Foot Locker back on track in Q3
Foot Locker reported stronger-than-expected third quarter earnings amid rising same-store sales.
The athletic shoe and accessories retailer reported that its net income fell to $125 million, or $1.16 a share, from $130 million, in the quarter ended Nov. 2, or $1.14 a share, in the year-ago period. Adjusted earnings per share came to $1.13, above analysts’ estimates of $1.08. (Foot Locker missed analysts’ earnings expectations for the previous two quarters.)
Net sales rose 3.9% to $1.93 billion from $1.86 billion, just missing estimates of $1.94 billion. Same-store sales increased 5.7% better than expected.
Gross margin increased to 32.1% from 31.6%, and inventories slipped 0.1% to $1.30 billion.
Foot Locker’s ongoing series of investments in innovative, digital-first and start-up companies continued in the quarter. In September, the company made a $3 million strategic investment in NTWRK, a youth-oriented e-commerce and content platform that offers live video shopping and programming via its mobile app or web store. Also in September, the company announced the launch of an innovation and incubation initiative, called Greenhouse, help fuel emerging brands.
“We are pleased with our performance in the quarter, which reflects the success of our strategic focus on building even deeper connections with our customers and further strengthening relationships with our vendors," said Richard Johnson, chairman and CEO. "Across the company, we are making great strides in implementing our four strategic imperatives, which are designed to ensure we are best positioned to compete in the retail marketplace by inspiring and empowering youth culture while also strengthening our bottom line and driving value for our shareholders.”
During the third quarter, the retailer opened 11 new stores, remodeled or relocated 34 stores, and closed 25 stores. As of November 2, Foot Locker operated 3,160 stores in 27 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 128 franchised Foot Locker stores were operating in the Middle East, as well as 10 franchised Runners Point stores in Germany.