Consumers are finding it hard to ditch their comfy clothes worn for most of the pandemic despite becoming more mobile post COVID-19 vaccinations.
And that continues to play right into the bottom line of Foot Locker (FL).
“We have talked about this cozy, comfortable work-from-home/school sort of look. But the truth is that we have got the uniform of the consumer,” Foot Locker CEO Richard Johnson told analysts on an earnings call Friday. “This T-shirt, short and fleece sort of uniform that they are wearing is even more pronounced, and I think will be more pronounced as we go into this back-to-school season.”
Foot Locker benefited from the ongoing comfy clothing trend in several ways during the second quarter, much to the surprise of Wall Street forecasters.
First, the company’s apparel business saw sales increase by a double-digit percentage. Foot Locker has made a push in recent quarters to trendier hoodies and joggers (notably by Nike) with a street vibe look, and consumers appear to be responding favorably.
“We’re doing a better job selling apparel in the stores. For the longest time, it was just sort of an add-on opportunity for our team, but now we’ve got people that are really focused on selling apparel. We’re trying to make sure that it’s a full-service opportunity for us to help people get into the right pieces,” Johnson explained.
To help fill out that all-day casual look, shoppers bought more shoes in the quarter. Foot Locker said footwear sales rose by a low-single percentage, powered by women and kids categories. The company cited strength behind casual brands such as Crocs and Uggs.
Here is how Foot Locker performed in the second quarter, compared to Wall Street analyst estimates:
Net Sales: $2.28 billion vs. $2.09 billion
Same-Store Sales: +6.9% vs. -1.4%
Gross Profit Margin: 35.1% vs. 30.4%
Adjusted Diluted EPS: $2.21 vs. $1.01
Foot Locker shares soared 10% in afternoon trading Friday. The stock is up 46% year-to-date vs. an 18% gain for the S&P 500, according to Yahoo Finance Plus data.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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