Why Foot Locker Stock Soared Today

Core Viewpoint - Foot Locker's stock surged after the company reported better-than-expected financial results for its fiscal fourth quarter of 2024, indicating a positive market reaction to its performance despite a challenging retail environment [1][2]. Financial Performance - Foot Locker's Q4 same-store sales increased by nearly 3% year over year, and the gross margin showed significant improvement [2][4]. - For fiscal 2025, the company anticipates same-store sales growth of 1% to 2.5% and expects gross margin to rise to a range of 29.3% to 29.7%, up from 29% in 2024 [4]. Market Environment - The shoe retail market is currently very promotional, with consumers seeking bargains, which typically poses challenges for retailers [3]. - Despite the promotional environment, Foot Locker managed to grow sales at existing stores without resorting to promotions that could negatively impact margins [3]. Store Strategy - Foot Locker has been closing underperforming stores, having closed 47 stores in Q4 alone, and plans to reduce its store count by approximately 4% in 2025, equating to nearly 100 additional closures [5]. - While closing stores may shrink the company's size, it is viewed as a necessary strategy to improve overall performance and profitability [6].