Photo Credit: Mike Mozart

Foot Locker (FL), one of the most well known sneaker and apparel retail stores, will be reporting 3Q2016 earnings tomorrow morning before the market opens. In the last 7 quarters, the New York City based chain has beaten analyst expectations with impressive earnings surprise numbers. The company will look to do it again for an 8th consecutive quarter, as analysts are bullish on the outlook and overall performance of the corporation. The Estimize consensus is predicting EPS of $0.96 and revenue of $1.79 billion while Wall Street Analysts have calculated EPs of $0.94 and revenue of $1.78 billion.

Currency Fluctuation Rates

Foot Locker does a great deal of business outside of the United States. They have high exposure to some of the largest international markets as roughly 30% of 2014 total sales came from abroad. However, since the strength of the US Dollar has been sustained, overseas stores are losing out when those sales are repatriated back to the dollar. Last quarter, currency conversions attributed to a loss of $100 million in profits. As a result, it’s very possible prices will have to be increased to balance out the numbers and the 3rd quarter will reflect some losses.

Holiday Releases

Basketball shoes often account for a large portion of Foot Locker sales, as the company holds most of the major brand names. However, disappointing results from Dick’s Sporting Goods (DKS) on Tuesday don’t bode well. The company hopes that the yearly special releases of “Jordan’s,” “LeBron’s” and even one of Adidas’s most highly touted releases of all-time, the new Derek Rose sneaker, will bolster same store sales into the holiday quarter. Though there have been reports of a decline in basketball shoe interest, Foot Locker is more than proficient in several of the other lines it carries, mainly running and casual.

The Foot Locker brand also appeals to youth via its Kid Foot Locker stores. The yearly “Week of Greatness,” kicking off on November 21st and hosted by Kids Foot Locker nationwide, will feature some of the most anticipated footwear and apparel releases of the period. By snagging Golden State Warriors’ star Stephen Curry for a 30 second promotional spot, kids will get to see the latest and greatest gear from Under Armour (UA) and other brands that will be available in stores. Children have a large influence on parents and can drive some sales growth during the holiday season.