Foot Locker sales up; to move HQ to Florida, open Dallas tech hub
More changes are afoot at Foot Locker, from moving its headquarters to shuttering stores and streamlining operations in some international markets.
In reporting its second-quarter results, the athletic shoe and apparel retailer disclosed a number of changes as part of its “Lace Up Plan” to boost growth. The changes include relocating its headquarters from New York City to St. Petersburg, Fla. in 2025. (Foot Locker plans to maintain only a “limited presence" in New York City going forward.) The company said the move is being made to further build its “meaningful presence" in St. Petersburg and to enable increased collaboration among teams across banners and functions, while also reducing costs.
Separately, in September, Foot Locker will open its global technology services hub in Dallas. Led by chief technology officer Adrian Butler, the new technology and innovation center will accelerate technology delivery and cross-functional collaboration with access to a best-in-class technology talent pool, according to the company.
Also as part of its strategy and ongoing efforts to simplify its business model and focus on core banners and regions, Foot Locker is closing its stores and e-commerce operations in Denmark, Norway, Sweden and South Korea.
In addition, the retailer has entered into agreements with Fourlis Holdings Société Anonyme (Fourlis Group), a retail group and licensing operator in Southeast Europe, to transfer store and e-commerce operations in Greece and store operations in Romania as well as for future store and e-commerce expansion in South East Europe.
In combination with future expansion opportunities in Greece and Romania, the company and Fourlis Group see an opportunity for over 100 stores in the region over the next several years.
“Through our Lace Up Plan, we are unlocking meaningful opportunities for our business as we are leveraging our strong brand partnerships, differentiating our in-store experiences through refreshes and new concept doors, and enhancing our customer connections via digital and loyalty,” said CEO Mary Dillon. “We are also continuing to simplify our business to enable greater focus on our core banners and markets and have taken steps to further streamline our operations in Asia and Europe, while expanding our licensing partnerships.”
Second-quarter results
Foot Locker reported its second-quarter results one week after it debuted its “store of the future” format in its revamped store in Manhattan’s Herald Square. The store features a streamlined, easier-to-shop layout, a more modern and distinctive environment, digital fixtures and other technological advances.
Foot Locker’s net losses grew to $12 million, or $0.13 a share, for the quarter ended Aug. 3, from $5 million, or $0.5 a share, in the year-ago period. Adjusted per-share losses came to $0.5 per share, beating analysts’ estimates of a loss of $0.07 per share.
Total revenue edged up 1.9% to $1.896 billion, just ahead of estimates of $1.888 billion. Comparable sales increased a better-than-expected 2.6%, led by global Foot Locker and Kids Foot Locker comparable sales growth of 5.2%.
“The Lace Up Plan is working, as evidenced by our return to positive total and comparable sales growth as well as gross margin expansion in the second quarter,” stated Dillon. “Our top line trends strengthened as we moved through the quarter, including a solid start to back-to-school. We were also particularly pleased to deliver stabilization in our Champs Sports banner."
The company affirmed its full-year guidance for adjusted earnings per share of $1.50 to $1.70, sales growth of negative 1% to positive 1% and comparable sales growth of 1% to 3%.
During the second quarter, Foot Locker opened five new stores, closed 31 stores, remodeled or relocated 14 stores and refreshed 67 stores to its current design standards. As of Aug. 3, the company operated 2,464 stores in 26 countries in North America, Europe, Asia, Australia and New Zealand. In addition, 213 licensed stores were operating in the Middle East and Asia.
