UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 19, 2010
Foot Locker, Inc.
(Exact Name of
Registrant as Specified in its Charter)
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New York |
1-10299 |
13-3513936 |
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(State or other Jurisdiction |
(Commission File Number) |
(I.R.S. Employer |
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of Incorporation) |
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Identification No.) |
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112 West 34th Street, New York, New York |
10120 |
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(Address of Principal Executive Offices) |
(Zip Code) |
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Registrant’s telephone number, including area code: 212-720-3700
Former
Name/Address
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. |
Results of Operation and Financial Condition |
On August 19, 2010, Foot Locker, Inc. issued a press release announcing its operating results for the second quarter of 2010. A copy of the press release is furnished as Exhibit 99.1, which, in its entirety, is incorporated herein by reference.
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Item 9.01. |
Financial Statements and Exhibits |
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(c) |
Exhibits |
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99.1 |
Press Release of Foot Locker, Inc. dated August 19, 2010 reporting operating results for the second quarter of 2010. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FOOT LOCKER, INC. |
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(Registrant) |
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Date: August 19, 2010 |
By: |
/s/ Robert W. McHugh |
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Executive Vice President and |
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Chief Financial Officer |
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EXHIBIT 99.1
NEWS RELEASE
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Contact: |
Peter D. Brown |
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Senior Vice President, |
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Chief Information Officer |
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and Investor Relations |
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Foot Locker, Inc. |
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(212) 720-4254 |
FOOT LOCKER, INC. REPORTS SECOND QUARTER RESULTS
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Earnings of $0.04 Per Share |
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Comparable-Store Sales Increased 2.5 Percent |
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Gross Margin Increased 230 Basis Points |
NEW YORK, NY, August 19, 2010 – Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended July 31, 2010.
Second
Quarter Results
Net income for the Company’s second
quarter ended July 31, 2010 was $6 million, or $0.04 per share, compared with
break-even performance last year. Second quarter sales decreased 0.3 percent,
to $1,096 million this year, compared with sales of $1,099 million for the
corresponding prior-year period. Second quarter comparable-store sales
increased 2.5 percent. Excluding the effect of foreign currency fluctuations,
total sales for the second quarter increased 1.3 percent.
“The increase in our second quarter net income was driven primarily by the strong 230 basis point improvement in our gross margin rate. Our significantly improved inventory position facilitated our ability to drive higher margin sales by being more selective with our promotional activity while at the same time being more responsive to changes in consumer fashion trends,” stated Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker, Inc. “We are pleased to report our second consecutive quarter of sales and profit growth, versus the comparable periods of last year, as we continue to implement our new strategic plan.”
Year-to-Date Results
Net income for the Company’s
first six months of the year increased 94 percent to $60 million, or $0.38 per
share, compared with net income of $31 million, or $0.20 per share, for the
corresponding period last year. Year-to-date sales increased 2.7 percent, to
$2,377 million, compared with sales of $2,315 million last year. Year-to-date
comparable-store sales increased 3.7 percent. Excluding the effect of foreign
currency fluctuations, total sales year-to-date increased 2.2 percent.
Financial Position
The Company’s
merchandise inventory at the end of the second quarter was $1,219 million, or
5.1 percent lower than at the end of the second quarter last year.
During the second quarter of 2010, the Company repurchased 875,000 shares of its common stock for $12.0 million under the Company’s $250 million share repurchase program. Year-to-date, the Company has repurchased approximately 1.4 million shares of its common stock for $19.7 million.
- MORE -
Foot Locker, Inc. 112 West 34th Street, New York, NY 10120
At July 31, 2010, the Company’s cash and short-term investments totaled $519 million while the debt on its balance sheet was $137 million. The Company’s total cash position, net of debt, was $105 million higher than the same time last year.
Store Base Update
During the first
six months of the year, the Company opened 27 new stores, remodeled/relocated
94 stores and closed 51 stores. At July 31, 2010, the Company operated 3,476
stores in 21 countries in North America, Europe and Australia. In addition, 20
franchised stores were operating in the Middle East and South Korea.
