Foot Locker is back on track after a lackluster 2017, beating second quarter Street forecasts amid improved inventory management.
Net income totaled $88 million, or $0.75 per share, for the period ended August 4, compared to net income of $51 million, or $0.39 per share, in the prior year. Analysts had expected earnings of $0. 70 per share.
Total sales rose 4.8% to $1.78 billion, besting analysts’ estimates of $1.76 billion. Same-store sales inched up 0.5%.
“Our performance reflects the work we are doing on several fronts to position the company to succeed in a rapidly evolving retail environment,” said Richard Johnson, chairman and CEO. “We remain optimistic that our improving product flow and depth in premium styles positions us to deliver stronger comparable sales growth in the second half of 2018.”
The company’s gross margin rate increased to 30.2% from 29.6% a year ago, while the SG&A expense rate increased to 21.3% from 19.9% last year.
“We are encouraged by the results we delivered, including a return to growth on the top line combined with gross margin expansion,” said Lauren Peters, executive VP and CFO. “We maintained our disciplined approach to inventory management in the second quarter, which is enabling us to flow improving merchandise assortments into the business for back-to-school and the holidays.”
During the second quarter, the company opened 13 new stores, remodeled or relocated 33 stores, and closed 21 stores. As of Aug. 4, Foot Locker operated 3,276 stores in 24 countries in North America, Europe, Australia, and New Zealand. In addition, 107 franchised Foot Locker stores were operating in the Middle East, as well as 10 franchised Runners Point stores in Germany.