Foot Locker, Inc. Reports Third Quarter Results
NEW YORK, Nov. 16, 2012 /PRNewswire/ -- Foot Locker,
Inc. (NYSE: FL), the New
York-based specialty athletic retailer, today reported
financial results for its third quarter ended October 27, 2012.
Third Quarter Results
Net income for the
Company's third quarter ended October 27,
2012 was $106 million, or
$0.69 per share, compared with net
income last year of $66 million, or
$0.43 per share. Third quarter sales
increased 9.3 percent, to $1,524
million this year, compared with sales of $1,394 million for the corresponding prior-year
period. Third quarter comparable-store sales increased 10.2
percent, which consisted of a 9.4 percent increase in store sales
and an 18.3 percent increase in direct-to-customer sales.
Excluding the effect of foreign currency fluctuations, total sales
for the third quarter increased 11.0 percent.
Year-to-Date Results
Net income for the
Company's first nine months of the year increased 48.7 percent to
$293 million, or $1.90 per share, compared with net income of
$197 million, or $1.27 per share, for the corresponding period
last year. Year-to-date sales increased 8.4 percent, to
$4,469 million, compared with sales
of $4,121 million last year.
Year-to-date comparable-store sales increased 9.9 percent.
Excluding the effect of foreign currency fluctuations, total sales
year-to-date increased 10.4 percent.
"Our team put together another outstanding quarter, delivering a
double digit sales gain and controlling expenses to drive our
bottom line earnings to new heights," said Ken C. Hicks, Chairman and Chief Executive
Officer. "The ongoing focus of all of our associates on the
strategies and initiatives we updated at the beginning of the year
continues to enhance the productivity of our key assets.
Inventory turns are improving; sales per square foot are
increasing; and by investing in our people and giving them the best
tools to succeed with the customer, our associates are becoming
even more productive, too."
Non-GAAP Adjustment
Included in the Company's
third quarter and year-to-date results is a tax benefit of
$9 million, or $0.06 per share. This benefit is the result
of a settlement of a foreign tax audit, resulting in a reduction of
tax reserves established in prior periods. On a non-GAAP
basis, Foot Locker's third quarter earnings were $0.63 per share. A reconciliation of GAAP
to non-GAAP results for the third quarter of 2012 is provided in
the table below.
Financial Position
At October 27, 2012, the Company's merchandise
inventory was $1,240 million, 3.0
percent higher than at the end of the third quarter last
year. The Company's cash and short-term investments totaled
$853 million, while the debt on its
balance sheet was $133 million.
The Company's total cash position, net of debt, was $158 million higher than the same time last
year.
During the third quarter of 2012, the Company repurchased
approximately 841 thousand shares of its common stock for
$29.7 million. Year-to-date,
the Company has repurchased just under 3 million shares of its
common stock for $94.3 million under
the Company's $400 million share
repurchase program.
Store Base Update
During the first nine months of the year, the Company opened 70 new
stores, remodeled/relocated 159 stores and closed 72 stores.
At October 27, 2012, the Company
operated 3,367 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition,
40 franchised stores were operating in the Middle East and South Korea.
The Company is hosting a live conference call at 9:00 a.m. (EST) today, November 16, 2012, to discuss these results and
provide comments on the current business environment and
trends. This conference call may be accessed live by dialing
888-446-3850 (U.S. and Canada) or
630-691-2739 (International) using the passcode 33645015, 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 November 30, 2012.
