Specialty athletic retailer Foot Locker, Inc. (FL) Friday reported a 28 percent increase in profit for the fourth quarter from last year, as double-digit sales growth helped offset higher impairment charges. The results also benefited from an extra week compared to last year. Earnings per share missed analysts' expectations, while revenues beat their estimates.
The New York-based company's net income for the fourth quarter was $104 million or $0.68 per share, up from $81 million or $0.53 per share in the prior year.
The latest results include an after-tax charge of $7 million or $0.05 per share for the impairment of certain tangible and intangible assets related to the company's CCS division, while the prior-year quarter's results include an after-tax charge of $3 million or $0.02 per share for the impairment of certain intangible assets.
Adjusted net income for the quarter was $111 million or $0.73 per share, compared to adjusted net income of $84 million or $0.55 per share in the prior-year period. The extra week in the latest quarter contributed $14 million or $0.09 per share to net income. Excluding this benefit, adjusted earnings for the quarter were $0.64 per share.
On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter grew 14 percent to $1.71 billion from $1.50 billion for the same period last year and beat analysts' consensus estimate of $1.69 billion. Comparable-store sales increased 7.9 percent.
As at quarter-end, Foot Locker's merchandise inventory was $1.17 billion, up 9 percent from the same period last year.
For fiscal 2012, Foot Locker's net income rose to $397 million or $2.58 per share from $278 million or $1.80 per share in the prior year. Adjusted net income was $380 million or $2.47 per share, compared to $281 million or $1.82 per share in the previous year.
Total sales for the year increased 10 percent to $6.18 billion from $5.62 billion last year. Excluding the effect of foreign currency fluctuations, sales for the year increased 11 percent. Comparable-store sales increased 9.4 percent.
Analysts expected the company to earn $2.57 per share for the year on revenues of $6.14 billion.
Looking ahead to fiscal 2013, Foot Locker forecasts double-digit percentage earnings per share increase compared to 2012 adjusted earnings of $2.47 per share. Street expects the company to earn $2.84 per share for the year.
Foot Locker opened 85 new stores, remodeled or relocated 198 stores, and closed 119 stores during fiscal 2012.
As at the end of the fourth quarter, the company operated 3,335 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 42 franchised stores were operating in the Middle East and South Korea.
FL closed Thursday's trading at $35.31, up $0.14 on a volume of 2.19 million shares. In Friday's per-market, the stock is down $1.31 or 3.71 percent to $34.00.
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