SUBSCRIBE | AD OPPS | ABOUT US | CONTACT US | SITE MAP
SGB
Web
 




 >   ASR
>   Bicycle Retailer
 >   Fly-Fishing Retailer
 >   Health & Fitness Biz
      Interbike
 >   Outdoor Retailer
 >   Smart Supplier
 >   Sporting Goods Business
 >   Sporting Goods Dealer
 >   VNU Expo
 Breaking Headlines

Foot Locker 3Q Sales Rose 3%; But Hurricanes Will Trim EPS

NOVEMBER 03, 2005 -- Foot Locker reported 3Q sales of $1,407 million vs $1,366 million in the comparable period last year, an increase of 3.0%. For this same 13-week period, comp-store sales increased 2.7%. However, the chain warned its 3Q EPS will be lower than expected due to hurricane damage.

YTD, sales increased 7.0% to $4,088 million. Comp-store sales for the first nine months increased 2.2%. Excluding the effect of foreign currency fluctuations, total sales for the 13-week and 39-week periods increased 2.6% and 6.2%, respectively. Comp-store sales in 3Q reflected a mid-single digit increase at its combined US businesses, led by strong increases at Footaction and Champs Sports. International operations posted flat comp-store sales, including a very low-single digit decrease at its European stores.

"Our recent merchandising initiatives at our European business have contributed to an improving sales trend during the third quarter versus the first six months of this year. These initiatives included increasing our promotional posture in select European markets - a strategy designed to reduce our inventory growth rate and better compete in a more competitive environment. This initiative also led to a lower division profit margin in Europe, albeit at a rate still anticipated to be in the low-double-digit range. Additionally, our increased promotional strategy in Europe has contributed to our expected consolidated third quarter gross margin rate being lower than the same period of last year," stated Matt Serra, COB/CEO.

Another significant challenge during 3Q was dealing with the destruction from Hurricanes Katrina, Rita and Wilma. A charge of $4 million, or 2¢ per share, was recorded in 3Q05 to write down merchandise inventory and fixed assets that were destroyed as a result of these storms, net of anticipated insurance proceeds. The company continues to work with its insurance broker and carriers in regard to the terms of its insurance coverages related to these storms, and expects to collect much of its sustained losses, which may result in the charge being reduced in a future reporting period. Additional charges, net of credits, totaling $3 million, or 1¢ per share were recorded during 3Q primarily related to the potential insolvency of one of the company's third-party insurance administrators and the settlement of litigation proceedings.

Serra concluded, "We currently expect our third quarter net income per share from continuing operations to be in the range of 39¢ to 41¢. Third quarter earnings per share from continuing operations of 42¢ to 44¢ would have been expected without the 3¢ per share unanticipated charges outlined above."


SAVE | EMAIL | PRINT | MOST POPULAR | RSS | REPRINTS
SUBSCRIBE TO SPORTING GOODS BUSINESS »


Related articles
ipso Names Community Manager For Running, Fitness, Team Sports and Triathlon
Op To Offer NBA-Licensed Swim, Beachwear
Hoist Recalling 48,000 Exercise Benches
View more related articles

Quick links: One-click access to topics in this article.

Categories
Sporting goods industry
Profits
Earnings
Comparable-store sales

Companies
3Q Inc.
Foot Locker Inc.
Footaction

Concepts
comp-store sales
Foot Locker
share from continuing operations
anticipated insurance proceeds
litigation proceedings

People
Matt Serra
Wilma





 Breaking Headlines
Nike Teams Up With Apple on Wireless Training Device
MAY 23, 2006

Yakima's CEO Resigns
MAY 23, 2006

Ted Ganio Named Dir of Merchandising at Mountain Hardwear; Paul Kramer Retires
MAY 23, 2006

Everlast Worldwide Inc. Partners With the Breast Cancer Research Foundation
MAY 23, 2006

Dallas Couple Face Jail For Selling Hundreds Of Thousands Of Stolen Sporting Goods On eBay
MAY 23, 2006

Shorts...5/23/06
MAY 23, 2006

L.L. Bean To Open First New York Store
MAY 22, 2006

Golf Galaxy Lowers Its Guidance
MAY 22, 2006

Shorts...5/22/06
MAY 22, 2006

UK's Ashley Buying In Clothing Chain
MAY 22, 2006


© 2006 VNU eMedia Inc. All rights reserved. Terms Of Use and Privacy Policy.