Foot Locker had a strong quarter, according to its latest earnings report released Friday morning. Over the three months ending on Oct. 31, the brand brought in $128 million in revenue, beating the $122 million it brought in during the same period last year by about 5%.
Notably, comparable store sales improved by nearly 8% for the last three months, despite Covid-19. Foot Locker has continued to invest heavily in physical retail over the course of the pandemic, opening 27 new stores during the last quarter. In particular, basketball shoes and comfort apparel categories saw the biggest sales increases, with the latter driven by the need for work-from-home attire.
But with Covid-19 cases rising around the country, companies including Foot Locker are getting prepared for a second lockdown, and subsequently expect less revenue from physical stores well into the new year.
Thus far, the company seems optimistic. “With close to $2 billion in liquidity, we believe our company is well prepared both financially and operationally to continue navigating the ongoing pandemic,” said Lauren Peters, evp and CFO of Foot Locker, on Friday earning’s call. “Looking ahead, with over 10% of our store fleet temporarily closed due to Covid restrictions, we are taking proactive measures for the upcoming holiday period to deliver outstanding experiences both in our stores and online,.”
Much of Foot Locker’s recent efforts have been split evenly across e-commerce and its more than 3,000 stores. For example, the company’s 12 Days of Greatness holiday campaign, which sees exclusive drops from designers and brands like Jeff Staple, Chinatown Market and Kid Cudi x Adidas, are debuting over 12 days leading up to Christmas, both on its e-commerce site and at about a dozen stores.
Others in the retail industry are preparing for a tougher holiday season due to a second lockdown.
“Looking at all the trends and indicators, we expect that Covid-19 will make this a tough holiday season for retailers’ brick-and-mortar channels, even for those who have seen stronger than expected performance,” said Raghav Sharma, co-founder of AR-powered virtual fitting room solution Perfitly. “Shoppers themselves will remain wary of physical commerce touchpoints. This can further depress or stop foot traffic altogether. Instead, companies should be preparing to meet the demands of much higher online sales.”
Regardless of any mandated restrictions, Foot Locker is planning to close all of its stores on Black Friday over safety concerns. Instead, it will encourage people to shop online and to leverage some of the omnichannel features it’s built up in the last eight months, like buy-online, pick-up in-store, said CEO Reichard Johnson who spoke on the retailer’s earnings call.
“Foot Locker should be poised to keep up its business growth and momentum, as there are no signs of sneakers and sporting goods sales slowing down,” said Durk Stelter, chief revenue officer of CX platform Linc. “In order to continue growth, Foot Locker should be prioritizing the customer experience on its e-commerce site and allowing many different options — such as buy-online, pick-up in-store, ship-to-store and curbside availability — so that their customers can easily find the product they need and receive the best order support possible.”
