Foot Locker, Inc. reported earnings topped Wall Street’s consensus estimate in the third quarter as same-store sales ran up 5.7 percent.

Third Quarter Results

Net income for the company’s third quarter of 2019 was $125 million, or $1.16 per share, compared to net income of $130 million, or $1.14 per share, in the corresponding prior-year period. The current year’s result included 1) a $4 million gain in connection with the acquisition of a Canadian distribution center lease and related assets and 2) a $1 million charge recorded in connection with the company’s pension matter.

Excluding these items, non-GAAP earnings were $1.13 per share and $0.95 per share for the third quarter of 2019 and 2018, respectively, representing a gain of 18.9 percent. Wall Street’s consensus estimate had been $1.08.

Third quarter comparable-store sales increased 5.7 percent, above analysts’ consensus estimate of 4.7 percent.

Total third quarter sales increased 3.9 percent, to $1,932 million, compared to sales of $1,860 million for the corresponding prior-year period. Sales were just shy of analysts’ estimates of $1.94 billion.

Excluding the effect of foreign exchange rate fluctuations, total sales for the third quarter of 2019 increased 5.1 percent. The company’s gross margin rate increased to 32.1 percent from 31.6 percent a year ago, while the selling, general, and administrative expense rate improved to 21.3 percent of sales from 21.4 percent a year ago.

“We are pleased with our performance in the quarter, which reflects the success of our strategic focus on building even deeper connections with our customers and further strengthening relationships with our vendors,” said Richard Johnson, chairman and chief executive officer. “Across the company, we are making great strides in implementing our four strategic imperatives, which are designed to ensure we are best positioned to compete in the retail marketplace by inspiring and empowering youth culture while also strengthening our bottom line and driving value for our shareholders.”

Lauren Peters, executive vice president and chief financial officer, said, “The strong results we delivered in the quarter reflect our work to drive the top line, while continuing to strengthen our operational execution, as reflected in our improved gross margin, SG&A, and inventory productivity. As we enter the all-important holiday selling season, we will remain focused on execution to continue to position us to achieve our long-term financial objectives.”

Year-To-Date Results

Net income for the company’s first nine months of the year was $357 million, or $3.23 per share on a GAAP basis, compared to net income of $383 million, or $3.28 per share, for the corresponding period in 2018. On a non-GAAP basis, earnings per share for the nine-month period totaled $3.32 compared to $3.16 per share earned in the same period in 2018. Year-to-date sales were $5,784 million, an increase of 2.1 percent compared to sales of $5,667 million in the corresponding nine-month period of 2018. Year-to-date, comparable store sales increased 3.8 percent, while total year-to-date sales, excluding the effect of foreign currency fluctuations, increased by 3.6 percent.

Financial Position

As of November 2, 2019, the company’s merchandise inventories were $1,304 million, 0.1 percent lower than at the end of the third quarter last year. Using constant currencies, inventory increased 0.2 percent.

The company’s cash totaled $744 million, while the debt on its balance sheet was $122 million. The company repurchased 4.6 million shares for $178 million during the quarter and paid a quarterly dividend of $0.38 per share, for a total of $41 million.

Store Base Update

During the third quarter, the company opened 11 new stores, remodeled or relocated 34 stores, and closed 25 stores. As of November 2, 2019, the company operated 3,160 stores in 27 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 128 franchised Foot Locker stores were operating in the Middle East, as well as 10 franchised Runners Point stores in Germany.