NEW YORK, Aug. 19, 2016 /PRNewswire/ -- Foot Locker,
Inc. (NYSE: FL), the New
York-based specialty athletic retailer, today reported
financial results for its second quarter ended July 30, 2016.
Second Quarter Results
Net income for the Company's second quarter ended July 30, 2016 was $127
million, or $0.94 per share,
compared with net income of $119
million, or $0.84 per share,
last year. Second quarter comparable-store sales increased
4.7 percent. Total sales increased 5.0 percent, to
$1,780 million this year, compared
with sales of $1,695 million for the
corresponding prior-year period. Excluding the effect of
foreign currency fluctuations, total sales for the second quarter
increased 5.4 percent.
The Company's gross margin rate improved to 33.0 percent of
sales from 32.6 percent a year ago, while the selling, general, and
administrative expense rate increased to 19.7 percent of sales from
19.5 percent.
"As a Company, Foot Locker has strong leadership positions in
the athletic industry, with the most important being our deep
understanding of the core customer for each of our banners," said
Richard Johnson, Chairman of the
Board and Chief Executive Officer. "We share this
understanding with our key vendors, which enables us to partner
with them to deliver the trend-right, premium footwear and apparel
assortments our customers seek, which in turn has led to
consistently outstanding financial results such as we announced
today. Within the second quarter, we drove comparable sales
gains across basketball, running, and classic footwear, as well as
apparel. We also posted gains in all regions and channels in
which we operate, reflecting the success of our strategic
initiatives to build our Company to be an enduring retail leader
with strengths across many dimensions."
Year-To-Date Results
Net income for the
Company's first six months of the year increased to $318 million, or $2.33 per share, compared to net income of
$303 million, or $2.14 per share, for the corresponding period in
2015. Earnings per share for the six-month period increased
8.9 percent compared to the same period in 2015. Year-to-date
sales were $3,767 million, an
increase of 4.3 percent compared to sales of $3,611 million in the corresponding six-month
period of 2015. Year-to-date comparable store sales have
increased 3.7 percent. Excluding the effect of foreign
currency fluctuations, total year-to-date sales increased by 4.6
percent.
Financial Position
At July 30, 2016, the Company's merchandise
inventories were $1,339 million, 1.7
percent higher than at the end of the second quarter last
year. Using constant currencies, inventory increased 1.9
percent.
The Company's cash totaled $945
million, while the debt on its balance sheet was
$129 million. The Company spent
approximately $188 million to
repurchase 3.35 million shares during the quarter and paid a
quarterly dividend of $0.275,
spending $37 million.
"The Company has made substantial and thoughtful investments in
its stores, digital sites, and infrastructure over the years, which
have led to significantly improved productivity," said Lauren Peters, Executive Vice President and
Chief Financial Officer. "The returns from those investments,
combined with careful inventory and expense management, have led to
our current strong financial position. This position of
strength underpins our commitment to balance our allocation of
capital between additional investments in the business and
returning substantial amounts of cash to shareholders through our
dividend and share repurchase programs, as evidenced by the
$350 million of cash we have returned
to shareholders in the first half of 2016."
Store Base Update
During the second
quarter, the Company opened 23 new stores, remodeled or relocated
64 stores, and closed 18 stores. As of July 30, 2016, the Company operated 3,401 stores
in 23 countries in North America,
Europe, Australia, and New Zealand. In addition,
54 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 15 franchised Runners
Point stores in Germany.
The Company is hosting a live conference call at 9:00 a.m. (EDT) today, August 19, 2016, to review these results, provide
comments on the status of its current initiatives, and discuss
trends in its business and the athletic industry. This
conference call may be accessed live by dialing 1-800-916-9263
(U.S. and Canada) or +44
208-196-2881 (International), or via the Investor Relations section
of the Foot Locker, Inc. website at
http://www.footlocker-inc.com. Please log on to the website
15 minutes prior to the call in order to download any necessary
software. A replay of the call will be available via webcast
from the same Investor Relations section of the Foot Locker, Inc.
website at http://www.footlocker-inc.com through September 2, 2016.
Disclosure Regarding Forward-Looking
Statements
This report contains forward-looking statements within the
meaning of the federal securities laws. Other than statements of
historical facts, all statements which address activities, events,
or developments that the Company anticipates will or may occur in
the future, including, but not limited to, such things as future
capital expenditures, expansion, strategic plans, financial
objectives, dividend payments, stock repurchases, growth of the
Company's business and operations, including future cash flows,
revenues, and earnings, and other such matters, are forward-looking
statements. These forward-looking statements are based on many
assumptions and factors which are detailed in the Company's filings
with the Securities and Exchange Commission, including the effects
of currency fluctuations, customer demand, fashion trends,
competitive market forces, uncertainties related to the effect of
competitive products and pricing, customer acceptance of the
Company's merchandise mix and retail locations, the Company's
reliance on a few key vendors for a majority of its merchandise
purchases (including a significant portion from one key vendor),
cybersecurity breaches, pandemics and similar major health
concerns, unseasonable weather, deterioration of global financial
markets, economic conditions worldwide, deterioration of business
and economic conditions, any changes in business, political and
economic conditions due to the threat of future terrorist
activities in the United States or
in other parts of the world and related U.S. military action
overseas, the ability of the Company to execute its business and
strategic plans effectively with regard to each of its business
units, and risks associated with global product sourcing, including
political instability, changes in import regulations, and
disruptions to transportation services and distribution.
