Foot Locker (FL) maintained a nearly 15% gain headed into the Thanksgiving holiday, even as the Dow gave back its gains toward the close on Wednesday.
Shares finished up 14.91% to $52.96, up nearly $7 from Tuesday's $46.09 close.
The shoe and apparel retailer reported earnings of $0.95 a share, which was $0.03 a share more than analysts expected, and barely cleared the bar on revenue. The vendor also raised its margins and crushed expectations on same-store sales.
"We saw our comparable sales accelerate nicely as we moved through the quarter with August up low single digits followed by mid-single digit comp gains in both September and October," CEO Dick Johnson said.
Overall sales in the quarter did drop sequentially, but that news is taking a back seat to the forecast laid out by executives.
"We believe we are well-positioned to produce even stronger results in the all-important holiday selling season and the fourth quarter overall," Johnson said, highlighting his confidence moving forward. "We remain on track to achieve the annual top- and bottom-line guidance we gave you for 2018, including a low-single digit comparable sales increase and a double-digit EPS gain."
Foot Locker's same-store sales, which charted nearly one percentage point above expectations in the third quarter, are expected to increase by mid-single digits in the company's peak fourth quarter.
Foot Locker's positive pronouncements pleased analysts, which prompted price target hiking at numerous firms.
"The beat and raise is evidence that FL's operational discipline and strategic investments, particularly in digital, are beginning to bear fruit," Susquehanna analyst Sam Poser wrote in a note on Wednesday. "We believe the third-quarter results represent the beginning of a positive transformation that will further take shape in the fourth quarter and into 2019."
Poser set a $64 price target and a "Buy" rating for the stock.
"FL remains our favorite way to play Nike's resurgence in North America, while we view concerns over Nike's shift to a direct strategy as overblown," Jefferies analyst Janine Stichter wrote in a note on Wednesday. "Management's commentary around the strength of their relationship with NKE should help to quell some fears [about Nike's DTC push]."
She noted that she expects the two sports retail giants to continue collaborating as the direct to consumer strategy at Nike encounters further problems.
Stichter raised her price target from $60 to $62 per share on the anticipation of further growth.
To be sure, concerns still abound in the retail stock.
Margin expansion amid international and digital expansion, over-reliance on Nike, and technical resistance all remain as primary concerns on investing in the company amidst a bearish retail environment.
Heading into Black Friday, those concerns seem minimized as Foot Locker seems to be one of the few places investors can find even footing in retail.