Market Overview

Foot Locker, Inc. Reports 2017 First Quarter Results

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- Generated First Quarter Net Income of $180 Million, or $1.36 Per Share

- First Quarter Comparable-Store Sales Increased 0.5 Percent

- March and April Comparable-Store Sales Up High-Single Digits

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.

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