FL - Earnings call transcript Q3 2018

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Operator

Good evening, ladies and gentlemen, and welcome to Foot Locker's Third Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. This conference call may contain forward-looking statements that reflect management's current views of future events and financial performance. Management undertakes no obligation to update these forward-looking statements which are based on many assumptions and factors, including the effects of currency fluctuations, customer performances, economic and market conditions worldwide, and other risks and uncertainties described more fully in the company's press releases and in reports filed with the SEC, including the most recently filed Form 10-K or Form 10-Q. assumptions results could those may the statements. such results, significantly contained in forward-looking actual and differ changes or produce factors different in Any materially from conference recorded. Please is that this note, being the call and Finance I will Relations. now over Jim President, Investor Lance, to Corporate Vice turn Mr. may you Lance, begin.

Jim Lance

quarter Thank Welcome third Foot call. Locker, to Vincent. conference you, Inc.'s everyone earnings

matter $X last compared share reported effects of in results is year. release. of these Reform was and provisions third U.S. is million in charge $XXX pretax in a million and previously of Bill in income net $XX pension of the basis, due have million divisional as GAAP million of today's incremental As pretax corporate $XX a year's press $X.XX earnings to disclosed, third in reducing several the $X.XX an in third On press benefits Included by share the to from quarter to detailed this reorganizing reported quarter income last share Tax tax quarter million release, the Included to year's in of staff. compared the litigation we company net per per $XXX of our last the XXXX. adjustments year's to per offset related charge today's

today's and of X% in is figures items results. A on the non-GAAP last versus increase non-GAAP year's will GAAP press a mentioned were earnings release. otherwise be to results $X.XX call share, noted, today these Excluding share. on per an non-GAAP quarter during basis, reconciliation included $X.XX based per Unless our third rates

highlights for on who from Foot update provide some fourth quarter prepared Vice and quarter. Johnson, Officer, remarks ongoing Executive Financial performance. and on and third financial along financial Chairman provide will Dick We will results details quarter provide Officer, outlook President Executive our our Locker's with initiatives who our Chief Lauren the our Chief with third Peters, will our begin an

we lot with to have So cover. that, a

started. get let's So Lauren?

Lauren Peters

appreciate Thank that ahead able you, of join to I us festivities. holiday Jim, were you of everyone. all and good tonight evening your

is our best in the company sales full our see This reflects as price the solid our a result, it improvement this in generated building period the year, results margin quarter, that especially gain noted a with the with comparable during included of the during press It our our previous third momentum gross and expectations. As more selling above we business. X.X% in line guidance. afternoon, release

gains the sales sales we saw digit accelerate August by in move comparable gains mid-single single up digits as by we Looking month, our and October. followed at comp September nicely through the quarter both, with low

the slightly reduced XXrd August, Our $XX in by during shift as about call we QX total reported week quarter; sales previous the in our million. on mentioned declined sales

In dollar sales impact $XX is foreign by addition, the from million. reduced currencies typically the stronger

demonstrates the Excluding up gains these at connecting pleased This digital, and serving once been. factors, customers them, importance X.X%, total both solid our sales of we and up across they again that reported channels our choose comps have sales to I'm to with stores, produced X.X%. shop. report however, with would

our traffic by was a quarter, total Traffic down single our story led the increase at improvement was U.S. digits. was international The As for sequential banners. DTC this XX.X% of last percent up from banners store one year. sales, a XX.X% also with modest of at low quarter

while up were ticks. Locker progress sales still were at Average improvement apparent Foot While few and the Europe trends continue down it higher, units move over unit in period an footwear with in was footwear a to selling notable prices also challenge, stores. both prior a apparel;

increase. single-digit in gain turned our it's business; a to six at positive posting comp low first families quarters footwear Looking with

women's slightly. basketball up quarter, the continued was While while low as was had comps hats from comp Men's second was mid-single double-digits. kids fueled the get up assortment gain. double-digits. and single-digits, up footwear mid-single trend were and seasonal a comp socks comparable by double-digits from Meanwhile did a digit another running such Men's casual our sales performer Accessories the trend quarter. was up and and digits, down [indiscernible] single-digit including better as styles the Within comp in boots with down solid branded such strong apparel business assortments. gain strongest high with posting

