Foot Locker Inc. is no stranger to a bounce-back. After the sporting goods chain was forced to cut revenue and earnings expectations for the year, the company surprised Wall Street analysts by posting better-than-expected earnings for the third quarter.
The company, which is more popular with the Millennial set, saw comparable store sales grow 0.8 percent, a figure that surpassed analysts’ estimates of a 0.3 percent growth, Bloomberg reported. This comes after a disastrous third quarter of 2017 in which Foot Locker reported a 1.7 percent drop in comparable store sales, which led the company to slash sales, earnings and outlook guidance in subsequent quarters.
But even with this latest positive development, Foot Locker’s stock price fell more than 10 percent on Wednesday after the company issued soft guidance for the fourth quarter, which brought warnings about increased promotional activity.
CEO Richard Johnson said that he anticipates an increase in competitive activity, particularly at mall-based stores. Foot Locker closed 170 stores in the past year, a move that helped it further focus on its digital operations.
“These investments will help us achieve our long-term goals in a fast-changing environment,” Johnson said.
Disclosure: The author owns some stock in Foot Locker.