Piper Jaffray analyst, Erinn Murphy cut projected 1Q EPS on Foot Locker (NYSE: FL) to $1.41 (vs. $1.45 prior) to reflect incremental spend from the headquarter relocation during the quarter. However, full year is unchanged at $4.75 as strength in the underlying business offsets higher than expected one time costs.

Adjusted EPS was $1.16 vs. the Street's $1.12. Comp-store sales were up 7.9%, which compares to the Street's published 5.9% gain. Total sales growth of 5% included a 380bps FX headwind; constant-currency sales growth was up 8.8%. Inventory was up 2.8% Y/Y on a reported basis. Gross margins were up 70bps Y/Y, to 33.6%. Adjusted SG&A was at 19.3%. Overall guidance is calling for comp growth of +MSD in each quarter of FY17 and +DD EPS growth with Q1 expected to post the softest Y/Y growth. Gross margin is expected to improve 10-30 bps behind improved occupancy leverage and SG&A is expected to lever 10-30 bps (with a $4M headwind in Q1 from incremental HQ relocation expenses).

Geographically, Foot Locker experienced +teens comp growth in Europe (led by +DD increases in almost all countries), +DD growth in Canada, and +mid-teens Y/Y comp growth in APAC. During Q4, comps in the U.S. were +MSD (low end) in November, +teens in December, up +LSD in January, and February-to-date up +LSD. However, the company expects to end Q1 with a mid-single digit comp.

By category Foot Locker posted +mid-teen Y/Y comps in footwear, driven by +teens growth in running, +MSD (low end) growth in basketball and solid results in the boots and classic category (including good Timberland growth). In apparel comps were +LSD, while results in accessories were down HSD. Merchandise margins were +50 bps in Q4 driven by an improvement in apparel margins. Lastly, Foot Locker closed 49 net stores during the quarter (down 1.2% Y/Y looking at the total store base), and the overall DTC comp was +9.6% during the quarter, or 12.7% of total sales.

No change to Neutral rating or price target of $67 based on 14x FY17E EPS.

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Shares of Foot Locker closed at $64.14 yesterday.