size our mentioned Turning to was it I with across banners up and ranges. our apparel single-digits geographies, of that business; gains most high strong

declined Foot while was by down apparel In ongoing slightly men's women's while America strong international children's down single-digits. way, Europe In a at solid Jordan were due led digits, up increase mid-single Pacific saw progress markets. Locker our gains Locker Shifting we gains. performances Foot was Foot single-digit. across generated banners; to which have mid-single primarily across by we pleased international the and America, our and Locker Bay Foot and low footwear up Sports posted reset. East each apparel. our high the U.S., Action markets, business a Locker North a was while strong mid-single and Champ double-digits, Foot to each single-digit low SIX:XX was and up low Canada, Runners mid-single-digits. gain Locker the gain, digit, driven digit down Kids high Foot posted Sidestep North Point apparel Our with single-digit now single-digit comp

with sales. at we see of energy new some Kong opening well comp Hong in our of included Finally, did lot Asia encouraging Singapore, stores in sales, a our the grand not and along

of Moving with by progress which XX.X% rate basis a basis to exceeded points. on This was expansion improving improved by XX income from sales sales was ago. a margin margin points gross the our XX% expectations coupled strong achieved on our with the XX the with which of year statement; the merchandise rest to

week. due I the the mentioned costs reflects shift buying basis mostly fixed Our of XXrd occupancy impact compensation previously and sales XX delever year's last by this did points, to

have rate, meaningfully progress The the occupancy. contributors our an offset partially impact initial biggest the in continuing markets. was The to mix to offering. were part by buying European The market this IMU and promotional in pressure markdowns. we which levered of was our progress environment merchandise lower the lower Excluding private benefited rate banners due U.S. lower in would from the label

Our SG&A expense points last quarter XX.X% XXX by rose basis to rate in of the from sales year. XX.X%

same of and and higher previously the In making shift, the the you investments addition to incentive the week with including the are compensation. we discussed XXrd have impact SG&A logistics, digital of higher spend, drove capabilities we many our in drivers

of includes In expense accruals. On reversed company's we previously some last to incremental basis accruals comparison, basis, As plan. the bonus XX our we bonus more year's residual called out, year year-to-date is points. to bonus SG&A the due normalized relative the impact a this performance

depreciation Our was expense million last to $XX the year. for period, flat

due rates last a reached our On cash to income income basis, million year. at the holdings. interest in $X higher tax our from GAAP came down XX.X% rate interest While XX.X%,

adjustments benefits to rate close related in noted, Reform as today's As to included the adjustments, rate. last our A federal Jim adjustments GAAP non-GAAP excluding well tax landed a Tax U.S. benefited as quarter Bill, year's to tax On at is non-GAAP those press this from XX.X% lower reflecting our from these corporate reconciliation release. expectations. the income

leaving $XXX X.X our QX We a million, shares $XXX million million balance cash approximately and cost of to about under year. on $X.X million a we decrease the million end of about $XXX of the Turning for Year-to-date repurchase with million and repurchased we the cash quarter of shares in authorization. last million $XX from sheet; $XXX ended quarter our billion available equivalents, spent $XXX repurchase to have dividends. quarterly almost share X.X million the

shareholders in have million we our million. dividend into million. of to were Capital changes We previous $XXX due the in total $XX million XXXX addition, reduction with from the to X of from timing our guidance million through program. the expect cost in quarter The to $XXX expenditures In now shifting to XXXX. returned through XXXX, first our down year $XXX spend primarily is months our project $XXX bringing

we fleet, a with third the company-owned end XX stores, ended quarter. quarter of from Looking the second X,XXX at the of the store decrease

stores store we and in brings XX of Singapore countries closed operated the and XX opened in stores, power of X we quarter Hong number end the the this including QX at Kong, X in During to new XX.

