Foot Locker reported net income of $158 million for the 13-week period ended Oct. 30, after extraordinary charges of $57 million. Excluding one-time items, the adjusted net income increased by 57 percent to $201 million. The net results compare with $265 million in the year-ago period and $125 million in the same quarter of 2019.
Total revenues went up by 3.9 percent to $2,189 million, with increases of 3.6 percent in local currencies and 2.2 percent on a comparable store basis. Sales were also 13.3 percent higher than those that had been reported for the third quarter of 2019. Sales grew at a double-digit rate at Foot Locker Europe and in the high teens at Sidestep, due to the pent-up demand in the region.
Accounting for 19.8 percent of total revenues, e-commerce declined by 4.6 percent as compared to a year ago, when it jumped by 50 percent. Three million new members joined the FLX program, taking the total to more than 28 million, aided by the start of the program in Italy, Germany and Spain.
In spite of ongoing supply chain challenges, the gross margin expanded by 3.8 percentage points to 34.7 percent, which was attributed to “a combination of robust demand and fresh inventory, coupled with more full-priced selling.”
The management indicated that Foot Locker has enough inventories to meet the demand for the holiday season, but admitted that it will continue to suffer from supply chain disruptions tat caused its sales of footwear to decline by a low single-digit rate in the latest quarter. Sales of apparel and accessories went up.
The company is guiding for full-year revenues to increase by a rate in the high teens, with a mid-teens expansion on a same-store basis. The gross margin is expected to grow by between 5?4 and 5.5 percentage points.
For the first nine months of Foot Locker’s financial year, sales of $6,617 million were up by 23.5 percent as compared to the same period a year ago and up by 14.4 percent from the first nine months of 2019. Compared with a year ago, sales were up by 21.3 percent on a same-store basis and by 21.7 percent in terms of constant currencies.
During the latest quarter, in addition to the acquisition of 93 WSS stores, the group opened 32 new stores, remodeled or relocated 29 others and closed 80 stores including 32 closures and 18 conversions at its Footaction chain. It ended the period with 2,956 stores in 27 countries with a total selling area of 8,146,000, up from 7,492,000 a year earlier, plus 136 franchises in the Middle East.
The number of Foot Locker stores in Europe declined to 616 from 624 on Jan. 30, while the number of Sidestep stores rose at the same time to 79 from 76.
