Foot Locker Q3 Earnings: What To Expect

The American footwear and sportswear retailer Foot Locker reports its earnings for Q3 tomorrow. Here’s what to expect.

Nov. 19, 2020

Foot Locker (NYSE: FL) has had a steady year considering the huge impact COVID-19 has had on its physical retail stores. Despite hitting a nine-year low in March as retail stocks around the world closed due to pandemic restrictions, Foot Locker stock has bounced back some 120% since. This week, analysts raised Foot Locker’s price target to $44 from $37 and kept an ‘Outperform’ rating on the shares ahead of its Q3 quarterly results.

Analysts believe that Foot Locker is well-positioned in the athletic footwear and apparel industries. The company is expected to benefit greatly from its new e-commerce investments, loyalty program for customers, market share opportunity for females, and productivity initiatives such as its radio frequency identification systems which help track inventory. Tomorrow’s earnings report will prove if these initiatives were successful for the company. 

Foot Locker reports its earnings for Q3 2020 on Friday, November 20th before the opening bell at 9:30 a.m Eastern Time. 

To listen to the call and to access the transcript, as well as the shareholder’s letter and the financial statements for the quarter, just visit Foot Locker’s Investor Relations Page. 

What to Expect

The consensus estimates on Wall Street expect Foot Locker to see quarterly earnings per share of $0.60 on revenue of $1.9 billion, indicating a 1% drop from last year’s third-quarter figures.  This estimate suggests a decline of 46.9% from earnings of $1.13 reported in the year-ago quarter. In Q2, the company earnings came in at $0.71 per share, beating analyst estimates.

Foot Locker is still overcoming many challenges in 2020. Its retail sales are still suffering from COVID-19 restrictions as many shoppers are in fear of contracting the virus by visiting its physical stores. A huge reduction in sporting events this year has also resulted in less apparel and footwear being purchased. 

On a positive note, Foot Locker has been receiving stellar reviews on its assortment of goods from customers as stores began to reopen. In addition, Foot Locker’s e-commerce digital website has remained sturdy during the pandemic, shoppers were enticed by online promotions and offerings. These factors will likely have a positive impact on the company’s earnings performance tomorrow. 

In its second-quarter earnings call, Foot Locker stated that it was worried about confronting pandemic-related challenges and coronavirus’s potential impact on its back-to-school collection sales. Ultimately, online product offerings and shipping expenses will likely have a negative impact on the footwear company’s profit margins this quarter. 

Topics you can expect to hear on the earnings call tomorrow include Foot Locker’s upcoming plans for the Christmas period, future plans of measures they are taking for physical stores to remain open, and further growth opportunities for its e-commerce businesses. 

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