Foot Locker Makes More Money with Fewer Stores
Foot Locker (NYSE: FL), an athletic product retailer, reported fiscal first quarter net income of $128 million this morning. This represented a 38% increase from net income of $94 million during the same quarter last year.
The company also posted first quarter sales of $1.578 billion, an increase of approximately 8.7% from the same quarter last year. This occurred while the company operated 60 fewer stores on April 28th this year compared to April 30th last year.
“2012 has gotten off to an outstanding start, with our first quarter results representing the highest level of quarterly earnings in the Company's history as an athletic business,” said Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker in a press release.
Most categories of Foot Locker stores saw decreases in number of stores between April 2011 and 2012, with the exception of CCS skate shops and Foot Locker International. This could be evidence of an increased focus on international consumers by Foot Locker. The number of CCS stores increased by approximately 83% to a total of 22, while the number of Foot Locker International stores increased around 4% to a total of 793.
Indicating that Foot Locker may be carrying fewer pairs of shoes as a result its decreased number of stores, the company carried leaner merchandise inventories of $1,146 million. This was 1.1% less than merchandise inventories at the end of the same period last year.
Foot Locker's earnings per share of 83 cents were almost 10 cents higher than what Wall Street analysts expected, on average.
As a result of its success this quarter and management predictions of further success, shares of Foot Locker traded as much as 10% higher today. Shares of competing athletic retailer Finish Line (NASDAQ: FINL) also traded higher after this news, rising around 8%.
Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.
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