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Foot Locker shares erase earlier losses as Street focuses on strong April sales

  • "We believe the delay in the issuance of the vast majority of income tax refund checks until after the NBA All-Star Game [significantly] affected our February comparable store sales," CEO says.
  • Foot Locker also said it expects first-quarter earnings to range between $1.36 and $1.39 per share, below a StreetAccount estimate of $1.47.
  • But the shares rebounded from premarket losses on the CEO's stronger-than-expected commentary about April sales.
Patrick T. Fallon | Bloomberg | Getty Images

Shares of Foot Locker popped more than 4 percent on Thursday, erasing initial premarket losses as investors focused on CEO Richard Johnson's comments about strong April sales.

"Encouragingly, we are now having a strong Easter selling period, with April comparable sales likely up low double digits, which we see as confirmation that the customer's appetite for our exciting product assortments has not changed," Johnson said in a statement.

The stock had traded lower earlier in the season after the retailer cautioned investors its fiscal first-quarter results may be less than stellar in part because of a delay in IRS tax refunds.

"We believe the delay in the issuance of the vast majority of income tax refund checks until after the NBA All-Star Game [significantly] affected our February comparable store sales, which were down low-double digits," Johnson said.

"March sales rebounded well, up high-single digits; however, the strength we experienced once income tax refund checks started flowing into our customers' hands did not fully offset the slow start to the quarter," he said.

Foot Locker also said it expects first-quarter earnings to range between $1.36 and $1.39 per share, below a StreetAccount estimate of $1.47. Still, the stock was on track to post its best one-day performance since Feb. 24.

Tax season got off to a slow start because the IRS delayed refunds for more than 40 million low-income families as part of the agency's efforts to fight identity theft.

The delays affected families claiming the earned income tax credit and the additional child tax credit. The tax breaks are geared to benefit the working poor, and many families claim both.

The tax filing season started Jan. 23. But a new law required the IRS to delay tax refunds for people claiming these credits until Feb. 15.

—The Associated Press contributed to this report.

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