Foot Locker Inc. will close 165 stores this year and spend millions to upgrade the remaining properties, it announced on Friday, as the shoe retailer aims to further improve margins after better-than-expected fourth-quarter earnings that sent its shares soaring.
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A number of top U.S. businesses, including Gap and J.C. Penney, also announced store closures this week after the 2018 holiday shopping season, furthering the divide between successful retailers and those struggling to compete against Amazon.
But at Foot Locker, upgrades to its existing brick-and-mortar locations and a diverse product line helped spur a 9.7 percent growth in same-store sales, double what experts were predicting for the three months through Feb. 2.
“The fundamentals of our core business remain strong and led to meaningful improvement in our financial results, not only during the fourth quarter but throughout 2018,” said CEO Richard Johnson. "By maintaining our focus on bringing differentiated experiences to youth culture, we can continue to elevate our financial performance."
The firm has been investing heavily in expanding its offering to consumers. It announced a $12.5 million investment in apparel company Rockets of Awesome this week, and previously poured $100 million in sneaker resale website Goat Group.
Foot Locker announced earlier this month it would spend $1.2 billion on share repurchases – a decision that comes as federal scrutiny of the practice intensifies. It also plans to increase capital spending to $275 million in 2019.
The New York City-based company reported profits of $1.56 per share, higher than Wall Street estimates, and sales of nearly $3 billion for the quarter.