EXHIBIT 99.1
N E W S R E L E A S E
| | | |
| | Contact: | | Peter D. Brown |
| | | | Senior Vice President, |
| | | | Chief Information Officer |
| | | | and Investor Relations |
| | | | Foot Locker, Inc. |
| | | | (212) 720-4254 |
FOOT LOCKER, INC. REPORTS FIRST QUARTER FINANCIAL RESULTS
NEW YORK, NY, May 21, 2009 – Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended May 2, 2009.
Financial Results
Net income for the Company’s first quarter ended May 2, 2009 was $31 million, or $0.20 per share, compared with net income of $3 million, or $0.02 per share, last year. First quarter results in 2008 included store closing expenses of $3 million, after-tax, or $0.02 per share, and a non-cash impairment charge of $15 million, after-tax, or $0.10 per share. Excluding those items, first quarter net income in 2008 was $21 million, or $0.14 per share.
First quarter sales decreased 7.1 percent to $1,216 million, as compared with sales of $1,309 million for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the first quarter decreased 2.2 percent. First quarter comparable-store sales decreased 2.4 percent.
“The 43 percent increase in our earnings per share versus our adjusted results last year reflects our ability to improve our gross margin rate and reduce our operating expenses, as our sales were affected by the difficult economic environment,” stated Matthew D. Serra, Foot Locker, Inc.’s Chairman and Chief Executive Officer. “The merchandise inventory repositioning strategy that we undertook over the past two years allowed us to achieve the 130 basis point increase in our gross margin rate versus the first quarter of last year. Our first quarter profit was also enhanced by our many expense initiatives that contributed to a $21 million decrease in our SG&A expenses compared to the prior-year comparable period.”
Financial Position
At the end of the first quarter, the Company’s cash and short-term investments totaled $431 million. The Company’s total cash position, net of debt, was $289 million, a $6 million improvement from the same time last year.
During the first quarter of 2009 the Company completed a new, 4-year, $200 million revolving credit facility with its banks. The facility provides additional financial flexibility and includes a provision that would allow the Company to increase the size of the credit facility by $100 million, for a total of $300 million.
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Foot Locker, Inc.112 West 34th Street, New York, NY 10120
Store Base Update
During the first quarter, the Company opened 16 new stores; remodeled or relocated 47 stores and closed 24 stores. At May 2, 2009, the Company operated 3,633 stores in 21 countries in North America, Europe and Australia. In addition, 19 Foot Locker franchised stores were operating in the Middle East and South Korea.
The Company is hosting a live conference call at 9:00 a.m. (ET) on Friday, May 22, 2009 to discuss these results. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website athttp://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 p.m. on Friday, May 29, 2009.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues and earnings, and other such matters are forward-looking statements. These forward-looking statements are based on many assumptions and factors detailed in the Company’s filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company’s merchandise mix and retail locations, the Company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), unseasonable weather, further deterioration of global financial markets, economic conditions worldwide, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business plans effectively with regard to each of its business units, risks associated with foreign global sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.
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FOOT LOCKER, INC.
Condensed Consolidated Statements of Operations
(unaudited)
Periods ended May 2, 2009 and May 3, 2008
(In millions, except per share amounts)
| | | | | | | | |
| | | First Quarter | | First Quarter |
| | | 2009 | | 2008 |
| Sales | | $ | 1,216 | | | $ | 1,309 | |
| |
| Cost of sales | | | 860 | | | | 943 | |
| Selling, general and administrative expenses | | | 278 | | | | 299 | |
| Depreciation and amortization | | | 28 | | | | 32 | |
| Impairment charge and store closing expenses | | | - | | | | 19 | |
