Foot Locker, the American athletic apparel retailer, has shocked some of the industry experts after it announced yesterday (10 August) that it expects to make surprise profit in the second quarter.
And it has it reasons to make this statement, as the retailer saw its comparable sales grow by 18 per cent in the quarter that ended 1 August.
Several analysts had predicted huge losses for Foot Locker in the quarter owing to pandemic havoc, with FactSet survey even predicting a fall of 9.1 per cent.
However, the jump in comparable sales has taken everyone by surprise. The retailer has attributed the exceptional performance to pent-up demand as well as the impact of fiscal stimulus.
The diluted earnings in Q2 are expected to be between 38 cents and 42 cents per share. Notably, analysts had predicted an adjusted loss of 61 cents per share.
Ever since Foot Locker announced of having a profitable second quarter, the shares of the company rose by an impressive 23 per cent in premarket trading Monday (10 August).
The retailer said that the Q2 results also include a cost of US $ 18 million in connection with the recent social unrest. No further details were provided on this by the retailer.
Foot Locker will come out with its full Q2 results before markets open on 21 August.
The New York-based sportswear retailer has its presence in 28 countries and generates revenue of US $ 7.94 billion.