Foot Locker Second Quarter Results Top Estimates

(RTTNews) - Athletic apparel and footwear retailer Foot Locker, Inc. (FL) reported Friday a profit for the second quarter that increased 29 percent from last year, reflecting sales growth. Sales at established stores also grew 9.6 percent. Both earnings per share and quarterly sales topped analysts' expectations.

"We extended the momentum with which we started 2015, generating outstanding quarterly sales and profits in the second quarter. We continued to achieve broad-based and consistent strength across geographies, banners, channels, and categories," President and CEO Richard Johnson said.

The New York-based company reported net income of $119 million or $0.84 per share for the second quarter, higher than $92 million or $0.63 per share in the prior-year quarter, which included $0.01 per share of impairment and other charges.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimate typically exclude special items.

Sales for the quarter increased 3.3 percent to $1.70 billion from $1.64 billion in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $1.66 billion. Excluding the effect of foreign currency fluctuations, total sales improved 9.9 percent.

Comparable-store sales or sales at stores open for at least for a year, increased 9.6 percent.

Gross margin rate for the quarter expanded 60 basis points to 32.6 percent of sales, and selling, general, and administrative expense rate improved 140 basis points to 19.5 percent of sales from the year-ago quarter.

Merchandise inventory at the end of the second quarter stood at $1,317 million, up 1.3 percent from the end of the year-ago quarter. At constant currencies, inventory increased 3.3 percent.

During the second quarter, the Company opened 21 new stores, remodeled or relocated 65 stores, and closed 21 stores.

It ended the quarter with 3,419 stores in 23 countries in North America, Europe, Australia, and New Zealand. Additionally, it had 48 franchise stores in the Middle East and South Korea as well as 27 franchised Runners Point and Sidestep stores in Germany and Switzerland.

"With the strong top line gain, the team at Foot Locker was able to flow the incremental sales dollars through to the bottom line at a very healthy rate, leading to good progress on all of our long-term goals," CFO Lauren Peters noted.

FL closed Thursday's regular trading session at $71.72, down $1.76 on a volume of 2.49 million shares. In the past 52-week period, the stock has been trading in a range of $51.12 to $74.95.