LONDON, UK / ACCESSWIRE / August 25, 2016 / Active Wall St. announces its post-earnings coverage on Foot Locker, Inc. (NYSE: FL). The company reported its second quarter fiscal 2016 on August 19, 2016. Overall, the company had a positive quarter beating estimates across the board. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended July 30, 2016 Foot Locker reported net income of $127 million, or $0.94 per share, up 12% from $119 million, or $0.84 per share, in the year ago. Analysts had estimated net income of $0.90 per share. Revenue increased 5% to $1.78 billion.

In the second quarter, comparable same store sales (comps) at existing Foot Locker's stores rose 4.7%, beating the 3.9% analysts had expected. On the earnings call, Foot Locker noted that Lady Foot Locker/SIX: 02 comps were down low-mid single, breaking its two year streak of comp gains. Although footwear sales continued to be strong, apparel were down by double-digits. The company stated that Runners Point and Sidestep banners continued to run off double digits, pressured by traffic declines that seemed to be at least in part a function of local events in Germany. In its Direct-to-Customers segment, overall comp was up 7.1%. Foot Locker's sales by its store banner dotcom businesses in the U.S. increased in the teens, with significantly higher growth rates at Foot Locker's digital businesses in Europe and Canada.

Foot Locker's CEO Richard Johnson said that the results saw strong support from customers interest in Stephen Curry sneaker by Under Armour Inc. and the Kevin Durant signature shoe, the KD9, from Nike Inc. The company noted that consumers were purchasing them for fashion rather than competition.

"Within the second quarter, we drove comparable sales gains across basketball, running, and classic footwear, as well as apparel," added Mr. Johnson.

Store Update

During Q2 FY16, Foot Locker opened 23 new stores, remodelled or relocated 64 stores and closed 18 stores. At the end of the quarter the company operated a total of 3,401 stores across the globe, excluding 54 franchised Foot Locker stores in the Middle East and South Korea, as well as 15 franchised Runners Point stores in Germany.

Financials

During Q2 FY16, Foot Locker's gross margin expanded 40 basis points to 33% of sales up from 32.6% in Q2 FY15. The selling, general, and administrative expense (SG&A) rate increased 20 basis points to 19.7% during Q2 FY16. Gross margin rose to 33.0% of sales for the quarter.

Foot Locker ended the quarter with cash and cash equivalents of $945 million versus $970 million in the same period from last year. During the reported quarter, the company repurchased 3.35 million shares worth $188 million and paid dividends of $37 million.

Stock Performance

On August 24, 2016, at the close of trading session, Foot Locker's shares declined 0.32% to finish at $68.22. A total of 1.74 million shares were exchanged during the trading session. The company's share price has gained 14.67% in the past one month and 6.21% on an YTD basis.

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SOURCE: Active Wall Street