Foot Locker Q2 earnings, comp sales top Street; reinstates dividend

Foot Locker reported a big jump in same-store sales and better-than-expected earnings as it works to get back on track following pandemic-mandated store closures.

"Despite the challenging backdrop of the pandemic, and social unrest, we achieved strong second-quarter results, led by our digital business, with a return to growth in both the top and bottom line,” said CEO Richard Johnson. “As our global fleet of stores reopened, our customers responded with enthusiasm and energy to our assortments and visited our stores with a high intent to purchase."

The athletic footwear and apparel retailer reported that its net income fell to $45 million, or $0.43 a share, in the quarter ended Aug.1, from $60 million, or $0. 55 a share, in the year-ago period. Adjusted earnings per share came to $0. 71, above analysts’ estimates of $0.69.

Total sales rose 17.1% to $2.08 billion, in line with estimates. Same-store sales jumped 18.6%.

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Citing its “strong liquidity position and more stable cash outlook,” Foot Locker said it reinstated its dividend at a “cautious but meaningful level.” It will pay a 15 cents per share dividend for the quarter.

"We delivered a meaningful increase in sales, managed our expenses tightly, and made progress towards our goal of improving our inventory position," said CFO Lauren Peters. "Looking ahead, we believe the company is well-positioned financially to maneuver through the evolving COVID-19 pandemic."

During the second quarter, the company opened 18 new stores, remodeled or relocated 26 stores, and closed 31 stores. As of Aug. 1, Foot Locker operated 3,100 stores in 27 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 134 franchised Foot Locker stores were operating in the Middle East, as well as four franchised Runners Point stores in Germany.

In a separate filing, Foot Locker announced that company executive salaries, which had been reduced starting in spring as part of its COVID-19-related cost-saving effort, would be restored on Sept. 1 due to the company's performance.