Executive Summary

• Foot Locker reported 2Q16 revenues of $1.78 billion, up 5% from the year-ago quarter and above the consensus estimate of $1.76 billion. Reported EPS were $0.94, up 11.9% year over year and exceeded expectations of $0.90.
• Comps were up 4.7%, driven by gains across basketball, running, classic footwear and apparel. Foot Locker Canada led all banners, with comps up in the low double-digits range on top of double-digit comp gains last year.
• The company maintained fiscal 2016 guidance of EPS up double-digits, in line with the consensus EPS of +10% or $4.72. Comps are expected to be up mid-single-digits versus the consensus of +4%. For 3Q16, management expects comps up mid-single digits compared to the consensus of +4.7%. EPS is projected to increase “close to” double-digits versus the consensus of +12% or $1.12.