Foot Locker meets reduced Q1 earnings expectations
Foot Locker in April reduced its first quarter expectations due to a slow start to the period. The New York City-based footwear retailer on Friday reported earnings per share of $1.36 and a 0.5% increase in comparable store sales that both met the new expectations.
"The first quarter was one of our most profitable quarters ever, but it did fall short of our original expectations," said Richard Johnson, Chairman of the Board and Chief Executive Officer. "The slow start we experienced in February, which we believe was largely due to the delay in income tax refunds, was unfortunately not fully offset by much stronger sales in March and April."
Foot Locker posted a 0.7% increase in total sales to $2,001 million, the gross margin rate decreased to 34% of sales from 35% of sales in the previous first quarter, and the SG&A expense rate increased 30 basis points to 18.5% of sales.
In addition, net income was $180 million compared to $191 million in the prior year’s first quarter.
The sneaker retailer is confident in its financial position, having repurchased 546 thousand shares for $38 million in the quarter. Inventory management is also paying off for Foot Locker, according to EVP and CFO Lauren Peters.
She said, “The tight inventory discipline we have maintained over the last several years is serving us well now, because even with first quarter sales that ran below expectations, we believe our inventory is still well positioned to drive improved top line results over the balance of the year. At the same time, we are aggressively reviewing and implementing opportunities to lower expenses as we work to achieve a mid-single digit EPS increase for the full year."
Foot Locker said in April that it continues to expect a mid-single digit comparable store sales percentage increase and now expects a full-year earnings per share percentage increase in the mid-single digits.
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