| Interest expense, net | | | 2 | | | | 1 | |
| Other income | | | (1 | ) | | | - | |
| | | | 1,167 | | | | 1,294 | |
| Income before income taxes | | | 49 | | | | 15 | |
| Income tax expense | | | 18 | | | | 12 | |
| Net income | | $ | 31 | | | $ | 3 | |
| |
| Diluted EPS: | | | | | | | | |
| Net income | | $ | 0.20 | | | $ | 0.02 | |
| |
| Weighted-average diluted shares outstanding | | | 155.4 | | | | 155.0 | |
Reconciliation of Net Income from a GAAP-reported basis to a non-GAAP basis
(unaudited)
Periods ended May 2, 2009 and May 3, 2008
(In millions, except per share amounts)
| | | | | | | | |
| | | First Quarter | | First Quarter |
| | | 2009 | | 2008 |
| Net income – GAAP basis | | $ | 31 | | | $ | 3 | |
| Additions: | | | | | | | | |
| Impairment charge | | | - | | | | 15 | |
| Store closing costs | | | - | | | | 3 | |
| |
| Net income – non-GAAP basis | | $ | 31 | | | $ | 21 | |
| |
| Net income per share – GAAP basis | | $ | 0.20 | | | $ | 0.02 | |
| Additions: | | | | | | | | |
| Impairment charge | | | - | | | | 0.10 | |
| Store closing costs | | | - | | | | 0.02 | |
| | | | | | | | | |
| Net income per share – non-GAAP basis | | $ | 0.20 | | | $ | 0.14 | |
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FOOT LOCKER, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(In millions)
| | | | | | | | |
| | | May 2, | | May 3, |
| | | 2009 | | 2008 |
| Assets | | | | | | | | |
| |
| CURRENT ASSETS | | | | | | | | |
| Cash, cash equivalents and short-term investments | | $ | 431 | | | $ | 502 | |
| Merchandise inventories | | | 1,237 | | | | 1,391 | |
| Other current assets | | | 215 | | | | 260 | |
| | | | 1,883 | | | | 2,153 | |
| |
| Property and equipment, net | | | 429 | | | | 526 | |
| Deferred tax assets | | | 350 | | | | 239 | |
| Other assets | | | 307 | | | | 417 | |
| | | $ | 2,969 | | | $ | 3,335 | |
| |
| Liabilities and Shareholders’ Equity | | | | | | | | |
| |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 292 | | | $ | 335 | |
| Accrued and other liabilities | | | 201 | | | | 263 | |
| | | | 493 | | | | 598 | |
| |
| Long-term debt and obligations under capital leases | | | 142 | | | | 219 | |
| Other liabilities | | | 383 | | | | 255 | |
| SHAREHOLDERS’ EQUITY | | | 1,951 | | | | 2,263 | |
| | | $ | 2,969 | | | $ | 3,335 | |
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FOOT LOCKER, INC.
Store and Estimated Square Footage
(unaudited)
(Square footage in thousands)
| | | | | | | |
| | | May 2, | | May 3, | | May 5, | |
| | | 2009 | | 2008 | | 2007 | |
| Foot Locker U.S. | | | | | | | |
| Number of stores | | 1,217 | | 1,260 | | 1,332 | |
| Gross square footage | | 4,943 | | 5,150 | | 5,391 | |
| Selling square footage | | 2,936 | | 3,079 | | 3,179 | |
| |
| Footaction | | | | | | | |
| Number of stores | | 329 | | 346 | | 375 | |
| Gross square footage | | 1,545 | | 1,618 | | 1,748 | |
| Selling square footage | | 960 | | 999 | | 1,076 | |
| |
| Lady Foot Locker | | | | | | | |
| Number of stores | | 480 | | 522 | | 553 | |
| Gross square footage | | 1,061 | | 1,163 | | 1,234 | |
| Selling square footage | | 606 | | 662 | | 697 | |
| |
| Kids Foot Locker | | | | | | | |
| Number of stores | | 302 | | 317 | | 332 | |
| Gross square footage | | 725 | | 767 | | 800 | |
| Selling square footage | | 427 | | 455 | | 479 | |
| |
| Champs Sports | | | | | | | |
| Number of stores | | 568 | | 577 | | 574 | |
| Gross square footage | | 3,050 | | 3,120 | | 3,127 | |
| Selling square footage | | 2,039 | | 2,110 | | 2,134 | |
| |
| Footquarters | | | | | | | |
| Number of stores | | -- | | -- | | 31 | |
| Gross square footage | | -- | | -- | | 182 | |
| Selling square footage | | -- | | -- | | 164 | |
| |
| Foot Locker International | | | | | | | |
| Number of stores | | 737 | | 736 | | 733 | |
| Gross square footage | | 2,144 | | 2,134 | | 2,125 | |
| Selling square footage | | 1,096 | | 1,092 | | 1,090 | |
| |
| Total Stores Operated | | | | | | | |
| Number of stores | | 3,633 | | 3,758 | | 3,930 | |
| Gross square footage | | 13,468 | | 13,952 | | 14,607 | |
| Selling square footage | | 8,064 | | 8,400 | | 8,819 | |
| |
| Total Franchised Stores | | | | | | | |
| Number of stores | | 19 | | 13 | | 6 | |
| Gross square footage | | 73 | | 58 | | 18 | |
| Selling square footage | | 49 | | 39 | | 12 | |
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