23 Aug Foot Locker Quarterly Sales Hit $1.78B
Foot Locker Inc. total sales increased 5 percent to $1.78 billion in the fiscal second quarter ended July 30, thanks to continued expansion and comparable-store sales growth of 4.7 percent.
Excluding the effect of foreign currency fluctuations, total sales for the second quarter increased 5.4 percent.
During the second quarter, Foot Locker opened 23 new stores, remodeled or relocated 64 stores and closed 18 stores. As of July 30, it operated 3,401 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 54 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 15 franchised Runners Point stores in Germany.
The company’s gross margin rate improved to 33 percent of sales from 32.6 percent a year ago, while the selling, general, and administrative expense rate increased to 19.7 percent of sales from 19.5 percent. Net income rose 5 percent to $127 million, and earnings per share rose 11.9 percent to 94 cents due to stock buybacks.
“Within the second quarter, we drove comparable sales gains across basketball, running and classic footwear, as well as apparel,” said Richard Johnson, chairman of the board and chief executive officer. “We also posted gains in all regions and channels in which we operate.”
Cash Hoard Approaches $1 billion
At July 30, 2016, the company’s merchandise inventories were $1.34 billion, 1.7 percent higher than at the end of the second quarter last year. Using constant currencies, inventory increased 1.9 percent.
The company’s cash totaled $945 million, while the debt on its balance sheet was $129 million. The company spent approximately $188 million to repurchase 3.35 million shares during the quarter and paid a quarterly dividend of 27.5 cents, spending $37 million.
“The strong balance sheet puts the company in a strong position to simultaneously invest in its business and return substantial amounts of cash to shareholders through our dividend and share repurchase programs,” said Lauren Peters, executive vice president and chief financial officer.