on to is XXX a XXX follows: to which or For annual a On XX X.X% a increase we Gross points. QX, an to slight XXX expected position start low the to relocate last by year comparative for a the mid-single and of XX-week the this a shift, backdrop, year. The us is expanding stores, guidance. approximately XX-week now to basis additional close improve with XXX earlier to to to to compared as compared than currency remodel and sales to low by inventory receipts and the to compared of a falls is digits we margin week at X.X%. holiday selling XX-week began increased single-digit is stores. of of XXX leveraging basis to holiday the expenses, fueled Thanksgiving basis, of to last SG&A margins about open rate sale. XX to a that Spain XX unfold comparison this last comparable period, increase. Due X.X% basis up quarter merchandise prior decrease increase now year's compensation strategically buyers greatness. of XXX our expect as of a quarter by we compared constant XXX past the basis X.X% third expected XX-week improvement. stores points basis year's occupancy the decreased this to to as fourth now are and equivalent points XXX which slowed overall the With kick-off for Inventory increase likely be to Saturday the point sales an year, us expect end of equates quarter reported week sales over

and the basis. million once QX, in margin quarter. points, XX-week basis for impact solid week gain with total, gross accruals for a Bear EPS quarter. and on bonus will the this expected For double-digit XXrd both shift fourth the a is out In $XX mind, headwind a fourth both, be of shifting SG&A, in results XX-week from a the again XX

sales. for a our year-to-date our have results, When comparable top comparable we line building Finally, including remain gave we move gain now on-track digit through fourth turn guidance slight you including call to our we With a a low-single XXXX, in year-to-date I'll to add the the you double-digit over to quarter achieve for annual our the the that, we expectations momentum seen year, bottom sales gain. increase and and Dick. EPS as

Dick Johnson

our sales comparable of differentiates journey youth partnerships to good beginning QX I'm inspire top continuing company increasing through the with strong bottom and improvement top laid the the consumers, Thank everyone. on incredible had us. believe pleased depth and that in accelerating and footwear QX. to quarter and performance turning our bringing and the QX led drive our focus and we QX. in in position in-store, stronger XXXX, we starts with these world line. But digital our assortments. our pursuing It and strategies out are even of team's strategic deliver and to evening, empower At positive the to positive efforts we beyond reflects our productivity Yes, you, in Lauren, what to then of of trending sequential line the This for in our momentum commitment to we the brands and strength culture. expectations all and each improved third results and line with breadth best the with even maintaining with expectations, our experiences quarter a virtual year, that, some are apparel

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are Nike the experiences of Recent XXs past deliver this other XXth include social were services examples Air collaboration is the to Tuned season our that products, In is celebrating new consumers platform local expression exciting the as exclusive well this the quarter, best that we close seen media never franchises. included campaign, versions serve. the the exclusive periods to First, the released activations. of showcase have Your which Anniversary franchise, packs Origins silhouettes inspired some Frequency Air the best-sellers exciting to which Discover that's and around holiday Air with Packs, globe all, This Max a of along content been of third number some which with are iterations. we and the us distinct some OG and we incredible relevant includes our that the and with new But as with before. not great allows

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moments. is a of from athletes Converse. be will pop-up Jordan unique basketball fans the footwear that a shop launches It Courtside Nike, to used maker's around access during This country obsessed House Hoops exclusive outside spot. included basketball. First, basketball the experience and opportunity Centers customization provides experience the could the and our mobile around products alter the on Nike with generated concept and deconstruct launch them The Staples reshape then right excitement believe an initial great of designer to space presents where certain Courtside we energy consumers the the it and key

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on. that relevant Our concepts cities personal includes The Adidas a also the had past our experiential time with help collection versions Made toolings that them concept brought been strategic different to NMDs connect icons partnership some us the from The Never distinct new Boost. printed basis. an on with printed are combinations. that executions Adidas reimagined featuring unexpected back with was consumers boost and sought-after ever most innovative series Ultra printed and [Indiscernible] of on of of first

