Excluding non-recurring charges, net earnings improved by 32.1 percent at Foot Locker in the fourth quarter ended Jan. 31. Sales went up by 14.0 percent to $1.71 billion. Comparable store sales rose by 7.9 percent for the period, driven more by basketball than running in the U.S. They were up in the mid-single digits in Canada and the Asia-Pacific region, but flat in Western Europe, where many customers are switching from running to basketball styles.
Adding extraordinary items, the company's quarterly net income was still up by 28 percent to $104 million. The items included a $12 million impairement charge for CCS, a chain of skatewear shops bought in 2008 for $103.2 million. Foot Locker has decided to close all its 22 CCS skatewear stores in the U.S., keeping only the CCS website for online sales.
For the full year, net earnings showed a 43 percent gain to $397 million. As previously reported, sales increased by 9.9 percent for the year to $6,182 million, with a currency-neutral gain of 11.4 percent, thanks in part to the addition of an extra week of trading. The management is predicting that Foot Locker's ongoing momentum will allow it to deliver again a double-digit improvement in profits this year.
Foot Locker plans to use part of its higher investment budget this year to open between 70 and 75 new stores, of which 30 to 35 will be in Europe. It also plans to revamp its distribution centers in the U.S. and Europe.
In the past year, the company opened 85 new stores and remodeled or relocated 198 others, but it closed 119 doors. In Europe, 34 new stores were added in the past year, and online sales were extended to a total of eight countries. As of Feb. 2, Foot Locker had 3,335 stores in operation in 23 different countries.