In six quarters, Foot Locker records its first instance of comparable sales growth.

• Wall Street's estimates were surpassed by Foot Locker on both the top and bottom lines, with the company reporting comparable sales growth for the first time in six quarters.
• For the first time in over two years, the sneaker company experienced an increase in its gross margin.
• Foot Locker is relocating its headquarters from New York City to Florida and withdrawing from several international markets as part of its streamlining operations.

For the first time in six quarters, comparable sales grew on Wednesday as its ongoing efforts to revitalize its stores and enhance the customer experience yielded positive results.

Despite the challenges, the sneaker company's sales increased by 2.6% in its second quarter, surpassing the predicted growth of 0.7%, and its gross margin expanded for the first time in over two years, according to StreetAccount.

Despite the positive trends, shares dropped about 10% in premarket trading.

""Mary Dillon, CEO of the company, announced in a press release that the Lace Up Plan is working. The company's top line trends strengthened during the quarter, with a solid start to Back-to-School and stabilization in the Champs Sports banner," according to the release."

Based on a survey of analysts by LSEG, how Foot Locker performed compared to Wall Street's expectations.

• Loss per share: 5 cents adjusted vs. 7 cents expected
• Revenue: $1.90 billion vs. $1.89 billion expected

In the three-month period that ended Aug. 3, Foot Locker lost $12 million, or 13 cents per share, compared with a loss of $5 million, or 5 cents per share, a year earlier. However, excluding one-time items, Foot Locker posted a loss of 5 cents per share.

Sales increased by approximately 2% to $1.90 billion from $1.86 billion the previous year.

Despite analysts expecting a 0.4% decline in sales for the current fiscal year, Foot Locker expects sales to be within a range of a 1% decline to 1% growth from the prior year.

LSEG reported that Foot Locker's earnings per share guidance was maintained, with earnings expected to fall between $1.50 and $1.70. This is above the $1.54 that analysts had predicted.

Under Mary Dillon's leadership, Foot Locker has undergone a transformation to remain competitive in a changing retail landscape where brands are less dependent on multi-brand retailers.

Dillon has focused on repairing the company's relationship with its largest brand partner, Foot Locker, and has also evaluated the aging store fleet, where the company generates about 80% of its sales. This year, the company plans to invest $275 million in upgrading its stores through renovations and modernizations. Foot Locker has reported that the improvements are having a positive impact.

Foot Locker has announced that it will close its stores and e-commerce operations in several countries in the Asia Pacific and European regions, including South Korea, Denmark, Norway, Sweden, Greece, and Romania. As a result, 30 of its 140 stores in the Asia Pacific region and 629 in Europe will be closed or transferred to a third-party operator.

In late 2025, Foot Locker plans to relocate its global headquarters from New York City to St. Petersburg, Florida, while maintaining a limited presence in the Big Apple.

Foot Locker aims to strengthen its presence in St. Petersburg through relocation, enhance team collaboration across departments and banners, and cut costs, as stated in a news release.

Despite the negative impact of its Champs banner on Foot Locker's overall performance, the company has seen some improvement in this area during the quarter. Specifically, comparable sales were down 3.9% in the most recent quarter, which represents a significant improvement from the 25.3% decline seen in the previous year.

Dillon's efforts are working as Foot Locker is driving sales despite its core consumer facing inflation and high interest rates.

In contrast to Nike's stock, which has decreased by over 21% this year, the company's shares have increased by more than 5% as of Tuesday's close.

Although demand has decreased in the retail industry, consumers are still spending money. However, they are becoming more selective about where they spend their money, which makes execution even more crucial.

"As we approach the end of the year, our strategies are gaining traction, and I am confident that we are taking the necessary steps to ensure the Company's continued success and growth for the next 50 years, ultimately benefiting our shareholders."