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are of We updating process also the our mobile apps. in

now new reimagined consumers, Foot provide our improved released initial the the experience these the Foot we and seamless more and and Locker a mobile launch, apps to exciting of Action features. create new Locker. other apps Similar product Our for was app new Kids have for Foot updates presentation websites,

as a our of XX to reality The also augmented the Foot create first chance the that more called buy be app shoe, during let's Hunt LA within The to launched customers gave Hunt. of feature city our first sneakers. interactive reality an reveal the this The the clues targeted limited-edition new throughout Locker unlock to LeBron new one use We Hunt have geo uses is one game first the app buy fans the to augmented initiative shopping a game a that This he pair a engaging wore their Locker Foot experiences. opportunity Laker. coveted to

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about and in be we proceed about take we learn and have are is geography. This will early move days a as long-term the to we we deliver spend what thoughtful always, and we marathon, to However, much forward. success investment the across as the how dollars it will

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solid our where Before with a businesses are Foot women's, apparel our consumers. Locker, overall the resonating third on had Q&A. I'm we and on improvement by most Eastbay highlights. geographies. banners, of across hit Champs we improved going footwear our few and the quarter. across encouraged to quarter performances our during to and I'm the delivered North Within move of results strong assortments America, Across

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business. improving men's an We also saw

quarter global our quarter, on-trim fourth breadth this improvement Greatness along addition exciting holiday powered depth the business including styles connection and believe we long-term not In should the at described. and also further that during developing believe life partners, coming growth performance us. progress being year's the are are third with the Week our trends we further opportunities the emotional well. from of was that summary, resting, to strong premium the many positive in the unique in will of with vendor of offerings for drive a continue to the is consumers. collaborations the this available as the and product quarter Looking cool by the product beyond, our good into But products [indiscernible] are one to excited we I have about fourth a we're We

As hard the I unique most sought-after destinations. I dedication. having on experiences consumers to stores in partnering with even With and and all associates to and brands of our our world work and incredible improving discussed, making best exciting these the through storytelling our deliver their progress more digital want products that, assortments, to bringing and innovative thank the capabilities include for

We Thanksgiving open and for inspire journey are all and be to associates' and all our without on Happy you creating your that memorable questions. thank also possible happy up of you and customer youth want shopping. wish a empower I culture would experiences. families the passion a not you can for to Operator, call now of and

Operator

[Operator from Instructions] Wells Your [ph] Tom of comes question from line the Fargo. first

Unidentified Analyst

bit. like I'd guess Europe about to I a talk for

broader in market about pretty the big of business North the Your of and bit some seen Europe, based brands good, America we've a about but see cautious little European there how surprised out soft was sneaker been a lot has And Europe footwear trend to versus commentary the some improved had apparel there's being Europe. it in the quarters. trends last much I was and couple

a bit? bit you were apparel of Thanks. drivers some struggling footwear a little the of able European you and the give a in QX, improvement us if whereas little based to European just of are color other about of and So, sort lot how see could business, businesses

Dick Johnson

job story with out than it's right in they the turn be are in getting and flipping ran driving positives, little Disruptor bit higher done Fila styles nice in a saw higher we it And Nike we of kids' inventory their we as half, a So Europe Air like, we'd Europe of positive. the really, the some saw apparel now, the we we've sync real business. and mentioned, that the markdowns back talked early, we our still a the been certainly saw improvement strongest, has business they been expected we've were about, good women's their Lauren happening, team like same inventory, right things markdowns that ran in Max over the has to but in a on it's yet not were perfect,

So Locker Foot a right the moving Europe lot of our direction things banner. in

Unidentified Analyst

could the from with the marketization one about I Adidas brand to of obviously if been pairs lot Easy And and they're up more, a talk just there's follow put more of starting into about a the marketplace. little if you just a bit you that months potential Thanks. next the Can driver that business XX the or as so? and over talk of see

Dick Johnson

I think we've scarcity what been drives that clear all really along is consumer. our

to So, Easy scarcity more and positive throttle the I on the is brand certainly doing the think with a making Adidas accessible and and for you have control that the is it product bit it and the business. at internationally ago and and here weekend, increase. a the customer's demand continues had the We over easy to we as last in week America North peers, launch have look we've

throttle, good Adi the really think it So sort opening of I and up doing this think little going with -- controlling I is right bit that seeing of into holiday season. scarcity availability a finding key is model suddenly job of that a

