08.10.20 - Consumers now have more money in their pockets due to government stimulus checks — and apparently many are using it at malls and online to buy new sneakers, which is great news for companies like Foot Locker. The sneaker chain previewed its second-quarter results Monday ahead of the official release, saying sales were much better than expected and added it will actually report a profit.
Foot Locker, which will release its full results later in this month, suggested that sales at stores that have been open for at least a year surged almost 20% in the quarter, in part thanks to the reopening of many locations in June following closures because of the Covid-19 outbreak in mid-March. Analysts have been expecting a drop of more than 20% for those so-called same-store sales.
Shares of Foot Locker gained more 7% on the news, and Nike shares surged up 4%, helping the Dow soar by almost 300 points. Sales were strong because of "pent-up demand and the effect of fiscal stimulus," Foot Locker Chairman and CEO Richard Johnson said in a press release Monday.
"While these undoubtedly remain challenging times, we are nonetheless pleased by the health of our category," Johnson stated, assuring that sales were strong for both brick and mortar stores and online.