Foot Locker disappoints with underwhelming sales and earnings
Following a string of strong quarterly results, American sportswear retailer Foot Locker, Inc. reported declines in both sales and earnings in the second quarter ended August 3, 2019, falling short of Wall Street’s expectations.
The company announced total quarterly sales of $1.77 billion, down 0.4% from $1.78 billion in the prior-year period, despite a 0.8% increase in comparable store sales.
Net income for the quarter totaled $60 million, or $0.55 per share, down from the net income of $88 million, or $0.75 per share, reported by Foot Locker in the same period in the previous year. Excluding one-off charges, the company’s non-GAAP earnings per share (EPS) came to $0.66.
According to FactSet data cited by CNBC, analysts had expected the company to report EPS of $0.67 on revenue of $1.82 billion. Foot Locker’s disappointing performance led shares in the company to plummet 18.9% on Friday, following the announcement of its results.
“While our results in the second quarter did come in at the low end of our expectations, we saw improvement in our performance as we moved through each month of the quarter,” said Foot Locker President and CEO Richard Johnson in a release. “We remain deeply connected with sneaker and youth culture, and believe this positive momentum exiting the quarter has us well positioned for the back-to-school period and beyond. Further, our team continues to make meaningful progress against our long-term strategic imperatives.”
Year to date, the company saw sales rise 1.2% to $3.85 billion in the first half of fiscal 2019, up from $3.81 billion, while comparable store sales rose 2.8%.
Net income for the six-month period fell to $232 million, or $2.08 per share, down from $253 million, or $2.14 per share, in the first half of 2018.
Foot Locker opened 10 new stores and closed 37 in the second quarter, kicking off August with a network of 3,174 stores spread over 27 countries in North America, Europe, Asia, Australia, and New Zealand. The company also boasts 123 franchised Foot Locker locations in the Middle East and 10 franchised Runners Point stores in Germany.
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