Operator

on line a Paul Trussell question. Bank is with Deutsche from the

Paul Trussell

worth know little here really noting? drove thoughts and XQ, in and basketball kind the I'm up you the the you of for as along some you a particularly in assortment, around know talk and are of of kind apparel the about in confidence gives standouts any categories interested Just the guidance to other bit improvement breadth the quarter went key of improvement depth what more

Dick Johnson

that lot we see continuing positives into I of a the QX. on hit

excited XXth years our about anniversary that the the do You Tuned And we've and appropriately around every over Air. business but company know, buyers Air platform Air, we're that right, millions market launch mean, best got we virtually Tuned Tuned our Pack the passionate Max the sellers, XX to and of Max, concept celebrate Air going most is QX Nike, some globe Pack in I'm in. we've Max of to singular Air of sold of platform Frequency Origins from and I important. upon Vapor a millions in the XXXs Obviously, pairs Your probably as were

we've improvement those just So us heading if business of really off to brands been some there's across pipeline in all from depth very our some starting things brands things total are a positive, the to our the the Apparel resonance is we've really of consumer, to in important have lot our will, and start, we're a Fila, also Vans, volume, very into a positive, Champion secondary those on are some smaller lot shoots seen has so but flow brands breadth K-Swiss, with we apparel testing front, geographies. quarter you of continuing fourth product T business, the see Graphic great green seen that a Fleece and to

confidence that up pick a that's the line So Lauren to that bit on mentioned. little comp

Lauren Peters

product with as with product customer. our experiences well delivers on We that so bring really that suppliers storytelling that partnering why find are and our product to some and to about it special, combining really can meaningful powerful unique our customers just anywhere

Paul Trussell

you double-digit Lauren, fourth earnings growth. then for mentioned And quarter guidance

think as in just we we taking you just bigger the forward? we that remodels, can to the get try to may wanted place thoughts of capabilities, digital about that? as inning an that, investments in XX, point on leverage expound and in clarification some upon standpoint And around are be then where from Just marketing, form XX to details store if more is getting a picture, of weeks, SG&A back just some going growth

Lauren Peters

and basis SG&A try double-digit the and XX-week our should we on margin helpful to guidance the on XX-week by on guidance both the to XX-week EPS giving you elements that get gross QX Paul, be with basis.

frame know it So, how up to in your I digital, questions of innings in terms around investments don't on innings.

they practically digital-lean get customer, deliver we're beats their expectations, that in just don't with we them connected can we native, their know frankly, I hands. make stuff cool providing a things it screen an quite their and have They We -- like to their delivers young pretty with that's experience expectations that and on so sure need born resonates customer. our and more a

allow as it And as would when investments are also really and two our to we've volumes described. websites capabilities and the in made, enhancements to for the So, develop get speed us that brands brand really see the future, mobile were and in to for to foundational up being efficiently. describe the ripple allowing XXXX, buckets, things provide our I our for that of across all developers we it

So long customer screen foundational inning, you've hope our gone for to some because onto that I describe some and But now capability of that's we going that. and into I gone to it's also you've delivering But that app, is then I enhancements hope seeing can't another the attached website as experiencing [ph], as on think as I you're our stuff. keep on to to got front. continue got a out

Dick Johnson

to stores sure we well. we our make And have as energize that

So, they're of the and Kong, because done digitally in so connected. Store know is a Liverpool London Power an but impact we've things the in communities that greater consumer excited that they based, some We the have Hong the Mile about opening we're of than have reach that where on the X store. much they

opportunity business with mean, relevant transforming flow, investments to this the will to consumer. going while moving continue that current ebb this invest stay part to consumer. a of legacy and it's to face the stay fast to we're So, we I have with

Lauren Peters

investments focused deliver we that our making But remain sure on return.

in it Just to invest the we provide for fleet in invest as a return. we looking when we're technology,

Operator

with on is line McShane Kate from the a question. Citi

Kate McShane

have been sounds it in have all Fall sequentially, that prepared the styles that With by or improvement an the seen remarks, Curry, like like Vans driven the in the it of portfolio? regards more improved to working you is still category, your [ph]

