Foot Locker reduces first quarter expectations due to slow start

By

Obi Anyanwu

Published
Apr 20, 2017

Foot Locker on Thursday updated its expectations for the first quarter and full year 2017. The footwear retailer now expects its earnings per share to be between $1.36 and $1.39, or equal or slightly below the previous year’s record earnings.

 
Richard Johnson, Chairman and CEO, warned in a conference call in February that the first quarter would be challenging “based on the slower than usual start in the United States.” He added today that the delay in the issuance of income tax refund checks impacted February comparable sales, which were in the low-double-digits, but April sales are expected to be up in the low double digits.
 
Lauren Peters, Executive Vice President and Chief Financial Officer, added: "Our full-year guidance called for a mid-single-digit percentage comparable store sales increase and a double- digit percentage earnings per share increase. That guidance included little operating leverage this year for several reasons outlined during our earnings call.  With comparable sales that fall short of a mid-single-digit percentage increase, we currently expect some operating deleverage in the first quarter."

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In February, Foot Locker posted $7,766 million in fiscal year sales and net income of $664 million, or $4.91 per share. The retailer also surpassed $1 billion in earnings before interest and taxes for the first time in fiscal 2016.
 
For the first quarter, Foot Locker expects comparable store sales to increase at a low-single-digit percentage rate, and the retailer expects to achieve double-digit earnings per share percentage increases and mid-single-digit comparable store sales increases in the remaining three quarters.