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,
further deterioration of global financial markets, economic
conditions worldwide, further 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. 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 October 27, 2012 and October 29, 2011
(In
millions, except per share amounts)
|
|
|
Third
Quarter 2012
|
|
Third
Quarter 2011
|
|
|
YTD
2012
|
|
|
YTD
2011
|
|
|
Sales
|
|
$
|
1,524
|
|
$
|
1,394
|
|
|
$
|
4,469
|
|
|
$
|
4,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
1,019
|
|
|
941
|
|
|
|
2,999
|
|
|
|
2,805
|
|
|
SG&A
|
|
|
319
|
|
|
320
|
|
|
|
931
|
|
|
|
919
|
|
|
Depreciation and amortization
|
|
|
30
|
|
|
27
|
|
|
|
88
|
|
|
|
82
|
|
|
Other
income
|
|
|
-
|
|
|
-
|
|
|
|
(1)
|
|
|
|
(1)
|
|
|
Interest
expense, net
|
|
|
1
|
|
|
1
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
|
1,369
|
|
|
1,289
|
|
|
|
4,020
|
|
|
|
3,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before taxes
|
|
$
|
155
|
|
$
|
105
|
|
|
$
|
449
|
|
|
$
|
312
|
|
|
Income tax
expense (1)
|
|
|
49
|
|
|
39
|
|
|
|
156
|
|
|
|
115
|
|
|
Net
income
|
|
$
|
106
|
|
$
|
66
|
|
|
$
|
293
|
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$
|
0.69
|
|
$
|
0.43
|
|
|
$
|
1.90
|
|
|
$
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average diluted shares
outstanding
|
|
|
153.9
|
|
|
153.6
|
|
|
|
154.0
|
|
|
|
154.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2012
|
|
Third
Quarter 2011
|
|
|
YTD
2012
|
|
|
YTD
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non
GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclude
tax benefit (1)
|
|
$
|
9
|
|
$
|
-
|
|
|
$
|
10
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non GAAP
Net Income
|
|
$
|
97
|
|
$
|
66
|
|
|
$
|
283
|
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non GAAP
Diluted EPS
|
|
$
|
0.63
|
|
$
|
0.43
|
|
|
$
|
1.83
|
|
|
$
|
1.27
|
|
|
Footnote to explain adjustments
|
(1)
Included in the third quarter of 2012 is a tax benefit of $9
million, or $0.06 per diluted share. This benefit is the result of
a settlement of a foreign tax audit, which resulted in a reduction
of tax reserves established in prior periods. 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)
|
|
October
27,
2012
|
|
October
29,
2011
|
Assets
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash, cash
equivalents and short-term investments
|
$
853
|
|
$
698
|
Merchandise inventories
|
1,240
|
|
1,204
|
Other
current assets
|
202
|
|
157
|
|
2,295
|
|
2,059
|
|
|
|
|
Property
and equipment, net
|
462
|
|
421
|
Deferred
tax assets
|
285
|
|
295
|
Other
assets
|
257
|
|
270
|
|
$
3,299
|
|
$
3,045
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
327
|
|
$
284
|
Accrued
and other liabilities
|
298
|
|
284
|
|
625
|
|
568
|
|
|
|
|
Long-term
debt and obligations under capital leases
|
133
|
|
136
|
Other
liabilities
|
252
|
|
248
|
SHAREHOLDERS' EQUITY
|
2,289
|
|
2,093
|
|
$
3,299
|
|
$
3,045
|
|
FOOT
LOCKER, INC.
Store
and Estimated Square Footage
(unaudited)
(Square
footage in thousands)
|
|
October
27,
2012
|
October
29,
2011
|
October
30,
2010
|
Foot
Locker U.S.
|
|
|
|
Number of stores
|
1,090
|
1,129
|
1,152
|
Gross square footage
|
4,378
|
4,549
|
4,633
|
Selling square footage
|
2,558
|
2,689
|
2,744
|
|
|
|
|
Footaction
|
|
|
|
Number of stores
|
287
|
299
|
312
|
Gross square footage
|
1,329
|
1,380
|
1,439
|
Selling square footage
|
832
|
864
|
904
|
|
|
|
|
Lady
Foot Locker
|
|
|
|
Number of stores
|
319
|
347
|
399
|
Gross square footage
|
711
|
773
|
882
|
Selling square footage
|
411
|
447
|
506
|
|
|
|
|
Kids
Foot Locker
|
|
|
|
Number of stores
|
295
|
292
|
302
|
Gross square footage
|
709
|
699
|
724
|
Selling square footage
|
412
|
407
|
421
|
|
|
|
|
Champs
Sports
|
|
|
|
Number of stores
|
540
|
537
|
547
|
Gross square footage
|
2,870
|
2,857
|
2,919
|
Selling square footage
|
1,882
|
1,872
|
1,938
|
|
|
|
|
CCS
|
|
|
|
Number of stores
|
22
|
22
|
12
|
Gross square footage
|
51
|
54
|
31
|
Selling square footage
|
34
|
36
|
20
|
Foot
Locker International
|
|
|
|
Number of stores
|
814
|
776
|
750
|
Gross square footage
|
2,372
|
2,262
|
2,168
|
Selling square footage
|
1,197
|
1,145
|
1,099
|
|
|
|
|
Total
Stores Operated
|
|
|
|
Number of stores
|
3,367
|
3,402
|
3,474
|
Gross square footage
|
12,420
|
12,574
|
12,796
|
Selling square footage
|
7,326
|
7,460
|
7,632
|
|
|
|
|
Total
Franchised Stores
|
|
|
|
Number of stores
|
40
|
32
|
24
|
Gross square footage
|
91
|
81
|
87
|
Selling square footage
|
62
|
56
|
57
|
SOURCE Foot Locker, Inc.