Contact: James R. Lance
Vice President,
Corporate Finance and Investor Relations
Foot Locker, Inc.
(212) 720-3882

FOOT LOCKER, INC. REPORTS 2018 FIRST QUARTER RESULTS


  • First Quarter Net Income of $165 Million, or $1.38 Per Share
  • Non-GAAP Net Income of $174 Million, or $1.45 Per Share
  • First Quarter Comparable-Store Sales Decreased 2.8 Percent

NEW YORK, NY, May 25, 2018 - Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, reported today financial results for its first quarter ended May 5, 2018.

First Quarter Results

Net income for the Company's first quarter ended May 5, 2018 was $165 million, or $1.38 per share, compared to net income of $180 million, or $1.36 per share in the same period of fiscal 2017. This result included an incremental $12 million charge related to the Company's pension litigation. Excluding this charge, which reduced after-tax earnings by 7 cents per share, non-GAAP earnings were $1.45 per share.

First quarter comparable-store sales decreased 2.8 percent. Total first quarter sales increased 1.2 percent, to $2,025 million this year, compared to sales of $2,001 million for the corresponding prior-year period. Excluding the effect of foreign exchange rate fluctuations, total sales for the first quarter decreased 1.5 percent.

The Company's gross margin rate decreased to 32.9 percent from 34 percent a year ago, while the SG&A expense rate increased to 19 percent from 18.5 percent in the first quarter of 2017, primarily reflecting the significant investments the Company is making in its digital operations.

'The flow of premium product continues to improve, with increasing breadth and depth in the most sought after styles from our key vendors,' said Richard Johnson, Chairman and Chief Executive Officer. 'This led to first quarter results which were above our expectations. With the strength of our strategic vendor partnerships and our central position in youth culture, we continue to believe that we are poised to inflect to positive comparable-store sales growth as we progress through the year.'

Financial Position

As of May 5, 2018, the Company's merchandise inventories were $1,210 million, 5.4 percent lower than at the end of the first quarter last year. Using constant currencies, inventory decreased 7.1 percent.

'The team did an excellent job in managing our inventories and helping to clear slow moving product in a promotional environment, giving us the flexibility to flow in fresh and exciting product,' said Lauren Peters, Executive Vice President and Chief Financial Officer. 'This disciplined approach positions our inventory to drive improved top and bottom line results over the balance of the year.'

The Company's cash totaled $1,029 million, while the debt on its balance sheet was $125 million. The Company spent $112 million to repurchase 2.6 million shares during the quarter and paid a quarterly dividend of $0.345 per share, spending $41 million.

Store Base Update

During the first quarter, the Company opened 11 new stores, remodeled or relocated 43 stores, and closed 37 stores. As of May 5, 2018, the Company operated 3,284 stores in 24 countries in North America, Europe, Australia, and New Zealand. In addition, 105 franchised Foot Locker stores were operating in the Middle East, as well as 11 franchised Runners Point stores in Germany.

The Company is hosting a live conference call at 9:00 a.m. (EDT) today, May 25, 2018, to review these results and discuss the outlook for the remainder of 2018. This conference call may be accessed live by dialing 1-866-906-4691 (U.S. and Canada) or +44 203-107-0289 (International), with the passcode 5087467, or via the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. Please log on to the website 15 minutes prior to the call in order to register. An archived replay of the conference call can be accessed approximately two hours following the end of the call at 1-855-859-2056 (U.S. and Canada) or +1 404-537-3406 (International) with passcode 5087467 through June 8, 2018. A replay of the call will also be available via webcast from the same Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com.

Disclosure Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company's business and operations, including future cash flows, revenues, and earnings, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors which are detailed in the Company's filings with the U.S. Securities and Exchange Commission.

These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. For additional discussion on risks and uncertainties that may affect forward-looking statements, see 'Risk Factors' disclosed in the 2017 Annual Report on Form 10-K. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.

-XXX-

Foot Locker, Inc. 330 West 34th Street, New York, NY 10001

Attachments

  • Original document
  • Permalink

Disclaimer

Foot Locker Inc. published this content on 25 May 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 May 2018 11:07:09 UTC