source: Sneaker Freaker
In light of the coronavirus and social unrest that has affected some of its stores, Foot Locker's (NYSE:FL) last quarter was surprisingly strong, resulting in the company reinstating it dividend, albeit at a modest $0.15.
In this article we'll look at some of the variables that will determine if the company will be able to continue moving in an upward trajectory, or if the last quarter was an anomaly that will be difficult to improve upon in the near term.
Latest earnings
In its latest earnings report Foot Locker reported sales of of $2.08 beating, up 17.5 percent, and beating expectations by about $8 million. Earnings per share in the reporting period finished at $0.71, up significantly from the $0.57 analysts were looking for.
Last year in the same quarter the company generated revenue of $1.77 billion, and EPS of $0.66. GAAP EPS came in at $0.43, missing by $0.17. Minus some charges, GAAP EPS would had been $0.55, which would have beat estimates.
Gross margin dropped 420 bps to 25.9 percent, missing expectations of 26.1 percent. Same-store sales for locations opened at least a year were up by 19 percent.
At the end of the quarter the company had inventory valued at $1.19 billion, down 2.7 percent from the same quarter last year.
The company had cash on hand of $1.37 billion at the end of the reporting period, with $121 million in long-term debt. That strong cash position is what triggered the board to reinstate the dividend. Last year in the same quarter Foot Locker had cash and cash equivalents of $939 million.
While generating good quarterly results, the company didn't provide forward guidance primarily because of ongoing uncertainties associated with COVID-19 and social unrest.
Some concerns
One of the major concerns going forward is