Dick Johnson

or focus fixate categories. on Kate, we don't specific

in -- of trying that who -- of certainly team of it's to the in consumer of part was about that back. Nomadic partners Lakers some important around heat the improvement, to that heat to to work product the did House we're it experience exciting have XVI, great it our those buy in Hoops our have of category an you vibrant to part opportunity have consumers add great just for to our the experiences the and huge basketball while brand and So we trying to the interest and When is an is people starting seen related that develop some the there's product work is opening that Lebron LA come sequential partners talk the that's find driving and related, with but season concept we're our success, a we silhouettes. and back, sees part

Kate McShane

to And a addressed. composition If could shape are ask but inventory, inventory. if very on just update still need I us you like down year-over-year, if in question good overall wondering there second it areas the of inventories sounds on be any could the that being

think the we would in said you little into have higher a about Europe levels I bit are liked, going QX? you markdown than that think how should

Lauren Peters

across the we the at We discipline on be We of would season. heading in very course that the and you there are improving can the across Europe, are they geographies, as banners holiday when the markets into good regulated freshness see are post-holiday. an would to our focused be in very QX, many next and they inventory feel be of about know, promo that of on the end period the situation

into good heading react, read about feel where we So are season. we the we and

Operator

Poser Sam SFG with a line from question. is the on

Sam Poser

the integrated digitally, one, we roll questions; you've now all of where when? got the on is are Two that and is how going that to out up and your store loyalty program, be

Dick Johnson

want We the out. we've more it's a reward Europe. or country smaller and membership the well less we members a a loyalty program test perspective about program, as is We're can anticipation and from And out continuing in QX a will in likely QX, to perspective all make it bugs that Sam program and sure able our should is what late about of there, we a the than the couple as we two you of in in to functions it to and XXXX develop our got banners, that point of from the be view. loyalty that unique from roll bring know,

but like, never lifting fast as us would a doing So, making team any lot to the good is progress this goes as thing work. make of of heavy and

Sam Poser

CRM, assume thing? CRM you and all all the same this I a follow-up, is also part updated of just that, mean happening the -- And have all on I is the your of

Dick Johnson

terms communicate that's capturing when a our it's of them deliver obviously improvement of program Interwoven where our of putting members we investment. has in in get rollout with buck but the benefits of Our CRM that for and them, can sort can our do the into to little to start all to names membership the we us where CRM we position data biggest bang allowed an and lake in bit a program to and POS into

Sam Poser

and more fiscal Can look you give us few into thinking a closing I for were. thought any about you're than stores openings store then, closings? how you're you 'XX And

Dick Johnson

try our and done to estate a hard flexibility much the of and possible build as as job into great our team portfolio store worked has that. development We've to real team

under-productive we've we pretty right? we we do the into guidance risk haven't try We plans, and look consistent certainly flexibility given adjust but fourth at build that are on path, we'll So in. stores, malls we at that our that quarter look our built call, a we and appropriately based at when had get as XXXX we've to

So in-depth preview for not clearly get some a QX to XXXX, but the call. when our we provide plan guidance we'll into

Sam Poser

being Let me year closing gap foresee you net as do you ask that? sense, that stores do as closings, more see in many general foresee that the do as you between -- or this many next them you tightening year a

Dick Johnson

we I that we in quicker than On again us, wouldn't forced the cases. malls some big, quite upon surface, we closures as expect, to deteriorate are expect be that but have far it have

tighten today, November it bit up we on little in what So, I to XX. a that's know XXXX, would but expect again based

Operator

Canaccord line is Genuity a the with question. from on Camilo [ph]

Unidentified Analyst

on manifested year, with you're Boost, Mr. on did you do update then you Jordan where that really those that in is? you cycling, And growth? when the that second question my And on the return to hoping this the that cycling brand see that is headwinds the us just expect us stand update platforms could the to to during progress give [ph], great flowed extent, I to if all where process superstars you that had making. the to how It's quarter? cycle brand perform to you Jordan, and product product respect great could an that with a was XXXX

