Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Foot Locker (NYSE:FL) and the best and worst performers in the footwear retailer industry.
Footwear sales–like their apparel counterparts–are driven by seasons, trends, and innovation more so than absolute need and similarly face the bigger-picture secular trend of e-commerce penetration. Footwear plays a part in societal belonging, personal expression, and occasion, and retailers selling shoes recognize this. Therefore, they aim to balance selection, competitive prices, and the latest trends to attract consumers. Unlike their apparel counterparts, footwear retailers most sell popular third-party brands (as opposed to their own exclusive brands), which could mean less exclusivity of product but more nimbleness to pivot to what’s hot.
The 4 footwear retailer stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 0.8%. while next quarter's revenue guidance was 1% above consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and footwear retailer stocks have held roughly steady amidst all this, with share prices up 2.3% on average since the previous earnings results.
Best Q1: Foot Locker (NYSE:FL)
Known for store associates whose uniforms resemble those of referees, Foot Locker (NYSE:FL) is a specialty retailer that sells athletic footwear, clothing, and accessories.
Foot Locker reported revenues of $1.88 billion, down 2.7% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates and optimistic earnings guidance for the full year.
Mary Dillon, President and Chief Executive Officer, said, "We had a solid start to the year, which demonstrates that our Lace Up Plan is working. We delivered comparable sales results and gross margin in line with our expectations, while earnings per share outperformed due to disciplined expense management and some favorable shifts in expense timing. Importantly, we are well-positioned with fresh assortments as we approach the summer and Back-to-School seasons, and we are pleased to be reaffirming our full-year outlook."
Foot Locker delivered the weakest performance against analyst estimates of the whole group. The stock is up 12% since reporting and currently trades at $25.23.
Is now the time to buy Foot Locker? Access our full analysis of the earnings results here, it's free.
Shoe Carnival (NASDAQ:SCVL)
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Shoe Carnival reported revenues of $300.4 million, up 6.8% year on year, outperforming analysts' expectations by 2%. It was a solid quarter for the company with a decent beat of analysts' earnings estimates and a narrow beat of analysts' gross margin estimates .
Shoe Carnival achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 13% since reporting. It currently trades at $38.87.
Is now the time to buy Shoe Carnival? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Designer Brands (NYSE:DBI)
Founded in 1969 as a shoe importer and distributor, Designer Brands (NYSE:DBI) is an American discount retailer focused on footwear and accessories.
Designer Brands reported revenues of $746.6 million, flat year on year, in line with analysts' expectations. It was a slower quarter for the company with a miss of analysts' earnings estimates and underwhelming earnings guidance for the full year.
As expected, the stock is down 34.8% since the results and currently trades at $7.21.
Read our full analysis of Designer Brands's results here.
Boot Barn (NYSE:BOOT)
With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE:BOOT) is a western-inspired apparel and footwear retailer.
Boot Barn reported revenues of $388.5 million, down 8.7% year on year, in line with analysts' expectations. Revenue aside, it was a mixed quarter for the company with a decent beat of analysts' gross margin estimates but underwhelming earnings guidance for the next quarter.
Boot Barn had the slowest revenue growth among its peers. The stock is up 18.9% since reporting and currently trades at $127.23.
Read our full, actionable report on Boot Barn here, it's free.
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