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8-K - FOOT LOCKER INCc71669_8-k.htm

EXHIBIT 99.1

(FOOT LOCKER LOGO)

N E W S  R E L E A S E

 

 

 

Contact:

 

John A. Maurer

 

 

Vice President,

 

 

Treasurer and Investor Relations

 

 

Foot Locker, Inc.

 

 

(212) 720-4092

FOOT LOCKER, INC. REPORTS THIRD QUARTER RESULTS

 

 

 

 

Net Income of $0.69 Per Share, Up 60 Percent Compared to Last Year

 

Comparable-Store Sales Increased 10.2 Percent

 

SG&A Rate Improved 210 Basis Points


 

NEW YORK, NY, November 16, 2012 – Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its third quarter ended October 27, 2012.

 

Third Quarter Results

Net income for the Company’s third quarter ended October 27, 2012 was $106 million, or $0.69 per share, compared with net income last year of $66 million, or $0.43 per share. Third quarter sales increased 9.3 percent, to $1,524 million this year, compared with sales of $1,394 million for the corresponding prior-year period. Third quarter comparable-store sales increased 10.2 percent, which consisted of a 9.4 percent increase in store sales and an 18.3 percent increase in direct-to-customer sales. Excluding the effect of foreign currency fluctuations, total sales for the third quarter increased 11.0 percent.

 

Year-to-Date Results

Net income for the Company’s first nine months of the year increased 48.7 percent to $293 million, or $1.90 per share, compared with net income of $197 million, or $1.27 per share, for the corresponding period last year. Year-to-date sales increased 8.4 percent, to $4,469 million, compared with sales of $4,121 million last year. Year-to-date comparable-store sales increased 9.9 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 10.4 percent.

 

“Our team put together another outstanding quarter, delivering a double digit sales gain and controlling expenses to drive our bottom line earnings to new heights,” said Ken C. Hicks, Chairman and Chief Executive Officer. “The ongoing focus of all of our associates on the strategies and initiatives we updated at the beginning of the year continues to enhance the productivity of our key assets. Inventory turns are improving; sales per square foot are increasing; and by investing in our people and giving them the best tools to succeed with the customer, our associates are becoming even more productive, too.”

 

Non-GAAP Adjustment

Included in the Company’s third quarter and year-to-date results is a tax benefit of $9 million, or $0.06 per share. This benefit is the result of a settlement of a foreign tax audit, resulting in a reduction of tax reserves established in prior periods. On a non-GAAP basis, Foot Locker’s third quarter earnings were $0.63 per share. A reconciliation of GAAP to non-GAAP results for the third quarter of 2012 is provided in the table below.

— MORE —

Foot Locker, Inc. 112 West 34th Street, New York, NY 10120



Financial Position

At October 27, 2012, the Company’s merchandise inventory was $1,240 million, 3.0 percent higher than at the end of the third quarter last year. The Company’s cash and short-term investments totaled $853 million, while the debt on its balance sheet was $133 million. The Company’s total cash position, net of debt, was $158 million higher than the same time last year.

During the third quarter of 2012, the Company repurchased approximately 841 thousand shares of its common stock for $29.7 million. Year-to-date, the Company has repurchased just under 3 million shares of its common stock for $94.3 million under the Company’s $400 million share repurchase program.

Store Base Update
During the first nine months of the year, the Company opened 70 new stores, remodeled/relocated 159 stores and closed 72 stores. At October 27, 2012, the Company operated 3,367 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 40 franchised stores were operating in the Middle East and South Korea.

The Company is hosting a live conference call at 9:00 a.m. (EST) today, November 16, 2012, to discuss these results and provide comments on the current business environment and trends. This conference call may be accessed live by dialing 888-446-3850 (U.S. and Canada) or 630-691-2739 (International) using the passcode 33645015, 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 download any necessary software. A replay of the call will be available via webcast from the same Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com through November 30, 2012.

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 Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company’s merchandise mix and retail locations, the Company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), pandemics and similar major health concerns, unseasonable weather, further deterioration of global financial markets, economic conditions worldwide, further deterioration of business and economic conditions, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business and strategic plans effectively with regard to each of its business units, and risks associated with global product sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution. 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.

- MORE -


FOOT LOCKER, INC.
Condensed Consolidated Statements of Operations
(unaudited)
Periods ended October 27, 2012 and October 29, 2011
(In millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third
Quarter
2012

 

Third
Quarter
2011

 

YTD 2012

 

YTD 2011

 

 

 


 


 


 


 

Sales

 

$

1,524

 

$

1,394

 

$

4,469

 

$

4,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

1,019

 

 

941

 

 

2,999

 

 

2,805

 

SG&A

 

 

319

 

 

320

 

 

931

 

 

919

 

Depreciation and amortization

 

 

30

 

 

27

 

 

88

 

 

82

 

Other income

 

 

 

 

 

 

(1

)

 

(1

)

Interest expense, net

 

 

1

 

 

1

 

 

3

 

 

4

 

 

 



 



 



 



 

 

 

 

1,369

 

 

1,289

 

 

4,020

 

 

3,809

 

 

 



 



 



 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

155

 

$

105

 

$

449

 

$

312

 

Income tax expense (1)

 

 

49

 

 

39

 

 

156

 

 

115

 

 

 



 



 



 



