of$440 million, and shareholders' equity of $2.87 billion [10] - Merchandise inventories decreased by 6.3$1.74 billion [11] Guidance and Outlook - Q4 2024 guidance projects a revenue decline of 3.5% to 1.5%, with comparable sales growth of 1.5% to 3.5% [12] - Full-year 2024 revenue is expected to decline by 1.5% to 1%, with comparable sales growth narrowed to 1-1.5% [13] - Gross margin guidance for 2024 was lowered to 28.7-28.8% due to a more promotional environment [14] - Adjusted EPS guidance for 2024 was revised downward to $1.20-$1.30 from $1.50-$1.70 [15] Industry Comparison - Urban Outfitters, another player in the Retail - Apparel and Shoes industry, reported Q3 2024 revenues of $1.36 billion, a 6.3$1.10 compared to $0.88 a year ago [19] - Urban Outfitters is expected to post Q4 earnings of$0.87 per share, a 26.1% increase from the year-ago quarter, with a Zacks Rank 1 (Strong Buy) [20] Market Performance and Estimates - Foot Locker's shares gained 2.4% over the past month, outperforming the S&P 500 [1] - Consensus estimates for Foot Locker have trended downward, with a -23.26% revision over the past month [16] - The stock has a Zacks Rank 3 (Hold) and an aggregate VGM Score of B, with a strong Growth Score of A but a weak Momentum Score of F [17][18]