For additional discussion on risks and uncertainties that may
affect forward-looking statements, see "Risk Factors" disclosed in
the 2015 Annual Report on Form 10-K. Any changes in such
assumptions or factors could produce significantly different
results. The Company undertakes no obligation to update
forward-looking statements, whether as a result of new information,
future events, or otherwise.
FOOT LOCKER,
INC.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
Periods ended July
30, 2016 and August 1, 2015
|
(In millions,
except per share amounts)
|
|
|
|
Second
Quarter
2016
|
|
Second
Quarter
2015
|
|
Year-To-Date
2016
|
|
Year-To-Date
2015
|
|
Sales
|
$
1,780
|
|
$
1,695
|
|
$
3,767
|
|
$
3,611
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
1,193
|
|
1,142
|
|
2,484
|
|
2,388
|
|
SG&A
|
350
|
|
331
|
|
711
|
|
676
|
|
Depreciation and
amortization
|
39
|
|
36
|
|
78
|
|
71
|
|
Interest expense,
net
|
1
|
|
1
|
|
1
|
|
2
|
|
Other
Income
|
(1)
|
|
-
|
|
(3)
|
|
(1)
|
|
|
1,582
|
|
1,510
|
|
3,271
|
|
3,136
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
$
198
|
|
$
185
|
|
$
496
|
|
$
475
|
|
Income tax
expense
|
71
|
|
66
|
|
178
|
|
172
|
|
Net income
|
$
127
|
|
$
119
|
|
$
318
|
|
$
303
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
0.94
|
|
$
0.84
|
|
$
2.33
|
|
$
2.14
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
diluted shares
outstanding
|
135.5
|
|
141.3
|
|
136.6
|
|
141.7
|
|
|
|
|
|
|
|
|
|
|
FOOT LOCKER,
INC.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
(In
millions)
|
|
|
July 30,
2016
|
|
August 1,
2015
|
Assets
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
945
|
|
$
970
|
Merchandise
inventories
|
1,339
|
|
1,317
|
Other current
assets
|
301
|
|
268
|
|
2,585
|
|
2,555
|
|
|
|
|
Property and
equipment, net
|
726
|
|
644
|
Deferred tax
assets
|
174
|
|
222
|
Other
assets
|
277
|
|
283
|
|
$
3,762
|
|
$
3,704
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
348
|
|
$
359
|
Accrued and other
liabilities
|
326
|
|
380
|
Current portion of
capital lease obligations
|
1
|
|
2
|
|
675
|
|
741
|
|
|
|
|
Long-term debt and
obligations under capital leases
|
128
|
|
130
|
Other
liabilities
|
381
|
|
254
|
SHAREHOLDERS'
EQUITY
|
2,578
|
|
2,579
|
|
$
3,762
|
|
$
3,704
|
|
|
|
|
FOOT LOCKER,
INC.
|
Store and Square
Footage
|
(unaudited)
|
|
Store activity is
as follows:
|
|
|
January 30,
2016
|
Opened
|
Closed
|
July 30,
2016
|
Relocations/
Remodels
|
Foot Locker
US
|
971
|
3
|
8
|
966
|
41
|
Foot Locker
Europe
|
606
|
7
|
4
|
609
|
21
|
Foot Locker
Canada
|
125
|
-
|
3
|
122
|
4
|
Foot Locker Asia
Pacific
|
94
|
3
|
1
|
96
|
4
|
Lady Foot
Locker
|
156
|
-
|
13
|
143
|
1
|
SIX:02
|
30
|
-
|
-
|
30
|
-
|
Kids Foot
Locker
|
374
|
35
|
2
|
407
|
12
|
Footaction
|
268
|
1
|
5
|
264
|
13
|
Champs
Sports
|
550
|
4
|
1
|
553
|
22
|
Runners
Point
|
121
|
2
|
-
|
123
|
1
|
Sidestep
|
88
|
-
|
-
|
88
|
-
|
Total
|
3,383
|
55
|
37
|
3,401
|
119
|
Selling and gross
square footage are as follows:
|
|
|
January 30,
2016
|
|
July 30,
2016
|
(in
thousands)
|
Selling
|
Gross
|
|
Selling
|
Gross
|
Foot Locker
US
|
2,451
|
4,234
|
|
2,469
|
4,265
|
Foot Locker
Europe
|
863
|
1,884
|
|
870
|
1,904
|
Foot Locker
Canada
|
279
|
435
|
|
275
|
430
|
Foot Locker Asia
Pacific
|
128
|
210
|
|
133
|
217
|
Lady Foot
Locker
|
208
|
352
|
|
195
|
324
|
SIX:02
|
62
|
101
|
|
60
|
101
|
Kids Foot
Locker
|
602
|
1,029
|
|
671
|
1,145
|
Footaction
|
800
|
1,303
|
|
781
|
1,283
|
Champs
Sports
|
1,947
|
2,972
|
|
1,958
|
3,014
|
Runners
Point
|
158
|
259
|
|
163
|
269
|
Sidestep
|
82
|
139
|
|
82
|
139
|
Total
|
7,580
|
12,918
|
|
7,657
|
13,091
|
Contact:
|
John A.
Maurer
|
|
Vice
President,
|
|
Treasurer and
Investor Relations
|
|
Foot Locker,
Inc.
|
|
(212)
720-4092
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/foot-locker-inc-reports-2016-second-quarter-results-300315756.html
SOURCE Foot Locker, Inc.