Shares of Foot Locker, Inc. FL jumped as much as 15% Friday after the hypebeast shoe and athletic retailer posted third-quarter results demonstrating strong consumer demand despite inflation pressure.
There were no consequences to the company’s bottom line after cutting ties with Ye, formerly known as Kanye West, for his antisemitic comments.
What Happened: Comparable sales increased 0.8%, significantly exceeding forecast expectations of a 5.9% fall. Despite a 0.7% decline to $2.17 billion in revenue, it exceeded consensus estimates.
Merchandise inventories jumped 29.5% to $1.69 billion, with CFO Andrew Page noting the company raised its fourth-quarter and full-year outlook based on the inventory position in high-quality products and solid momentum for the holiday season. This could be interpreted as another jab at Ye’s Yeezy line, which Foot Locker no longer carries.
Read More: No Kanye, No Problem: Adidas Plans To Sell Yeezy Shoes Under Its Own Name
“While we remain a partner with Adidas and carry a wide assortment of their collections — we will not be supporting any future Yeezy product drops, and we have instructed our retail operators to pull any existing product from our shelves and digital sites,” Foot Locker said in a statement in the wake of Ye’s antisemitic comments.
Why It Matters: The company raised its full-year EPS outlook to $4.42-$4.50 from $4.25-$4.45. Total sales are expected to decline 4% to 5%, versus its prior target of a 6%-7% drop. Comps should fall 4%-5% versus its old goal of an 8%-9% slide.
Foot Locker’s upbeat results could foreshadow strong earnings for other shoe and athletic apparel retailers. Foot Locker is a top Nike partner, yet to set a reporting date.
FL Price Action: Foot Locker shares are up 7.47% to $35.54 intraday Friday. The stock was is down 20.78% this year through Friday, deeper than the 17.83% decline of the S&P 500 Index, according to data from Benzinga Pro.
Read Next: Adidas Channels Homer Simpson, Goes Back Into Hedges After Ending Kanye West Deal
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