The Company is hosting a live conference call at 9:00 a.m. (ET) on Friday, August 20, 2010 to discuss these results. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 p.m. on Friday, August 27, 2010.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, 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 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 plans and strategic plans effectively with regard to each of its business units, and risks associated with foreign global 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 July 31, 2010 and August 1, 2009
(In millions, except per share amounts)
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Second |
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Second |
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Sales |
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$ |
1,096 |
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$ |
1,099 |
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Cost of sales |
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791 |
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819 |
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Selling, general and administrative expenses |
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268 |
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252 |
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Depreciation and amortization |
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26 |
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28 |
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Interest expense, net |
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2 |
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3 |
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Other income |
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(1 |
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(1 |
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1,086 |
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1,101 |
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Income (loss) from continuing operations before income taxes |
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10 |
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(2 |
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Income tax expense (benefit) |
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4 |
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(1 |
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Income (loss) from continuing operations |
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6 |
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(1 |
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Discontinued operations, net of tax |
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— |
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1 |
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Net Income |
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$ |
6 |
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$ |
— |
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Diluted EPS: |
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Income from continuing operations |
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$ |
0.04 |
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$ |
— |
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Discontinued operations, net of tax |
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— |
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— |
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Net Income |
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$ |
0.04 |
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$ |
— |
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Weighted-average diluted shares outstanding |
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156.9 |
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155.9 |
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Year-To-Date |
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Year-To-Date |
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Sales |
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$ |
2,377 |
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$ |
2,315 |
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Cost of sales |
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1,679 |
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1,679 |
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Selling, general and administrative expenses |
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548 |
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530 |
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Depreciation and amortization |
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52 |
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56 |
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Interest expense, net |
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5 |
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5 |
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Other income |
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(1 |
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(2 |
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2,283 |
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2,268 |
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Income from continuing operations before income taxes |
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94 |
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47 |
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Income tax expense |
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34 |
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17 |
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Income from continuing operations |
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60 |
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30 |
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Discontinued operations, net of tax |
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— |
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1 |
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Net Income |
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$ |
60 |
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$ |
31 |
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Diluted EPS: |
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Income from continuing operations |
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$ |
0.38 |
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$ |
0.20 |
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Discontinued operations, net of tax |
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— |
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— |
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Net Income |
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$ |
0.38 |
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$ |
0.20 |
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Weighted-average diluted shares outstanding |
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157.1 |
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155.8 |
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- MORE -
FOOT LOCKER, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(In
millions)
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July
31, |
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August
1, |
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Assets |
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CURRENT ASSETS |
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Cash, cash equivalents and short-term investments |
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$ |
519 |
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$ |
415 |
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Merchandise inventories |
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1,219 |
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1,284 |
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Other current assets |
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161 |
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211 |
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1,899 |
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1,910 |
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Property and equipment, net |
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376 |
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433 |
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Deferred tax assets |
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351 |
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366 |
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Other assets |
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287 |
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306 |
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$ |
2,913 |
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$ |
3,015 |
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Liabilities and Shareholders’ Equity |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
345 |
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$ |
322 |
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Accrued and other liabilities |
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236 |
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191 |
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581 |
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513 |
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Long-term debt and obligations under capital leases |
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137 |
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138 |
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Other liabilities |
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279 |
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387 |
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SHAREHOLDERS’ EQUITY |
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1,916 |
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1,977 |
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$ |
2,913 |
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$ |
3,015 |
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- MORE -
FOOT
LOCKER, INC.
Store and Estimated Square Footage
(unaudited)
(Square footage in thousands)
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July
31, |
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August
1, |
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January
30, |
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Foot Locker U.S. |
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Number of stores |
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1,155 |
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1,211 |
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1,171 |
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Gross square footage |
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4,658 |
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4,898 |
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4,744 |
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Selling square footage |
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2,759 |
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2,901 |
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2,812 |
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Footaction |
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Number of stores |
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313 |
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327 |
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319 |
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Gross square footage |
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1,442 |
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1,522 |
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1,471 |
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Selling square footage |
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906 |
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951 |
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926 |
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Lady Foot Locker |
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Number of stores |
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400 |
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469 |
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415 |
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Gross square footage |
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883 |
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1,034 |
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915 |
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Selling square footage |
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506 |
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592 |
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524 |
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Kids Foot Locker |
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Number of stores |
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304 |
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304 |
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301 |
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Gross square footage |
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728 |
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724 |
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718 |
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Selling square footage |
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426 |
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425 |
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422 |
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Champs Sports |
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Number of stores |
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548 |
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565 |
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552 |
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Gross square footage |
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2,923 |
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3,018 |
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2,946 |
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Selling square footage |
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1,940 |
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2,005 |
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1,953 |
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CCS |
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Number of stores |
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12 |
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2 |
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2 |
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Gross square footage |
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31 |
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6 |
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6 |
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Selling square footage |
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20 |
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4 |
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4 |
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Foot Locker International |
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Number of stores |
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744 |
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737 |
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740 |
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Gross square footage |
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2,147 |
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2,145 |
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2,155 |
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Selling square footage |
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1,091 |
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1,093 |
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1,094 |
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Total Stores Operated |
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Number of stores |
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3,476 |
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3,615 |
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3,500 |
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Gross square footage |
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12,812 |
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13,347 |
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12,955 |
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Selling square footage |
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7,648 |
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7,971 |
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7,735 |
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Total Franchised Stores |
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Number of stores |
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20 |
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19 |
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22 |
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Gross square footage |
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|
78 |
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|
80 |
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|
78 |
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Selling square footage |
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50 |
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53 |
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53 |
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-XXX-