Shares in Foot Locker (NYSE:FL) soared in premarket trading after the company reported strong organic sales growth around the turn of the year and forecast that earnings per share will rise by over 10% in its current fiscal year.
The numbers suggest that the company is coming to terms with the challenge of online competition and changing distribution preferences at key suppliers such as Nike (NYSE:NKE) and Adidas (DE:ADSGN).
The shares were indicated up 14.2% at $67.95 by 07:20 AM ET (1220 GMT) in response.
Comparable-store sales increased 9.7% in the three months ending Feb. 2, a much stronger-than-expected performance that meant revenue hit $2.27 billion, well ahead of analysts’ forecasts for $2.18 billion. Even after allowing for currency fluctuations, fourth-quarter sales were up 4.2%.
Earnings per share, however, fell 1 cent short of forecasts for the quarter at $1.39.
Inventories, a key measure of how well the chain is keeping up with changes in demand patterns, fell 0.7% on the year, although they were up 1.3% in constant currency terms.
“The fundamentals of our core business remain strong and led to meaningful improvement in our financial results, not only during the fourth quarter but throughout 2018,” said chairman and chief executive officer Richard Johnson.
Johnson said that he expects “a mid-single digit comparable sales gain and another double-digit percentage increase in earnings per share” for the fiscal year just started.