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 21, 2003 - -------------------------------------------------------------------------------- FOOT LOCKER, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York No. 1-10299 13-3513936 - -------------------------------- ------------------------ ------------------------------------ (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 112 West 34th Street, New York, New York 10120 - --------------------------------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 720-3700 --------------
Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release of Foot Locker, Inc. dated August 21, 2003 reporting operating results for the second quarter of 2003. Item 12. Results of Operations and Financial Condition On August 21, 2003, Foot Locker, Inc. issued a press release announcing its operating results for the second quarter of 2003. A copy of the press release is attached as Exhibit 99.1, which, in its entirety, is incorporated herein by reference. 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 being hereunto duly authorized. FOOT LOCKER, INC. ------------------------------- (Registrant) Date: August 21, 2003 By: /s/ Bruce L. Hartman ----------------------------- Bruce L. Hartman Executive Vice President and Chief Financial Officer 2
EXHIBIT 99.1 FOOT LOCKER, INC N E W S R E L EA S E CONTACT: Peter D. Brown Vice President, Treasurer and Investor Relations Foot Locker, Inc. (212) 720-4254 FOOT LOCKER, INC. REPORTS SECOND QUARTER RESULTS o Earnings Per Share from Continuing Operations Increased 14 Percent to $0.25 Per Share o Debt, Net of Cash, Decreased to $24 Million from $87 Million Last Year o Company Extends Its Revolving Credit Facility to 2006 o Company Sets Third Quarter Earnings Guidance At $0.31-to-$0.33 Per Share NEW YORK, NY, August 21, 2003 - Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended August 2, 2003. Second Quarter Results Income from continuing operations increased 14 percent to $0.25 per share, or $37 million, from $0.22 per share, or $33 million last year. For the 13-week second quarter period, sales increased 3.5 percent to $1,123 million this year compared with sales of $1,085 million last year. Second quarter comparable-store sales decreased 4.4 percent. Year-to-Date Results Income from continuing operations for the 26-week period ended August 2, 2003, increased to $0.52 per share, or $76 million, compared with $0.48 per share, or $71 million last year. Year-to-date sales increased 3.5 percent to $2,251 million, compared with sales of $2,175 million last year. Comparable-store sales decreased 3.5 percent. Debt, net of cash, was reduced to $24 million from $87 million last year. Merchandise inventories remain current, and are both on plan and well positioned to support third quarter sales expectations. Matthew D. Serra, Foot Locker, Inc.'s President and Chief Executive Officer stated, "The Company's sales trend significantly improved in late July and this has continued into the third week of August. We expect our average price points to stabilize later in the third quarter as we anniversary against the current fashion trend of lower-priced classic footwear. Additionally, we expect our gross margin rate to continue to be favorable to last year due to our somewhat tempered promotional posture in the United States. Therefore, we currently expect third quarter earnings of $0.31-to-$0.33 per share, in line with analysts' estimates." On July 30, 2003, the Company amended and restated its revolving credit facility with its existing bank group, achieving a lower pricing structure and increased covenant flexibility, while extending the maturity date to July 2006. The credit facility was also increased in size by $10 million, to $200 million. On August 20, 2003, the Board of Directors declared a quarterly dividend on the Company's common stock of $0.03 per share. The dividend will be payable October 31, 2003 to shareholders of record on October 17, 2003. - MORE - Foot Locker, Inc. 112 West 34th Street New York NY 10120
During the second quarter, the Company opened 38 stores, remodeled/relocated 118 stores and closed 30 stores. The store openings included the Company's entrance into the Portugal and New Zealand markets. At August 2, 2003 the Company operated 3,608 stores in 16 countries in North America, Europe and Australia. The Company is hosting a live conference call at 10:00 am (EST) on Thursday, August 21, 2003. 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 pm on Monday, August 25, 2003. Disclosure Regarding Forward-Looking Statements This press release contains forward-looking statements, which reflect management's current views of future events and financial performance. 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), unseasonable weather, risks associated with foreign global sourcing, including political instability, changes in import regulations and the presence of severe acute respiratory syndrome, economic conditions worldwide, 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, and the ability of the Company to execute its business plans effectively with regard to each of its business units, including its plans for the marquee and launch footwear component of its business. 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 - 4
