Foot Locker, Inc. Reports 2014 First Quarter Results

NEW YORK, May 23, 2014 /PRNewswire/ -- Foot Locker, Inc. FL, the New York-based specialty athletic retailer, today reported financial results for its first quarter ended May 3, 2014.

First Quarter Results

Net income for the Company's first quarter ended May 3, 2014 was $162 million, or $1.10 per share, compared with net income of $138 million, or $0.90 per share, last year.  First quarter comparable-store sales increased 7.6 percent. Total first quarter sales increased 14 percent, to $1,868 million this year, compared with sales of $1,638 million for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the first quarter increased 13.4 percent.

"We are off to a great start in 2014, with our first quarter results representing the highest quarterly sales and profits in our history as an athletic company --- for the third consecutive year," said Ken C. Hicks, Chairman of the Board and Chief Executive Officer.  "Every person in our company is playing an important role in producing our current strong performance, bringing passion, energy, and excellence to the execution of our strategies and initiatives as we work towards the achievement of our long-term financial and operational objectives."

The Company's gross margin rate improved to 34.6 percent of sales from 34.2 percent a year ago, while the rate of selling, general, and administrative expenses improved to 19.0 percent of sales from 19.2 percent.    

"The Company executed its operating plans effectively and efficiently in the first quarter," said Lauren B. Peters, Executive Vice President and Chief Financial Officer.  "We delivered results in line with or better than our expectations on just about every financial and operational metric, and we continue to test and develop opportunities we believe can improve our performance even further in the future."

Non-GAAP Adjustments

During the first quarter, the Company incurred approximately $2 million of expenses related to the impairment of a trade name and Runners Point Group integration costs.  Excluding these items, first quarter earnings were $1.11 per share on a non-GAAP basis, an increase of 22 percent over the record $0.91 that the Company earned in the first quarter last year after adjusting for Runners Point Group acquisition costs.  A reconciliation of GAAP to non-GAAP results is provided in the table below.

Financial Position

At May 3, 2014, the Company's merchandise inventory was $1,268 million, 8.5 percent higher than at the end of the first quarter last year.  Excluding Runners Point Group and using constant currencies, inventory increased 3.2 percent.   The Company's cash and short-term investments totaled $1,007 million, while the debt on its balance sheet was $138 million.

The Company spent approximately $70 million to repurchase 1.53 million shares during the quarter.

Store Base Update

During the first quarter, the Company opened 27 new stores, remodeled/relocated 49 stores and closed 36 stores. As of May 3, 2014, the Company operated 3,464 stores in 23 countries in North America, Europe, Australia, and New Zealand.  In addition, 47 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 27 franchised Runners Point and Sidestep stores in Germany and Switzerland. 

The Company is hosting a live conference call at 9:00 a.m. (EDT) today, May 23, 2014, 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 888-771-4371 (U.S. and Canada) or 847-585-4405 (International) using the passcode 37245713, 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 June 6, 2014.

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, 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 2013 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.

 

 

 

 

 

 

Contact: John A. Maurer
Vice President,
Treasurer and Investor Relations
Foot Locker, Inc.
(212) 720-4092

SOURCE Foot Locker, Inc.