Foot Locker misses sales expectations in Q4
New York-based sports and footwear retailer Foot Locker, Inc. announced declines in its fourth-quarter revenues and earnings on Friday, as strong footwear sales failed to offset the negative effects of a disappointing holiday season.
For the fourth quarter ended February 1, 2020, the company reported net sales of $2.22 billion, down 2.2% from $2.27 billion in the prior-year period. Adjusted for foreign exchange rates, the decrease was 2.0%, while comparable-store sales fell 1.6%.
These figures fell short of expectations, as FactSet analysts cited by MarketWatch had expected the company to achieve revenues of $2.24 billion in the quarter.
“While we had leading positions in key on-trend footwear styles, this was not enough to offset softer than expected demand during the compressed holiday season, a very promotional marketplace for apparel, and tougher launch comparisons,” commented Foot Locker chairman and CEO Richard Johnson in a release.
Foot Locker’s net income for the quarter was $141 million, or $1.34 per share, decreasing 3.6% from $158 million, or $1.39 per share, in Q4 2018.
Excluding one-time items, the company’s adjusted earnings per share in the period were $1.63, beating the FactSet consensus of $1.58.
As for the full fiscal year 2019, Foot Locker’s net sales came to $8.01 billion, an increase of 0.8% (2.0% in constant currencies) compared to fiscal 2018’s total of $7.94 billion. Comparable-store sales increased 2.2% in the 12-month period.
Annual net income totaled $498 million, or $4.56 per share, down from $541 million, or $4.66 per share, in the previous year.
During the fourth quarter, Foot Locker opened 32 new stores and closed 63, ending the fiscal year with 3,129 company-operated stores in 27 countries spread across North America, Europe, Asia and Oceania. There are also currently 130 franchised Foot Locker stores in the Middle East and 9 franchised Runner Point locations in Germany.
“We built a strong foundation in 2019 and we believe we have the right plan in place to deliver against our long-term financial objectives,” added Johnson. “We are optimistic about our company’s future, and by making progress against our strategic imperatives, we believe we will strengthen our position at the center of sneaker and youth culture, and create value for our shareholders.”
Looking to the future, Foot Locker expects comparable sales to increase in the low-single digits in fiscal 2020, while earnings per share are predicted to rise in the low-to-mid single digits.
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