2014

Foot Locker, Inc. Reports Second Quarter Results -- Net Income of $66 Million, or $0.44 Per Share

-- Non-GAAP EPS of $0.46, a 21 Percent Increase

-- Comparable-Store Sales Increased 1.8 Percent

NEW YORK, Aug. 23, 2013 /PRNewswire/ -- Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended August 3, 2013.

Second Quarter Results
Net income for the Company's second quarter ended August 3, 2013 was $66 million, or $0.44 per share, compared with net income of $59 million, or $0.39 per share, last year, an increase in earnings per share of 13 percent.  

Second quarter comparable-store sales increased 1.8 percent. Total second quarter sales increased 6.4 percent, to $1,454 million this year, compared with sales of $1,367 million for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the second quarter increased 5.9 percent.  Total second quarter sales results include one month of Runners Point Group's operations.

Year-To-Date Results
Net income for the Company's first six months of the year increased to $204 million, or $1.34 per share, compared to net income of $187 million, or $1.21 per share, for the corresponding period in 2012.   Earnings per share for the six month period have increased 11 percent compared to the same period in 2012.   Year-to-date sales were $3,092 million, an increase of 5 percent compared to sales of $2,945 million in the corresponding six month period of 2012.   Year-to-date comparable store sales increased 3.5 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 4.9 percent

Non-GAAP Adjustment
During the second quarter, the Company incurred approximately $5 million, pre-tax, in costs related to the acquisition of Runners Point Group and the closing of the CCS Retail stores. Excluding these expenses, second quarter earnings were $0.46 per share on a non-GAAP basis, an increase of 21 percent compared to the $0.38 that the Company earned in the second quarter last year.   For the first six months of 2013, non-GAAP net income was $1.37 per share, an increase of 14 percent over the $1.20 per share earned in the corresponding period of 2012.

"Sales in the second quarter were more challenging than we planned for, especially in the United States.  Despite this headwind, we produced second quarter ongoing profit and sales results that were our best ever as Foot Locker, Inc., demonstrating that the execution of our strategic priorities continues to deliver solid financial and operational results for our shareholders and other stakeholders" said Ken C. Hicks, Chairman of the Board and Chief Executive Officer.  "We remain confident that we can achieve a mid-single digit comparable sales gain and a double digit percentage profit increase for fiscal 2013, as we build momentum in our operational and financial performance now and over the long term."

Financial Position
At August 3, 2013, the Company's merchandise inventory was $1,306 million, 6 percent higher than at the end of the second quarter last year. Excluding Runners Point Group, inventory increased approximately 3 percent. 

During the second quarter, the Company repurchased approximately 2.83 million shares of its common stock for $100 million

The Company's cash, cash equivalents, and short-term investments totaled $836 million, while the debt on its balance sheet was $141 million. The Company's total cash position, net of debt, was $8 million higher than at the same time last year.

Store Base Update
During the second quarter, the Company opened 24 new stores, remodeled/relocated 89 stores and closed 44 stores. With the addition of 194 stores acquired in the Runners Point Group transaction, the Company operated 3,495 stores in 23 countries in North America, Europe, Australia, and New Zealand as of August 3, 2013.  In addition, 45 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 24 Runners Point and Sidestep franchised stores, which were added as part of the RPG acquisition.  

The Company is hosting a live conference call at 9:00 a.m. (EDT) today, August 23, 2013, to discuss these results and 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 888-446-3850 (U.S. and Canada) or 630-691-2739 (International) using the passcode 35433909, 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 September 6, 2013. 

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 2012 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


 

 


FOOT LOCKER, INC.
Condensed Consolidated Statements of Operations
(unaudited)
Periods ended August 3, 2013 and July 28, 2012
(In millions, except per share amounts)






Second Quarter
2013


Second Quarter
2012



 

 

YTD 2013



 

 

YTD 2012



Sales


$

1,454


$

1,367



$

3,092



$

2,945




















Cost of sales



1,001



939




2,078




1,980



SG&A



314



306




629




612



Depreciation and amortization



31



29




62




58



Other Charges



2



-




2




-



Interest expense, net



1



1




2




2



Other Income



(1)



(1)




(3)




(1)






1,348



1,274




2,770




2,651




















Income before taxes


$

106


$

93



$

322



$

294



Income tax expense



40



34




118




107



Net income


$

66


$

59



$

204



$

187




















Diluted EPS


$

0.44


$

0.39



$

1.34



$

1.21




















Weighted-average diluted shares outstanding



 

151.4



 

153.9




 

152.1




 

154.1







































Second Quarter
2013


Second Quarter
2012



 

 

YTD 2013



 

 

YTD 2012




















Non GAAP Results


































RPG Acquisition Costs (1)


$

2


$

-



$

3



$

-




















CCS Exit Costs


$

1


$

-



$

1



$

-




















Tax Rate Change (2)


$

-


$

(1)



$

-



$

(1)




















Non GAAP Net Income


$

69


$

58



$

208



$

186




















Non GAAP Diluted EPS


$

0.46


$

0.38



$

1.37



$

1.20



 

Footnote to explain adjustments



(1)

Integration and transaction costs associated with the acquisition of Runners Point Group.

(2)

In the second quarter of 2012, the Company recorded a benefit of $1 million, or $0.01 per diluted share, to reflect the repeal of the last two stages of certain Canadian provincial tax rate changes.



FOOT LOCKER, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(In millions)




August 3,

2013


July 28,

2012

Assets








CURRENT ASSETS




Cash, cash equivalents and short-term investments

$        836


$        820

Merchandise inventories

1,306


1,231

Other current assets

243


199


2,385


2,250





Property and equipment, net

552


447

Deferred tax assets

265


284

Other assets

309


253


$     3,511


$     3,234





Liabilities and Shareholders' Equity








CURRENT LIABILITIES




Accounts payable

$       418


$       391

Accrued and other liabilities

314


278


732


669





Long-term debt and obligations under capital leases

138


133

Other liabilities

215


253

SHAREHOLDERS' EQUITY

2,426


2,179


$    3,511


$    3,234


 


FOOT LOCKER, INC.
Store and Estimated Square Footage
(unaudited)
(Square footage in thousands)




August 3,

2013

February 2,

2013

July 28,

 2012

Foot Locker U.S.




   Number of stores

1,059

1,072

1,092

   Gross square footage

4,314

4,311

4,380

   Selling square footage

2,506

2,515

2,563





Footaction




   Number of stores

280

283

287

   Gross square footage

1,291

1,299

1,329

   Selling square footage

812

817

832





Lady Foot Locker




   Number of stores

277

303

320

   Gross square footage

634

685

714

   Selling square footage

371

398

412





Kids Foot Locker




   Number of stores

325

305

297

   Gross square footage

793

727

707

   Selling square footage

458

421

411





Champs Sports




   Number of stores

541

539

539

   Gross square footage

2,868

2,861

2,866

   Selling square footage

1,884

1,876

1,881





CCS




   Number of stores

0

22

22

   Gross square footage

0

51

51

   Selling square footage

0

34

34

 

International Stores




   Number of stores

1,013

811

797

   Gross square footage

2,801

2,382

2,327

   Selling square footage

1,431

1,200

1,175





Total Stores Operated




   Number of stores

3,495

3,335

3,354

   Gross square footage

12,701

12,316

12,374

   Selling square footage

7,462

7,261

7,308





Total Franchised Stores




   Number of stores

69

42

37

   Gross square footage

139

96

88

   Selling square footage

94

65

60

SOURCE Foot Locker, Inc.



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http://www.footlocker-inc.com

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