Foot Locker (FL) stock is up in 2016. But the stock was down in sympathy after Shoe Carnival (SCVL) missed earnings estimates earlier this week, taking the whole group with it.
Shoe Carnival missed on earnings, revenue and same-store sales, and it cut guidance. The stock fell 12% following the disappointment. The announcement caused investors to dump the entire footwear group: Deckers Outdoor (DECK) , Sketchers (SKX) , Crocs (CROX) , Wolverine World Wide (WWW) , DSW (DSW) and Foot Locker were all punished.
But I think Foot Locker was unfairly dinged.
Shoe Carnival said its quarterly results were below expectations because seasonal merchandise sold poorly. The company also said it had slow sales in women's boots. Neither of those categories affects Foot Locker.
In fact, Shoe Carnival said it saw a high-single-digit comparable same-store sale increase in athletic categories in November.
On Nov. 18, Foot Locker reported third-quarter fiscal 2017 earnings of $1.13 per share, 3 cents better than the consensus estimate. Revenue rose 5.1% to $1.89 billion. Comparable-store sales increased 4.7%. Gross margin ended the quarter at 33.9%.
Same-store sales should stay strong. The company ended the quarter with strong momentum in Adidas brand footwear. Running and casual footwear increased in the high-single-digit range. Basketball footwear declined at a low-single-digit rate. Apparel increased by the mid-single digits.
