Foot Locker, Inc. (NYSE:FL) early Friday posted weaker than expected first quarter earnings results, as margins fell and expenses increased.
The New York City-based athletic footwear and apparel maker reported Q1 earnings per share (EPS) of $1.36, which was $0.02 worse than the Wall Street consensus estimate of $1.38. The result was also at the low end of its own guidance range of $1.36 to $1.39.
Revenues rose 0.7% from last year to $2 billion, slightly missing analysts’ view for $2.02 billion.
Foot Locker noted that Q1 comparable store sales rose 0.5% in the latest period, with March and April comps jumping to the high-single digits, indicating increasing momentum into the spring months.
Gross margins fell to 34.0% of sales in Q1 however, down a full percentage point from 35.0% last year. Meanwhile, FL’s expenses rose 30 basis points to 18.5% of sales.
The company commented via press release:
“The first quarter was one of our most profitable quarters ever, but it did fall short of our original expectations,” said Richard Johnson, Chairman of the Board and Chief Executive Officer. “The slow start we experienced in February, which we believe was largely due to the delay in income tax refunds, was unfortunately not fully offset by much stronger sales in March and April. Nonetheless, we believe our banners remain at the center of a vibrant sneaker culture. We are confident that our customers have not lost their tremendous appetite for athletic footwear and apparel and that our position in the industry is stronger than ever.”
Foot Locker, Inc. shares were mostly flat in premarket trading Friday. Year-to-date, FL has gained 0.19%, versus a 6.38% rise in the benchmark S&P 500 index during the same period.