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Foot Locker Q3 earnings improve 20 percent

Business REPORT

Foot Locker Q3 earnings improve 20 percent

By Prachi Singh

Nov 23, 2015

Net income of Foot Locker in third quarter ended October 31, 2015 was 80 million dollars, or 0.57 dollar per share. Excluding pre-tax litigation charge, which reduced after-tax earnings by 43 cents per share, non-GAAP earnings were one dollar per share, a 20 percent increase over the 83 cents per share the company earned in the same period last year on a comparable basis.

“This quarter, in fact this entire year, has offered a perfect illustration of how building diversity into our business has helped us sustain record-setting growth over multiple quarters and years,” said Richard Johnson, President and Chief Executive Officer, adding, “We have built strength across different banners and channels; we have a global footprint; we have excellent momentum in men’s, women’s, and kids’; and we have multiple legs to our product category stool, with leadership positions in basketball, running, and classic sneakers.”

Q3 and year-to-date highlights

Third quarter comparable-store sales increased 8.7 percent and total sales increased 3.6 percent, to 1,794 million dollars this year, compared with sales of 1,731 million dollars for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the third quarter increased 8.9 percent. The Company’s gross margin rate improved to 33.8 percent of sales from 33.2 percent a year ago.

Net income for the company’s first nine months of the year increased to 383 million dollars, or 2.71 dollars per share, compared to net income of 374 million dollars, or 2.55 dollars per share, for the corresponding period in 2014. Excluding the litigation charge noted above, earnings per share totalled 3.14 dollars, a 22 percent increase over the same period last year. Year-to-date sales were 5,405 million dollars, an increase of 3.1 percent compared to sales of 5,240 million dollars in the corresponding nine-month period of 2014. Comparable store sales increased 8.7 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 8.9 percent.

During the third quarter, the company opened 30 new stores, remodelled or relocated 48 stores, and closed 16 stores. As of October 31, 2015, it operated 3,432 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 48 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 16 franchised Runners Point stores in Germany.