How did FL's Q4 2025 earnings surprise impact investor sentiment?

Foot Locker's (FL) Q4 2025 earnings surprise had a positive impact on investor sentiment, as evidenced by the following:

1. **Stock Price Reaction**: Despite a significant earnings surprise with an EPS of $0.14, which was a notable improvement from the previous year's EPS of $0.72, the stock price decreased by 15.42% to $12.45. This suggests that the market may have had concerns or reacted to other factors beyond the earnings beat.

2. **Analyst Optimism**: Analysts surveyed by Zacks Investment Research had expected earnings of $0.73 per share, but Foot Locker reported $0.86 per share, adjusted for asset impairment costs and discontinued operations. This beat expectations and indicates a strong performance, which could have positively influenced investor sentiment.
3. **Comparative Sales Growth**: Foot Locker reported a 2.6% increase in comparable sales, which exceeded expectations. This suggests that the company's sales trends are improving, which is a positive sign for investors.
4. **Gross Margin Expansion**: The company achieved a gross margin expansion of 300 basis points, which is a significant improvement. Gross margin expansion typically indicates better operational efficiency and can lead to increased profitability, which may have boosted investor confidence.
5. **Investor Sentiment Indicators**: The company's stock rose more than 1% in premarket trade following the earnings release. This indicates that some investors may have reacted positively to the earnings news, despite the overall market sentiment or other factors affecting the stock price.

In conclusion, while the earnings surprise itself was positive, the impact on investor sentiment appears to have been mixed, with some positive indicators (such as the earnings beat and gross margin expansion) likely contributing to investor optimism, but other factors (such as the stock price decrease and market concerns) potentially offsetting these benefits.