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Foot Locker still outrunning its competitors


Higher demand for running and basketball shoes is translating into more record sales and profits for Foot Locker, which reported impressive third quarter results on Friday.

The New York-based specialty athletic retailer posted a same store sales increase of 8.7% in its third quarter ended Oct. 31.

"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 CEO. "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."

Foot Locker has been widening and changing up its product assortment as consumers demand more "athleisure" apparel and footwear. This new strategy seems to be resonating with shoppers.

Total sales at Foot Locker increased 3.6%, to $1,794 million this year, compared with sales of $1,731 million for the corresponding prior-year period. Net income for the company's third quarter was $80 million, or $0.57 per share.

During the third quarter, the company opened 30 new stores, remodeled or relocated 48 stores, and closed 16 stores. As of Oct. 31, the company operated 3,432 stores in 23 countries in North America, Europe, Australia, and New Zealand.

"We continue to manage inventory carefully, and we are heading into the holidays with very fresh and distinctive assortments to drive full-price selling," said Lauren Peters, executive VP and CFO. "Foot Locker also has a very strong balance sheet and a well-funded pension plan. Our pension plan is sufficiently funded today to absorb a $100 million liability resulting from this litigation without requiring any cash contributions by the company to the plan in the near term. This charge does not change our ability to invest in the business to reach the 2020 goals we laid out at the beginning of the year, and to return cash to shareholders in the same manner as we intended to before this accrual."

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