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Foot Locker to close Footaction stores after colossal Q1 earnings

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Footwear and sportswear retailer Foot Locker (FL) smashed Q1 ’21 earnings estimates delivering adjusted EPS of $1.96 vs. $1.08 and posting revenues of $2.15 billion, representing an 82% increase year-over-year.

Comparable-store sales increased by 80.3% in the quarter. Total sales increased by 83.1%, to $2,153 million compared with sales of $1,176 million in the same period last year as cities and stores across the U.S. and the world continue to open up following COVID-19 closures and lockdowns.

“Last quarter, I talked about entering our fiscal 2021 with momentum, and that was certainly the case in our first quarter. The momentum gained strength as the quarter progressed, enabling us to deliver exceptional top-line and bottom-line results, even against the ongoing challenges of store closures in Europe and Canada and congestion at the U.S. ports leading to abnormally lean inventory levels," said Foot Locker Chairman and Chief Executive Officer Dick Johnson on the company's earnings call.

People queue during Black Friday sales in front of a Foot Locker shoe store, as the spread of the coronavirus disease (COVID-19) continues, in Zurich, Switzerland November 27, 2020.  REUTERS/Arnd Wiegmann
People queue during Black Friday sales in front of a Foot Locker shoe store, as the spread of the coronavirus disease (COVID-19) continues, in Zurich, Switzerland November 27, 2020. REUTERS/Arnd Wiegmann

Johnson also noted the strength of Foot Locker’s digital business, which is up 43% on a comp basis and landing at a penetration rate of 25% of the company’s total sales. In addition, Foot Locker saw its footwear business increase by over 70%, and its apparel and accessories business was up triple digits.

But perhaps the most compelling news from the footwear and sportswear retailer was its decision to close the majority of the remaining Footaction stores as leases expire over the next two years.

“We are currently in the process of assessing the Footaction fleet to determine the best decision for each location. Approximately one third of the top performance Footaction locations will be made into new Foot Locker stores establishing a bolder women’s and kids presence, as well as new Champ Sports and Kids Foot Locker stores. We are excited about the opportunities to expand our women’s and kids presence within our foot locker and Champs Sports stores.”

Johnson said that the decision to close out the Footaction brand was not an easy one and thanked the Footaction team for their “tireless efforts” over the years.

The Foot Locker store in Broomfield, Colorado is seen November 17, 2016.  REUTERS/Rick Wilking
The Foot Locker store in Broomfield, Colorado is seen November 17, 2016. REUTERS/Rick Wilking

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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