NEW YORK, May 19, 2017 /PRNewswire/ -- Foot Locker, Inc.
(NYSE: FL), the New York-based
specialty athletic retailer, reported today financial results for
its first quarter ended April 29,
2017.
First Quarter Results
Net income for the Company's
first quarter ended April 29, 2017
was $180 million, or $1.36 per share, compared with net income of
$191 million, or $1.39 per share in the same period of 2016.
First quarter comparable-store sales increased 0.5
percent. Total sales increased 0.7 percent, to $2,001 million this year, compared with sales of
$1,987 million for the corresponding
prior-year period. Excluding the effect of foreign currency
fluctuations, total sales for the first quarter increased 1.8
percent. The Company's gross margin rate decreased to 34.0
percent of sales from 35.0 percent a year ago, and the selling,
general, and administrative expense rate increased 30 basis points
to 18.5 percent of sales.
"The first quarter was one of our most profitable quarters ever,
but it did fall short of our original expectations," said
Richard Johnson, Chairman of the
Board and Chief Executive Officer. "The slow start we
experienced in February, which we believe was largely due to the
delay in income tax refunds, was unfortunately not fully offset by
much stronger sales in March and April. Nonetheless, we
believe our banners remain at the center of a vibrant sneaker
culture. We are confident that our customers have not lost
their tremendous appetite for athletic footwear and apparel and
that our position in the industry is stronger than ever."
Financial Position
At April 29, 2017, the Company's
merchandise inventories were $1,279
million, 1.5 percent higher than at the end of the first
quarter last year. Using constant currencies, inventory
increased 2.8 percent. The Company's cash totaled
$1,049 million, while the debt on its
balance sheet was $127 million.
The Company spent $38 million to
repurchase 546 thousand shares during the quarter and paid a
quarterly dividend of $0.31 per
share.
"Our overall financial position remains very strong," said
Lauren Peters, Executive Vice
President and Chief Financial Officer. "In addition, the
tight inventory discipline we have maintained over the last several
years is serving us well now, because even with first quarter sales
that ran below expectations, we believe our inventory is still well
positioned to drive improved top line results over the balance of
the year. At the same time, we are aggressively reviewing and
implementing opportunities to lower expenses as we work to achieve
a mid-single digit EPS increase for the full year."
Store Base Update
During the first quarter, the Company opened 30 new stores,
remodeled or relocated 61 stores, and closed 39 stores. As of
April 29, 2017, the Company operated
3,354 stores in 23 countries in North
America, Europe,
Australia, and New Zealand.
In addition, 62 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, May
19, 2017, to review these results and discuss the outlook
for the remainder of 2017, and comment on the status of its current
initiatives. This conference call may be accessed live by
dialing 1-800-749-1342 (U.S. and Canada) or +44 203-300-0091 (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
register. 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 June 2, 2017.
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 2016 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
April 29, 2017 and April 30, 2016
|
(In millions,
except per share amounts)
|
|
|
First
Quarter
2017
|
|
First
Quarter
2016
|
|
Sales
|
$
|
2,001
|
|
$
|
1,987
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,321
|
|
|
1,291
|
|
SG&A
|
|
371
|
|
|
361
|
|
Depreciation and
amortization
|
|
41
|
|
|
39
|
|
Interest expense,
net
|
|
-
|
|
|
-
|
|
Other
income
|
|
(1)
|
|
|
(2)
|
|
|
|
1,732
|
|
|
1,689
|
|
|
|
|
|
|
|
|
Income before
taxes
|
$
|
269
|
|
$
|
298
|
|
Income tax
expense
|
|
89
|
|
|
107
|
|
Net income
|
$
|
180
|
|
$
|
191
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
1.36
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
Weighted-average
diluted shares
outstanding
|
|
132.6
|
|
|
137.8
|
|
|
|
|
|
|
|
|
FOOT LOCKER,
INC.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
(In
millions)
|
|
|
April
29,
2017
|
|
April
30,
2016
|
Assets
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
1,049
|
|
$
1,062
|
Merchandise
inventories
|
1,279
|
|
1,260
|
Other current
assets
|
294
|
|
270
|
|
2,622
|
|
2,592
|
|
|
|
|
Property and
equipment, net
|
792
|
|
706
|
Deferred tax
assets
|
162
|
|
182
|
Other
assets
|
301
|
|
278
|
|
$
3,877
|
|
$
3,758
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
208
|
|
$
230
|
Accrued and other
liabilities
|
327
|
|
347
|
Current portion of
capital lease obligations
|
-
|
|
1
|
|
535
|
|
578
|
|
|
|
|
Long-term debt and
obligations under capital leases
|
127
|
|
128
|
Other
liabilities
|
393
|
|
377
|
SHAREHOLDERS'
EQUITY
|
2,822
|
|
2,675
|
|
$
3,877
|
|
$
3,758
|
FOOT LOCKER,
INC.
|
Store and Square
Footage
|
(unaudited)
|
|
Store activity is
as follows:
|
|
|
January 28,
2017
|
Opened
|
Closed
|
April 29,
2017
|
Relocations/
Remodels
|
Foot Locker
US
|
948
|
2
|
12
|
938
|
17
|
Foot Locker
Europe
|
622
|
4
|
5
|
621
|
14
|
Foot Locker
Canada
|
119
|
-
|
2
|
117
|
-
|
Foot Locker Asia
Pacific
|
95
|
2
|
1
|
96
|
6
|
Kids Foot
Locker
|
411
|
12
|
1
|
422
|
10
|
Lady Foot
Locker
|
124
|
-
|
7
|
117
|
-
|
Champs
Sports
|
545
|
2
|
2
|
545
|
6
|
Footaction
|
261
|
6
|
6
|
261
|
8
|
Runners
Point
|
122
|
-
|
1
|
121
|
-
|
Sidestep
|
86
|
-
|
2
|
84
|
-
|
SIX:02
|
30
|
2
|
-
|
32
|
-
|
Total
|
3,363
|
30
|
39
|
3,354
|
61
|
Selling and gross
square footage are as follows:
|
|
|
January 28,
2017
|
|
April 29,
2017
|
(in
thousands)
|
Selling
|
Gross
|
|
Selling
|
Gross
|
Foot Locker
US
|
2,453
|
4,250
|
|
2,449
|
4,253
|
Foot Locker
Europe
|
907
|
1,971
|
|
911
|
1,969
|
Foot Locker
Canada
|
265
|
432
|
|
262
|
424
|
Foot Locker Asia
Pacific
|
134
|
220
|
|
137
|
228
|
Kids Foot
Locker
|
688
|
1,175
|
|
716
|
1,220
|
Lady Foot
Locker
|
167
|
280
|
|
159
|
267
|
Champs
Sports
|
1,930
|
2,978
|
|
1,933
|
2,990
|
Footaction
|
786
|
1,309
|
|
804
|
1,343
|
Runners
Point
|
162
|
267
|
|
154
|
265
|
Sidestep
|
81
|
135
|
|
77
|
133
|
SIX:02
|
61
|
101
|
|
65
|
109
|
Total
|
7,634
|
13,118
|
|
7,667
|
13,201
|
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-2017-first-quarter-results-300460474.html
SOURCE Foot Locker, Inc.