Foot Locker, Inc. Reports Third Quarter Results -- Net Income of $104 Million, or $0.70 Per Share

-- Non-GAAP EPS of $0.68, an 8 Percent Increase

-- Comparable-Store Sales Increased 4.1 Percent

NEW YORK, Nov. 22, 2013 /PRNewswire/ -- Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its third quarter ended November 2, 2013.

Third Quarter Results
Net income for the Company's third quarter ended November 2, 2013 was $104 million, or $0.70 per share, compared with net income of $106 million, or $0.69 per share, last year.

Third quarter comparable-store sales increased 4.1 percent. Total third quarter sales increased 6.4 percent, to $1,622 million this year, compared with sales of $1,524 million for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations and Runners Point Group, total sales increased 1.3 percent.

Year-To-Date Results
Net income for the Company's first nine months of the year increased to $308 million, or $2.04 per share, compared to net income of $293 million, or $1.90 per share, for the corresponding period in 2012.   Earnings per share for the nine month period have increased 7.4 percent compared to the same period in 2012.  Year-to-date sales were $4,714 million, an increase of 5.5 percent compared to sales of $4,469 million in the corresponding nine month period of 2012.  Year-to-date comparable store sales increased 3.7 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 5.3 percent.

"It took a strong team effort to produce the solid top and bottom line results that we are reporting this morning," said Ken C. Hicks, Chairman of the Board and Chief Executive Officer.  "We have many strategies underway to drive our business, and the advances we have achieved are contributing to the current momentum we have towards reaching our long-range operational and financial goals.

"Most exciting for me, however, is that while we still have much progress to make on our existing initiatives, the team at Foot Locker, Inc. is continuing to identify new opportunities and develop ideas further in order to leverage our strengths and build an even stronger business.  Some of these ideas deliver immediate impact, some will help improve results in the next several quarters, and yet others have the potential to drive our performance over the longer term."

Non-GAAP Adjustment
During the third quarter, the Company incurred approximately $1 million, after tax, in costs related to the integration of Runners Point Group, and recorded a tax benefit of $3 million, or $0.02 per share, resulting from the conclusion of a foreign tax audit which enabled a reduction of tax reserves established in prior periods.  Excluding these adjustments, third quarter earnings were $0.68 per share on a non-GAAP basis, an increase of 8 percent compared to the $0.63 that the Company earned on a non-GAAP basis in the third quarter last year.  The period last year included a similar tax benefit of $9 million, or $0.06 per share.

For the first nine months of 2013, non-GAAP net income was $310 million, a 10 percent increase over net income in the corresponding period last year.  This net income represents $2.05 per share, an increase of 12 percent over the $1.83 per share earned in the corresponding period of 2012.

A reconciliation of GAAP to non-GAAP results is provided in the table below.

Financial Position
At November 2, 2013, the Company's merchandise inventory was $1,316 million, 6 percent higher than at the end of the third quarter last year. Expressed in constant currencies and excluding Runners Point Group, inventory increased approximately 1.2 percent.

During the third quarter, the Company repurchased approximately 2 million shares of its common stock for $67 million, bringing the 2013 year-to-date repurchase activity to 4.85 million shares for $167 million

The Company's cash, cash equivalents, and short-term investments totaled $796 million, while the debt on its balance sheet was $140 million.  The Company's total cash position, net of debt, was $64 million lower than at the same time last year.

Store Base Update
During the third quarter, the Company opened 28 new stores, remodeled or relocated 118 stores, and closed 13 stores. The Company operated 3,510 stores in 23 countries in North America, Europe, Australia, and New Zealand as of November 2, 2013.  In addition, 45 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. (EST) today 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 36067023, 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.  An archived replay of the conference call can be accessed approximately one hour following the end of the call at 888-843-7419 with the passcode 36067023#, through December 6, 2013.  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

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 November 2, 2013 and October 27, 2012

(In millions, except per share amounts)






Third

Quarter

2013


Third

Quarter

2012



 

 

YTD 2013



 

 

