Written by StockNews.com

Foot Locker, Inc. (NYSE: FL) early Friday posted better than expected fourth-quarter profits and in-line sales results but warned that it sees a weaker sales environment in 2017 versus 2016.

The New York City-based athletic footwear and apparel retailer reported Q4 EPS of $1.37, which was $0.05 better than the Wall Street consensus estimate of $1.32.

Revenues rose 5.3% from last year to $2.11 billion, matching analysts’ view for $2.11 billion.

Foot Locker noted that fourth quarter comparable store sales (“comps”) rose 5% from last year, while total sales gained 5.3%. Comps are considered a key indicator of a retailer’s health, since they only measure the year-over-year sales performance of stores open at least 12 months.

FL was also able to boost margins in the latest period, mainly via cost cuts. Its gross margin rate edged higher to 33.7% percent of sales, form 33.6% last year. Meanwhile, its selling, general, and administrative expense rate improved by 60 basis points, to 18.7% of sales.

Looking ahead, Foot Locker said it sees a “softer sales environment” this year, but still expects comps to rise at a mid-single-digit rate, with EPS gains in the double digits. Wall Street is looking for full-year EPS gains of 9.3%, to $5.27 per share.

The company commented via press release:

“Generating our seventh consecutive year of meaningful sales and profit growth is a strong testament to Foot Locker, Inc.’s solid position at the center of sneaker culture,” said Richard Johnson, Chairman of the Board and Chief Executive Officer. “All credit goes to the incredibly talented team of associates we have around the world, and I want to thank them sincerely for another outstanding performance in 2016. Due in part to the change in the cadence of income tax refund check distribution, we are facing a challenging retail sales environment as we enter 2017; however, we believe the strategic initiatives we have in place, coupled with our strong vendor relationships, will enable us to deliver another year of record performance.”

...Year-to-date, FL had declined -2.88% prior to today’s report, versus a 5.78% rise in the benchmark S&P 500 index during the same period.

FL currently has a StockNews.com POWR Rating of B (Buy) and is ranked #7 of 33 stocks in the Athletics & Recreation category.