Despite a 0.3 percent downtick in sales to $1,096 million in the second quarter ended July 31, Foot Locker managed to record $6 million in net income, compared with a break-even result last year. Comparable store sales rose by 2.5 percent, or by 1.3 percent on a currency-neutral basis. The gross margin rose by 2.3 percentage points to 27.8 percent.
The company said the earnings improvement was primarily driven by a 2.3 percentage point gain in gross margins as a result of a much better inventory situation that enabled it to drive higher margin sales, be more selective in its promotional activity and be more responsive to fashion trends. Inventories were $1,219 million, down by 5.1 percent, indicating continuing improvements in inventory per square foot. Foot Locker ended the quarter with 3,476 stores, 24 net less than the beginning of the fiscal year as it opened 27 and closed 51.