 

Net income

 

$

106

 

$

66

 

$

293

 

$

197

 

 

 



 



 



 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.69

 

$

0.43

 

$

1.90

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average diluted shares outstanding

 

 

153.9

 

 

153.6

 

 

154.0

 

 

154.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter 2012

 

Third Quarter 2011

 

YTD 2012

 

YTD 2011

 

 

 


 


 


 


 

Non GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclude tax benefit (1)

 

$

9

 

$

 

$

10

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP Net Income

 

$

97

 

$

66

 

$

283

 

$

197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP Diluted EPS

 

$

0.63

 

$

0.43

 

$

1.83

 

$

1.27

 

Footnote to explain adjustments

 

 

 

(1) Included in the third quarter of 2012 is a tax benefit of $9 million, or $0.06 per diluted share. This benefit is the result of a settlement of a foreign tax audit, which resulted in a reduction of tax reserves established in prior periods. Also included in the 2012 year-to-date results is a benefit of $1 million, or $0.01 per diluted share, which represented Canadian provincial tax rate changes.

- MORE -


FOOT LOCKER, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(In millions)

 

 

 

 

 

 

 

 

 

 

October 27,
2012

 

October 29,
2011

 

 

 


 


 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash, cash equivalents and short-term investments

 

$

853

 

$

698

 

Merchandise inventories

 

 

1,240

 

 

1,204

 

Other current assets

 

 

202

 

 

157

 

 

 



 



 

 

 

 

2,295

 

 

2,059

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

462

 

 

421

 

Deferred tax assets

 

 

285

 

 

295

 

Other assets

 

 

257

 

 

270

 

 

 



 



 

 

 

$

3,299

 

$

3,045

 

 

 



 



 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

327

 

$

284

 

Accrued and other liabilities

 

 

298

 

 

284

 

 

 



 



 

 

 

 

625

 

 

568

 

 

 

 

 

 

 

 

 

Long-term debt and obligations under capital leases

 

 

133

 

 

136

 

Other liabilities

 

 

252

 

 

248

 

SHAREHOLDERS’ EQUITY

 

 

2,289

 

 

2,093

 

 

 



 



 

 

 

$

3,299

 

$

3,045

 

 

 



 



 

- MORE -


FOOT LOCKER, INC.
Store and Estimated Square Footage
(unaudited)
(Square footage in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

October 27,
2012

 

October 29,
2011

 

October 30,
2010

 

 

 


 


 


 

Foot Locker U.S.

 

 

 

 

 

 

 

 

 

 

Number of stores

 

1,090

 

 

1,129

 

 

1,152

 

 

Gross square footage

 

4,378

 

 

4,549

 

 

4,633

 

 

Selling square footage

 

2,558

 

 

2,689

 

 

2,744

 

 

 

 

 

 

 

 

 

 

 

 

 

Footaction

 

 

 

 

 

 

 

 

 

 

Number of stores

 

287

 

 

299

 

 

312

 

 

Gross square footage

 

1,329

 

 

1,380

 

 

1,439

 

 

Selling square footage

 

832

 

 

864

 

 

904

 

 

 

 

 

 

 

 

 

 

 

 

 

Lady Foot Locker

 

 

 

 

 

 

 

 

 

 

Number of stores

 

319

 

 

347

 

 

399

 

 

Gross square footage

 

711

 

 

773

 

 

882

 

 

Selling square footage

 

411

 

 

447

 

 

506

 

 

 

 

 

 

 

 

 

 

 

 

 

Kids Foot Locker

 

 

 

 

 

 

 

 

 

 

Number of stores

 

295

 

 

292

 

 

302

 

 

Gross square footage

 

709

 

 

699

 

 

724

 

 

Selling square footage

 

412

 

 

407

 

 

421

 

 

 

 

 

 

 

 

 

 

 

 

 

Champs Sports

 

 

 

 

 

 

 

 

 

 

Number of stores

 

540

 

 

537

 

 

547

 

 

Gross square footage

 

2,870

 

 

2,857

 

 

2,919

 

 

Selling square footage

 

1,882

 

 

1,872

 

 

1,938

 

 

 

 

 

 

 

 

 

 

 

 

 

CCS

 

 

 

 

 

 

 

 

 

 

Number of stores

 

22

 

 

22

 

 

12

 

 

Gross square footage

 

51

 

 

54

 

 

31

 

 

Selling square footage

 

34

 

 

36

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

Foot Locker International

 

 

 

 

 

 

 

 

 

 

Number of stores

 

814

 

 

776

 

 

750

 

 

Gross square footage

 

2,372

 

 

2,262

 

 

2,168

 

 

Selling square footage

 

1,197

 

 

1,145

 

 

1,099

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Stores Operated

 

 

 

 

 

 

 

 

 

 

Number of stores

 

3,367

 

 

3,402

 

 

3,474

 

 

Gross square footage

 

12,420

 

 

12,574

 

 

12,796

 

 

Selling square footage

 

7,326

 

 

7,460

 

 

7,632

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Franchised Stores

 

 

 

 

 

 

 

 

 

 

Number of stores

 

40

 

 

32

 

 

24

 

 

Gross square footage

 

91

 

 

81

 

 

87

 

 

Selling square footage

 

62

 

 

56

 

 

57

 

 

-XXX-