FOOT LOCKER, INC. Consolidated Statements of Operations (unaudited) Periods ended August 2, 2003 and August 3, 2002 (In millions, except per share amounts) - ------------------------------------------------------------------ --------------------- -- ---------------------- Second Quarter Second Quarter 2003 2002 --------------------- ---------------------- Sales $ 1,123 $ 1,085 Cost of sales 792 773 Selling, general and administrative expenses 233 220 Depreciation and amortization 38 38 Restructuring charge (income) (1) 1 (1) Interest expense, net 4 7 Other income (2) -- (3) --------------------- ---------------------- 1,068 1,034 --------------------- ---------------------- Income from continuing operations before income taxes 55 51 Income tax expense 18 18 --------------------- ---------------------- Income from continuing operations 37 33 Loss on disposal of discontinued operations, net of tax (1) (2) --------------------- ---------------------- Net income $ 36 $ 31 ===================== ====================== Diluted EPS: Income from continuing operations $ 0.25 $ 0.22 Loss on disposal of discontinued operations, net of tax (0.01) (0.01) --------------------- ---------------------- Net income $ 0.24 $ 0.21 ===================== ====================== Weighted-average diluted shares outstanding 152.1 151.0 --------------------- ---------------------- Year-To-Date Year-To-Date 2003 2002 --------------------- ---------------------- Sales $ 2,251 $ 2,175 Cost of sales 1,575 1,543 Selling, general and administrative expenses 474 440 Depreciation and amortization 75 74 Restructuring charge (income) (1) 1 (1) Interest expense, net 9 14 Other income (2) -- (3) --------------------- ---------------------- 2,134 2,067 --------------------- ---------------------- Income from continuing operations before income taxes 117 108 Income tax expense 41 37 --------------------- ---------------------- Income from continuing operations 76 71 Loss on disposal of discontinued operations, net of tax (1) (20) Cumulative effect of accounting changes, net of tax (3) (1) -- ===================== ====================== Net income $ 74 $ 51 ===================== ====================== Diluted EPS: Income from continuing operations $ 0.52 $ 0.48 Loss on disposal of discontinued operations, net of tax (0.01) (0.13) Cumulative effect of accounting changes, net of tax (3) -- -- --------------------- ---------------------- Net income $ 0.51 $ 0.35 ===================== ====================== Weighted-average diluted shares outstanding 151.7 150.9 - ------------------------------------------------------------------ --------------------- -- ---------------------- (1) Represents revisions in estimates to restructuring reserves for disposed businesses. (2) Amount in 2002 reflects real estate transactions. (3) Related to adoption of SFAS No. 143 "Accounting for Asset Retirement Obligations." - MORE - 5
FOOT LOCKER, INC. Condensed Consolidated Balance Sheets (unaudited) (In millions) ------------------------------------------------------------------------------------------------ August 2, August 3, 2003 2002 --------------- ---------------- Assets CURRENT ASSETS Cash and cash equivalents $ 332 $ 307 Merchandise inventories 948 887 Assets of discontinued operations 2 3 Other current assets 98 110 --------------- ---------------- 1,380 1,307 Property and equipment, net 621 626 Deferred tax assets 236 247 Other assets 332 283 --------------- ---------------- $ 2,569 $2,463 =============== ================ Liabilities and Shareholders' Equity CURRENT LIABILITIES Accounts payable $ 339 $ 389 Accrued liabilities 259 203 Current liabilities and reserves for restructuring, discontinued operations and businesses held for sale 23 28 Current portion of long-term debt and obligations under capital leases -- 31 --------------- ---------------- 621 651 Long-term debt and obligations under capital leases 348 (1) 363 Other liabilities 408 (1) 372 SHAREHOLDERS' EQUITY 1,192 1,077 --------------- ---------------- $ 2,569 $ 2,463 =============== ================ ------------------------------------------------------------------------------------------------ (1) Long-term debt and obligations under capital leases in 2003 were reduced by $8 million representing the fair value of interest rate swaps related to the Company's 8 1/2% debentures due in 2022. The Company's debt, net of cash calculation excludes the fair value of these interest rate swaps which are reflected in other liabilities. - MORE - 6
FOOT LOCKER, INC. Store and Estimated Square Footage - Continuing Operations (unaudited) (Square footage in thousands) ----------------------------------- ---------------------- ---------------------- --------------------- August 2, August 3, February 1, 2003 2002 2003 ---------------------- ---------------------- --------------------- Foot Locker U.S. Number of stores 1,457 1,477 1,477 Gross square footage 5,959 6,008 6,043 Selling square footage 3,465 3,451 3,497 Lady Foot Locker Number of stores 597 614 606 Gross square footage 1,331 1,380 1,362 Selling square footage 738 789 781 Kids Foot Locker Number of stores 361 384 377 Gross square footage 875 922 912 Selling square footage 521 550 547 Champs Sports Number of stores 587 577 582 Gross square footage 3,265 3,252 3,262 Selling square footage 2,273 2,281 2,292 Foot Locker International Number of stores 606 548 583 Gross square footage 1,714 1,540 1,639 Selling square footage 949 871 920 Total Athletic Group Number of stores 3,608 3,600 3,625 Gross square footage 13,144 13,102 13,218 Selling square footage 7,946 7,942 8,037 ----------------------------------- ---------------------- ---------------------- --------------------- -XXX- 7