- Prachi Singh |
Foot Locker’s net income for the company’s second quarter ended July 29, 2017 was 51 million dollars or 0.39 dollar per share, compared with 127 million dollars or 0.94 dollar per share in the same period of 2016. The company said, this result included a 50 million dollars pre-tax litigation charge related to the conversion of its pension plan in 1996. Excluding this charge, non-GAAP earnings were 0.62 dollar per share.
“Sales of some recent top styles fell well short of our expectations and impacted this quarter’s results. We believe these industry dynamics will persist through 2017, and we expect comparable sales to be down three to four percent over the remainder of the year,” said the company’s Richard Johnson, Chairman and CEO in a statement.
Q2 same-store sales decline 6 percent
The company’s comparable-store sales decreased 6.0 percent, while total sales decreased 4.4 percent, to 1,701 million dollars. Excluding the effect of foreign currency fluctuations, total sales for the second quarter decreased 4.3 percent. The company’s gross margin rate decreased to 29.6 percent of sales from 33 percent a year ago.
“We are obviously disappointed in the results for the quarter. In addition to working with our vendor partners to identify and capture new trends faster, we are also evaluating a realignment of our capital expenditure priorities and additional expense reductions so we can regain our momentum on both the top and bottom lines and deliver long-term value for our shareholders,” added Johnson.
During the second quarter, the company opened 24 new stores, remodeled or relocated 38 stores, and closed 19 stores. As of July 29, 2017, the Foot Locker operated 3,359 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 68 franchised Foot Locker stores were operating in the Middle East, as well as 14 franchised Runners Point stores in Germany.
First half net incomes drops to 231 mn dollars
Net income for the company’s first six months of the year decreased to 231 million dollars or 1.74 dollars per share on a GAAP basis, compared to 318 million dollars or 2.33 dollars per share, for the corresponding period in 2016. On a non-GAAP basis, earnings per share for the period were 1.97 dollars, a 15 percent decrease compared to the same period in 2016.
Year-to-date sales were 3,702 million dollars, a decrease of 1.7 percent compared to sales of 3,767 million dollars in the corresponding six-month period of 2016. Year-to-date, comparable store sales decreased 2.6 percent, while total year-to-date sales, excluding the effect of foreign currency fluctuations, decreased by 1.1 percent.