Athletic apparel and footwear company Foot Locker, Inc. (FL: Quote) reported Friday a higher first-quarter profit, helped by about 9 percent growth in sales. Comparable-store sales rose 9.7 percent from last year. Both earnings per share and topline beat analysts' expectations. The shares rose about 13 percent in pre-market trading.
Ken Hicks, chairman of the board and chief executive officer of the company said, "2012 has gotten off to an outstanding start, with our first quarter results representing the highest level of quarterly earnings in the Company's history as an athletic business."
Foot Locker's quarterly net income increased to $128 million or $0.83 per share from $94 million or $0.60 per share in the previous year. On average, 15 analysts polled by Thomson Reuters expected earnings per share of $0.74 for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter grew 8.7 percent to $1.58 billion from $1.45 billion in the same quarter last year, and also exceeded analysts' estimate $1.55 billion. Excluding the effect of foreign currency fluctuations, total sales improved 9.8 percent.
The company said its gross margin rate increased 130 basis points. and Merchandise inventory at the end of the first quarter was $1.15 billion, 1.1 percent lower than the prior year.
Under its $400 million share repurchase program, the company repurchased 878,700 shares during the quarter for about $27 million.
Looking ahead, Lauren Peters, executive vice president and chief financial officer stated, "Our strong financial position will enable us to increase our investment in what we believe will be high-return growth opportunities, as we pursue the elevated financial goals of our updated long range plan."
In early March, Foot Locker had announced an updated strategic plan and set of operating initiatives intended to further elevate its long-term financial performance for the period 2012 through 2016. At that time, the company said it anticipates to achieve sales of $7.5 billion, net income margin of 7 percent, sales per gross square foot of $500, and EBIT margin of 11 percent.
During the quarter, Foot Locker opened 25 new stores, remodeled or relocated 53 stores and closed 34 stores. As of April 28, 2012, it operated 3,360 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 36 Foot Locker franchised stores were operating in the Middle East and South Korea, the company added.
FL closed Thursday's regular trading at $28.01 on the NYSE. In the pre-market activity, the shares are up 13.1 percent.
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by RTT Staff Writer
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