Foot Locker stock rises following Q4 earnings, weaker-than-expected guidance

Yahoo Finance Live anchors Julie Hyman and Brad Smith discuss the rise in stock for Foot Locker following fourth-quarter earnings, and the American sportswear and footwear retailer’s plans to expand its sneaker line.

Video transcript

JULIE HYMAN: Let's move on to some other movers. Shares of Foot Locker rising this morning, up about 7% after reporting strong fourth quarter results, but weaker-than-expected guidance. And the company is also unveiling its plan to expand its sneaker line and relaunch its core brand. This is at its investor day that it is holding at the same time that it is coming out with some of these numbers here.

So on the-- you know, sort of a mixed picture, financially. Like, comparable sales for the year, it says, are gonna fall 3 and 1/2% to 5 and 1/2%. That's not great, even after those fourth-quarter results beat estimates. But I know you're digging into the company's new plan.

BRAD SMITH: Yeah. Yeah, this Lace Up plan that they're calling it. And yeah, that's great until we all have self-lacing shoes, I guess. I guess it still applies. But at the end of the day, a few things to jump out at me from this new strategic business initiative, as they call it, the Lace Up plan.

They're gonna be looking to-- and I'm glad we got this on screen for our viewers, as well here. Awesome job by our team-- expanding sneaker culture. One of them, they're looking to serve more sneaker occasions, provide more choice. And they want to push more distinction, as well. So we'll get a little bit more clarity on what that greater distinction may look like.

Also, the portfolio and powering up the portfolio, you're seeing there. They're going to try and relaunch the Foot Locker brand within this pillar of the plan. They're going to transform the company's real estate footprint, open some new formats, too. And this is particularly interesting to me because what if you did see a more condensed type of Foot Locker footprint out there? Because this could mean shifting off mall, as they've talked about.

They're gonna also close some underperforming stores. That should be music to some investors ears out there, as well, especially getting rid of some of the unprofitable locations within their portfolio, as well. And then the relationship with the customers, as well, just to bring this all omnichannel. And the relationship with customers that they're seeing there on the screen.

The loyalty program. Loyalty programs have done, especially well for companies like Nike, a company that is looking to go and has gone more direct-to-consumer. That impacts the company like Foot Locker.

And I think if Foot Locker can layer on that loyalty program or at least ramp it up even more-- I know I'm within that program. They got my email address so I guess I'm a loyalty program member-- that's gonna be part of it as well. And really just give them more of the optionality around the sneakers or footwear that they're there buying. But then also just upsell even more so. Getting kind of a taste profile of each of customers, too.

JULIE HYMAN: Well, and given, as you mentioned, that Nike has been doing more direct selling, its relationship with Foot Locker does not seem as ironclad as it once was. And so I wonder if that's something they're gonna be addressing more directly at that investor day. That sort of elephant in the room of the Nike relationship should be interesting.

BRAD SMITH: Yeah, absolutely.