Foot Locker reports $127 million net income in Q2, $0.94 per share

By

Obi Anyanwu

Published
Aug 23, 2016

Foot Locker on Friday released its financial results for the second quarter of fiscal 2016. Comparable sales increased 4.7% due to basketball, running and classic footwear sales, as well as apparel. The company achieved gains in all regions and channels, which according to Foot Locker Chairman and CEO Richard Johnson, reflected the success of strategic initiatives within the company.

 
In addition to the comparable sales increase, total net sales increased 5.0% to $1,780 million over $1,695 million in the prior year. Net income increased to $127 million, or $0.94 per share, from $119 million, or $0.84 per share, in the prior second quarter.
 
The company’s gross margin rate improved to 33% of sales from 32.6% of sales in the previous year, and the SG&A expense rate increased to 19.7% of sales from 19.5%.

Also in the second quarter, Foot Locker remodeled or relocated 64 stores and closed 18 stores.
 
Net income for the first six months of fiscal 2016 increased to $318 million, or $2.33 per share, from $303 million, or $2.14 per share in the prior comparable period. Year-to-date sales increased 4.3% to $3,767 million and year-to-date comparable sales increased 3.7%.
 
"The Company has made substantial and thoughtful investments in its stores, digital sites, and infrastructure over the years, which have led to significantly improved productivity," said Lauren Peters, Executive Vice President and Chief Financial Officer. "The returns from those investments, combined with careful inventory and expense management, have led to our current strong financial position. This position of strength underpins our commitment to balance our allocation of capital between additional investments in the business and returning substantial amounts of cash to shareholders through our dividend and share repurchase programs, as evidenced by the $350 million of cash we have returned to shareholders in the first half of 2016."
 
Foot Locker currently operates 3,401 stores in 23 countries in North America, Europe, Australia and New Zealand.