Foot Locker, Inc. Reports Second Quarter Results
NEW YORK, Aug. 18, 2011 /PRNewswire/ — Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended July 30, 2011.
Second Quarter Results
Net income for the Company’s second quarter ended July 30, 2011 was $37 million, or $0.24 per share, compared with net income of $6 million, or $0.04 per share, last year. Second quarter sales increased 16.3 percent, to $1,275 million this year, compared with sales of $1,096 million for the corresponding prior-year period. Second quarter comparable-store sales increased 11.8 percent. Excluding the effect of foreign currency fluctuations, total sales for the second quarter increased 11.7 percent.
“Our associates worldwide are doing an excellent job executing the initiatives of our strategic plan,” said Ken C. Hicks, Chairman and Chief Executive Officer of Foot Locker, Inc. “As a result, we were able to deliver strong sales and profit results in the second quarter, including a comparable store sales gain of 11.8 percent and earnings of 24 cents per share. In addition to the outstanding second quarter results, I am also pleased to be reporting our sixth consecutive quarter of sales and profit growth, versus the comparable prior-year periods. The results over this longer time period encourage us to believe that we have the right strategies in place to create shareholder value on a sustained basis.”
Year-to-Date Results
Net income for the Company’s first six months of the year increased 121 percent to $131 million, or $0.84 per share, compared with net income of $60 million, or $0.38 per share, for the corresponding period last year. Year-to-date sales increased 14.7 percent, to $2,727 million, compared with sales of $2,377 million last year. Year-to-date comparable-store sales increased 12.3 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 11.9 percent.
Financial Position
The Company’s merchandise inventory at the end of the second quarter was $1,269 million, or 4.1 percent, higher than at the end of the second quarter last year.
During the second quarter of 2011, the Company repurchased approximately 1.3 million shares of its common stock for $29 million under the Company’s $250 million share repurchase program. Year-to-date, the Company has repurchased approximately 2.8 million shares of its common stock for $59 million.
At July 30, 2011, the Company’s cash and short-term investments totaled $681 million, while the debt on its balance sheet was $136 million. The Company’s total cash position, net of debt, was $163 million higher than the same time last year.
Store Base Update
During the first six months of the year, the Company opened 35 new stores, remodeled/relocated 95 stores and closed 54 stores. At July 30, 2011, the Company operated 3,407 stores in 22 countries in North America, Europe, Australia, and New Zealand. In addition, 25 franchised stores were operating in the Middle East and South Korea.
The Company is hosting a live conference call at 9:00 a.m. (ET) on Friday, August 19, 2011 to discuss these results and provide comments on the current business environment and trends. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 p.m. on Friday, August 26, 2011.
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), pandemics and similar major health concerns, unseasonable weather, further deterioration of global financial markets, economic conditions worldwide, further 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 foreign global sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution. 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, 2011 and July 31, 2010
(In millions, except per share amounts)
Second Second
Quarter Quarter
------- -------
2011 2010
---- ----
Sales $1,275 $1,096
Cost of sales 887 791
Selling, general and administrative
expenses 301 268
Depreciation and amortization 28 26
Interest expense, net 1 2
Other income --- (1)
1,217 1,086
----- -----
Income before income taxes 58 10
Income tax expense 21 4
--- ---
Net Income $37 $6
=== ===
Diluted EPS:
------------
Net Income $0.24 $0.04
===== =====
Weighted-average diluted shares outstanding
155.2 156.9
----- -----
Year-To-Date Year-To-Date
------------ ------------
2011 2010
---- ----
Sales $2,727 $2,377
Cost of sales 1,864 1,679
Selling, general and administrative
expenses 599 548
Depreciation and amortization 55 52
Interest expense, net 3 5
Other income (1) (1)
--- ---
2,520 2,283
----- -----
Income before income taxes 207 94
Income tax expense 76 34
--- ---
Net Income $131 $60
==== ===
Diluted EPS:
------------
Net Income $0.84 $0.38
===== =====
Weighted-average diluted shares
outstanding 155.4 157.1
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FOOT LOCKER, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(In millions)
July 30, July 31,
-------- --------
2011 2010
---- ----
Assets
CURRENT ASSETS
Cash, cash equivalents and short-term
investments $681 $519
Merchandise inventories 1,269 1,219
Other current assets 189 161
2,139 1,899
Property and equipment, net 408 376
Deferred tax assets 298 351
Other assets 274 287
--- ---
$3,119 $2,913
====== ======
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable $365 $345
Accrued and other liabilities 255 236
620 581
Long-term debt and obligations under
capital leases 136 137
Other liabilities 248 279
SHAREHOLDERS' EQUITY 2,115 1,916
----- -----
$3,119 $2,913
====== ======
FOOT LOCKER, INC.
Store and Estimated Square Footage
(unaudited)
(Square footage in thousands)
July 30, July 31, August 1,
-------- -------- ---------
2011 2010 2009
---- ---- ----
Foot Locker U.S.
Number of stores 1,136 1,155 1,211
Gross square footage 4,572 4,658 4,898
Selling square footage 2,702 2,759 2,901
Footaction
Number of stores 304 313 327
Gross square footage 1,400 1,442 1,522
Selling square footage 878 906 951
Lady Foot Locker
Number of stores 353 400 469
Gross square footage 785 883 1,034
Selling square footage 454 506 592
Kids Foot Locker
Number of stores 291 304 304
Gross square footage 697 728 724
Selling square footage 406 426 425
Champs Sports
Number of stores 536 548 565
Gross square footage 2,861 2,923 3,018
Selling square footage 1,899 1,940 2,005
CCS
Number of stores 16 12 2
Gross square footage 40 31 6
Selling square footage 26 20 4
Foot Locker International
Number of stores 771 744 737
Gross square footage 2,236 2,147 2,145
Selling square footage 1,140 1,091 1,093
Total Stores Operated
Number of stores 3,407 3,476 3,615
Gross square footage 12,591 12,812 13,347
Selling square footage 7,505 7,648 7,971
Total Franchised Stores
Number of stores 25 20 19
Gross square footage 82 78 80
Selling square footage 55 50 53
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SOURCE Foot Locker, Inc.
