World Footwear

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Net income bounces by more than 850% at Foot Locker

Sep 6, 2021 United States
Net income bounces by more than 850% at Foot Locker
The footwear retailer reported net income of 430 million US dollars for the second quarter, as compared with net income of 45 million US dollars in similar period last year
"Our strong performance this quarter reflects the health of our category, the deep engagement we have with our customers, and the strategic nature of our relationships with our vendor partners", commented Richard Johnson, Chairman and Chief Executive Officer, adding: "This quarter reflects strong results in our women's and kids' footwear business along with broad demand for our apparel and accessories offerings, which combined with more limited promotional activity, led to the outstanding top and bottom line results."  

Second Quarter Results

Foot Locker reported net income of 430 million US dollars, or 4.09 US dollars per share, for the 13 weeks ended on the 31st of July 2021, as compared with net income of 45 million US dollars, or 0.43 US dollars per share, for the corresponding prior-year period, and 60 million US dollars, or 0.55 US dollars per share, earned in the second quarter of 2019. 

Second quarter comparable-store sales increased by 6.9%. Total sales increased by 9.5%, to 2 275 million US dollars in the second quarter of 2021, compared with sales of 2 077 million US dollars in the same period last year. Excluding the effect of foreign exchange rate fluctuations, total sales for the second quarter increased by 7.3%. As compared to the second quarter of 2019, total sales increased 28.2%.

"Many of the trends we saw in the first quarter continued into the second quarter, with the combination of robust demand and fresh and lean inventory driving meaningfully lower levels of promotional activity and resulting in a gross margin of 35.1%, compared to the 25.9% in the prior year period," added Andrew Page, Executive Vice President and Chief Financial Officer. 

Year-To-Date Results

For the first six months of the year, Foot Locker posted net income of 632 million US dollars, or 6.02 US dollars per share on a GAAP basis, compared to a net loss of 65 million US dollars, or 0.62 US dollars per share, for the corresponding period of 2020.  

Year-to-date sales were 4 428 million US dollars, an increase of 36.1% compared to the sales of 3 253 million US dollars in the corresponding 6-months of 2020.  Year-to-date, comparable store sales increased by 33.4%, while total year-to-date sales, excluding the effect of foreign currency fluctuations, increased by 33.4%.


Store Base Update

During the second quarter, Foot Locker opened 16 new stores, remodeled or relocated 23 stores, and closed 57 stores.  As of the 31st of July 2021, Foot Locker operated 2 911 stores in 27 countries in North America, Europe, Asia, Australia, and New Zealand.  In addition, 134 franchised Foot Locker stores were operating in the Middle East.  

Financial Outlook

Andrew Page added "we exited the quarter with positive momentum and are cautiously optimistic about the outlook for the back-half of 2021. Recognizing we are still operating in an uncertain environment due to COVID-19, we continue to keep a close eye on the business, including temporary store closures and supply chain challenges, and we remain disciplined with expense management".

Image credits: fortune.com

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