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Today's news...8/2/05
AUGUST 02, 2005 --
Foot Locker Stumbles In Europe
Europe used to be Foot Locker's cash cow. But now with economies suffering throughout the Eurozone, the chain is facing problems beyond its control, as well as stiff local competition. Foot Locker reported 2Q sales of $1,306 million, an increase of 3.0%. For this same 13-week period, comp-store sales increased 1.3%.
But Foot Locker cut its EPS 2Q estimate to a range of 27¢ to 29¢ a share vs a 35¢ average estimate of analysts polled by Thomson First Call.
For the YTD, sales increased 9.3% to $2,682 million from $2,454 million. Comp-store sales increased 2.0%.
Excluding the effect of foreign currency fluctuations, total 2Q and YTD sales increased 2.2% and 8.2%, respectively.
2Q comp-store sales reflected a mid-single-digit increase at the company's combined US businesses, led by a double-digit increase at Champs Sports. Comp-store sales results at the operations were mixed with the Canadian and Asia/Pacific stores posting very solid mid-single-digit increases, which were more than offset by a high-single-digit decline at the company's European stores.
"While our European business remains productive, generating a double-digit profit margin, our recent financial results in this region were below our expectations and very disappointing," stated Matt Serra, CEO. "Second quarter profit at Foot Locker Europe declined from the comparable period last year, more than offsetting the combined profit increase generated by our other divisions. Therefore, we currently expect earnings per share for the second quarter to be in the range of 27¢ to 29¢.
"Or US usiness, in contrast, has had improving sales and profit results. We continue to be encouraged with the building sales momentum at Footaction, whose results will be included in the copany's comparable-store sales beginning in the third quarter of 2005."
Rocky Changes Corporate Name To Rocky Brands
Seven months after acquiring EJ Footwear, Rocky Shoes & Boots has changed its corporate identity to Rocky Brands effective immediately, announced Mike Brooks, CEO.
"Since adding EJ to our family, we have been working on the strategy to best present all of our brands to our employees, the retail community and consumers," said Brooks. "With the name Rocky Brands, we are able to maintain the significant equity we have in the Rocky name while also articulating that we now have a full complement of products and branded lines as part of our offerings."
The Rocky Brands portfolio now includes owned brands Rocky Outdoor Gear, Georgia Boot, Durango Boot, Lehigh Safety Shoes, Remedy and Gates. Its licensed brands include Dickies and Barclay After Six.
Experience Works, a national nonprofit organization that helps older workers get the training theyr need to find good jobs in their communities, Recognized Dwight Hauff, Hauff Sporting Goods, Sioux City, IA, as the '05 America's oldest worker. The 100-year-old Hauff, who was recognized at May's NSGA Mnagement Conference, still goes to work several days a week. In '86, he was inducated into the Sporting Goods Industry Hall of Fame. He will be honored in Washuington in September.
OutDoor '06 changed its dates for '06, The show will be held July 23-26, three days later than originally planned because ispo Summer in Munich had to change its '06 dates to July 16-18 due to the World Cup matches to be held there. The Cup will take up the city's hotel rooms.
Analyst John-Paul O'Meara of Dresdner Kleinwort Wasserstein downgraded Adidas-Salomon from buy to add. The 12-month target price has been raised from EUR 155 to EUR 165. The analyst mentioned that the downgrade in rating is based on valuation. Adidas-Salomon is scheduled to report its 2Q05 results tomorrow and is expected to post robust 2Q result, the analyst said. According to Dresdner Kleinwort Wasserstein, the company is likely to achieve operating margins of +11% in the medium term.
| | | | | REPRINTS
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Categories
Sporting goods industry
Profits
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Corporate identity
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Asia/Pacific
Footaction
EJ Footwear
Rocky Shoes & Boots Inc.
Experience Works
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double-digit profit margin
profit increase
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Foot Locker Europe
Locker Stumbles
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Dwight Hauff
Mike Brooks
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