YTD 2012



Sales


$

1,622


$

1,524



$

4,714



$

4,469




















Cost of sales



1,085



1,019




3,163




2,999



SG&A



340



319




969




931



Depreciation and amortization



35



30




97




88



Other charges



-



-




2




-



Interest expense, net



2



1




4




3



Other income



-



-




(3)




(1)






1,462



1,369




4,232




4,020




















Income before taxes


$

160


$

155



$

482



$

449



Income tax expense



56



49




174




156



Net income


$

104


$

106



$

308



$

293




















Diluted EPS


$

0.70


$

0.69



$

2.04



$

1.90




















Weighted-average diluted shares

outstanding



 

149.5



 

153.9




 

151.2




 

154.0







































Third

Quarter

2013


Third

Quarter

2012



 

 

YTD 2013



 

 

YTD 2012




















 

Non- GAAP Results


































RPG acquisition/integration costs (1)


$

1


$

-



$

4



$

-




















CCS store closure costs


$

-


$

-



$

1



$

-




















Tax items (2)


$

(3)


$

(9)



$

(3)



$

(10)




















Net income, non-GAAP


$

102


$

97



$

310



$

283




















Diluted EPS, non-GAAP


$

0.68


$

0.63



$

2.05



$

1.83





Footnote to explain adjustments


      (1)  Integration and transaction costs associated with the acquisition of Runners Point Group, after tax.    

      (2)  In the third quarter of 2013, the Company recorded a tax benefit of $3 million, or $0.02 per diluted share,

             related to the conclusion of a foreign tax audit that resulted in a reduction of tax reserves established

             in prior periods. Included in the third quarter of 2012 is a similar tax benefit of $9 million, or $0.06 per

             diluted share. Also included in the 2012 year-to-date results is a benefit of $1 million, or $0.01 per

             diluted share, which represented Canadian provincial tax rate changes.


 

FOOT LOCKER, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(In millions)





November 2,

2013


October 27,

2012

Assets








CURRENT ASSETS




Cash, cash equivalents and short-term investments       

$        796


$        853

Merchandise inventories

1,316


1,240

Other current assets

208


202


2,320


2,295





Property and equipment, net

589


462

Deferred tax assets

257


285

Other assets

311


257


$     3,477


$     3,299





Liabilities and Shareholders' Equity








CURRENT LIABILITIES




Accounts payable

$       310


$       327

Accrued and other liabilities

330


298

Current portion of capital lease obligations

3


-


643


625





Long-term debt and obligations under capital leases

137


133

Other liabilities

231


252

SHAREHOLDERS' EQUITY

2,466


2,289


$    3,477


$    3,299


 





FOOT LOCKER, INC.




Store and Estimated Square Footage




(unaudited)




(Square footage in thousands)

















November 2,

2013

February 2,

2013

October 27,

 2012

Foot Locker U.S.




   Number of stores

1,056

1,072

1,090

   Gross square footage

4,321

4,311

4,378

   Selling square footage      

2,507

2,515

2,558





Footaction




   Number of stores

280

283

287

   Gross square footage

1,295

1,299

1,329

   Selling square footage

816

817

832





Lady Foot Locker




   Number of stores

278

303

319

   Gross square footage

636

685

711

   Selling square footage

374

398

411





Kids Foot Locker




   Number of stores

334

305

302

   Gross square footage

818

729

722

   Selling square footage

473

422

418





Champs Sports




   Number of stores

543

539

540

   Gross square footage

2,887

2,861

2,870

   Selling square footage

1,896

1,876

1,882





CCS




   Number of stores

0

22

22

   Gross square footage

0

51

51

   Selling square footage

0

34

34

 

International Stores




   Number of stores

1,019

811

807

   Gross square footage

2,804

2,380

2,359

   Selling square footage

1,442

1,199

1,191





Total Stores Operated




   Number of stores

3,510

3,335

3,367

   Gross square footage

12,761

12,316

12,420

   Selling square footage

7,508

7,261

7,326





Total Franchised Stores




   Number of stores

72

42

40

   Gross square footage

142

96

91

   Selling square footage

96

65

62

 

SOURCE Foot Locker, Inc.



RELATED LINKS
http://www.footlocker-inc.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.