Foot Locker jumps 23% after saying it expects to report a surprise profit in the 2nd quarter

Consumer shopping at House of Hoops during the Foot Locker 34th Street Grand Opening on Tuesday, Aug. 30, 2016 in New York. AP/Bennett Raglin

Shares of Foot Locker surged as much as 23% in premarket trading Monday after the company said it expects to report a surprise profit in the second quarter.

Foot Locker announced on Monday that in the second quarter ending August 1, comparable store sales jumped around 18%. In addition, diluted earnings for the quarter are expected to be between 38 cents and 42 cents per share, compared with 55 cents per share last year.

The company is scheduled to report its second-quarter earnings on Friday, August 21, before market open.

“As we continued to reopen stores throughout the quarter, we saw a strong customer response to our assortments, which we believe was aided by pent-up demand and the effect of fiscal stimulus,” said Richard Johnson, CEO of Foot Locker, in a press release. “This fuelled our in-store sales and also drove continued momentum across our digital channels.”

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The earnings include pre-tax charges of about $US19 million “related to the wind down of the Runners Point banner and the Eastbay restructuring,” the company said in a press release. It also includes about $US18 million for “costs incurred in connection with the recent social unrest.”

Foot Locker withdrew its full-year fiscal guidance in March amid the coronavirus pandemic and the start of sweeping shelter-in-place orders that shuttered stores across the US. The company didn’t give any further update on its full-year outlook given the continued uncertainty around the back-to-school season, sports, and additional stimulus packages.

Foot Locker has shed 30% year-to-date through Friday’s close.

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