The CEO of Foot Locker believes that consumers are becoming more willing to pay full price for products, indicating a positive turnaround for the company.

• As CEO Mary Dillon's turnaround plan gains traction, Foot Locker reported better-than-expected comparable sales.
• The former Ulta boss stated that average selling prices rose during the quarter, indicating that consumers are willing to pay the full price for the right product.
• The company has been revamping its stores and winning back brands to reverse an ongoing sales slump in the sneaker industry.

turnaround is starting to bear some fruit.

Despite expecting a 3.1% decline in sales during its fiscal first quarter, the sneaker giant actually experienced a 1.8% drop, which was better than anticipated, according to StreetAccount.

LSEG reaffirmed its sales guidance for the fiscal year, projecting a range of a 1% decline to a 1% gain, compared to the 0.6% decline forecasted by analysts.

Based on a survey of analysts by LSEG, here's how the company performed compared to Wall Street's expectations.

• Earnings per share: 22 cents adjusted vs. 12 cents expected
• Revenue: $1.88 billion vs. $1.88 billion expected

In the three-month period ending May 4, Foot Locker reported a net income of $8 million, or 9 cents per share, compared to $36 million, or 38 cents per share, in the same period a year ago. After adjusting for one-time items such as impairments related to store closures and restructuring, Foot Locker reported earnings of 22 cents per share.

A year ago, sales were $1.93 billion, but they decreased to $1.88 billion, resulting in a 3% drop.

LSEG reports that Foot Locker anticipates adjusted earnings per share to be between $1.50 and $1.70 for the full year, surpassing analyst predictions of $1.57.

According to StreetAccount, analysts had predicted 1.5% growth, but the company is expected to achieve comparable sales growth of between 1% and 3%.

"CEO Mary Dillon stated in an interview with CNBC that the first quarter of the year showed a strong start, indicating that the "Lace Up Plan" is effective. She expressed confidence in the upcoming launch of an enhanced FLX rewards program and a revamped mobile app, which she believes will drive customer engagement and commerce. Additionally, she mentioned growth opportunities with all brand partners, including a return to growth with Nike in the holiday quarter."

The former CEO of has been working to revive Foot Locker, but the process has taken longer than anticipated.

Foot Locker's sales have been declining due to the impact of inflation on low-income consumers and the unpredictable behavior of brand partners, such as Nike, which has reduced the number of new releases it sends to Foot Locker's stores.

The business has been negatively impacted by the decline in sales and revenue, which can be attributed to the poor performance of its Champs Sports banner.

Despite relying on promotions to boost sales, Foot Locker has lost Wall Street's confidence, resulting in a 28% decline in shares year to date, as of Wednesday's close.

However, things are starting to look up for the company.

Nike CEO John Donahoe admitted that the brand overstepped when it prioritized its own stores and website over wholesalers in April, and now he is emphasizing the importance of investing in retail partners during the brand's turnaround.

Despite inflation still affecting Foot Locker's core consumer, the company's average selling price increased during the quarter, indicating that consumers are willing to pay full price for the right product.

"Dillon stated that our consumer prioritizes spending with purpose when they have discretionary income, even though their spending may be limited."

Dillon has been working to revamp Foot Locker's stores, which still account for about 80% of its annual sales. She has built new, off-mall locations, closed underperforming stores, and refreshed existing locations to make brands willing to send their best products and consumers willing to choose Foot Locker instead of shopping with a brand directly or going to a competitor like Finish Line.

The retailer unveiled its "store of the future" in April, which completely changes the old Foot Locker format and will serve as a model for its store refreshes.

"Dillon stated, "Instead of a wall of shoes, it's really a house of brands. Our brand partners are thrilled with how it's coming to life. We've heard this from everyone.""