Dick Johnson

I'm on answer a I sure I that direct -- can not you Camilo. would the give cycling,

footwear channels the think will accelerated that's slowed and merchant, those is fact we other and as cycling across that we to through tremendous a partners places. we in things job half right gains that as have programs did the tells where success doing with some some I you cycling back up setting right, saw brand fundamentally bigger comp a a you the geographies, up the things down, to and across that the I were we've positive, for move ramp tremendous have slowdown, job damage And through our a of inventory, cause through team think possible our is think trying the appetite QX. that you the finding consumer as in as little talked our up job about team

will continues brand. appropriately to understand success the me team run continuing and and retrenched scarcity You around and got a got the know, which have they there, we've consumers their today our slowly team expect they Jordan the and pull tells market, that we're I model, that a quantities ratchet in heat appetite understand they've the very scarcity is with but folks, Jordan marketplace the brand market run to to strong see team pull and the starting sell-throughs, the that right to important with availability, really market work that up the the it

Unidentified Analyst

starting with through If on the flow your chasing that up jobs I as the and now to really a better follow product. selling anniversarying comment about first could effect -- and merchant

a with about now that 'XX, talking down starting So likely you're Is of of headwinds from in the six difficult of given all that over seeing the inventory that pipeline it the into is the the what probably what coming seems positioning from like perspective? how articulate that to steady stronger view suggest is today that the and change pretty would trends the product on have also that momentum a to now business to and that going past the now path you're four sits characterization quarter quarters. you're seeing the -- see manifested innovation fair fourth

Lauren Peters

that to sneakers of still strong. lot backdrop their say think cool creativity finding there, finding they a the I our the customers there, in it's and they're is are that category fair of finding excitement

Dick Johnson

of expect consumer quickly moves the consumer we that that QX things we we And appetite we and we've the continue to has deliver continue have into 'XX, guided to know. the to some well against that about to and as talked

Unidentified Analyst

I quarters, been it a And managed, in; if the in declines feel inventory well then sneak just you're do growing inventory? think to had last six start I that you has for could one now your inventory position you've past incredibly in

Dick Johnson

big to success. productive, believe higher productive of our where We attributed to a of that's asset, that level love the the And we're number that part our be. we more story productivity our productivity is appropriate growth the growth mean while that can and continue churn can to right, critical which we is make more what we is is to inventory I inventory key that get and of churn, the up,

count. and store appreciate controlled we've up, we've reduced team inventory it, because the tremendous I think job it has you done as controlling a calling I So, also again

closures have ratchet our which we've So inventory on to total tried the those an critical amount, turns is to success. impact up our

the of inventory balance productivity to line, sure the see that to the continue -- certain with sales continue need growth the that deliver. to make we we'll needs make to So, we from

Operator

[ph] Camp is on Baird line Jonathan the with from a questions.

Unidentified Analyst

two just know up third there little bit, up I same-store you wanted the you're to wanted for the understand, first understanding sales, just to the guess target on raised quarter, the a mid-single I I digits. follow the the quarter months but of last guidance on running I fourth

the maybe of that to So guidance or unsustainable is was mid-single there anything you're some that just of digits? would in fourth about imply the low quarter thinking how

Lauren Peters

We reiterate low-single digits our are guidance, a contemplating to the mid-single and whole digits. I'll quarter as

Unidentified Analyst

the major launches any of you're any coming some expecting know, perspective there, on some of I some the launches? and of up, -- of XX Is kind what on around you perspective there can the like buzz share other for but there's the Jordan some press the

Dick Johnson

takeovers I middle but market, more the our which I collaborations -- launched get again and couple partners. in to we Timberland Nike about London got about the Gold Pack. of in x performances this excited and a the got Nike Champion of come Room York, but month, we've excited vendor we've great Gold in Well, get launches, that this with with later important together artists collaboration, to last We with connected that the New month. present was this store We've really days, Milan

had access Air, gallery the our Tuned featured be to the So, Plus, which locations Air Mix Max excited also will things in to is really Air some we're Max in that Vapor that the Toronto. Room portable Gold or visitors XX, the Plus

scape So, we've cool got things. Adidas, of takeover with of again Highland, in a that The [indiscernible] partnership and the very they're sort doing scenario. the Hollywood futures

about Stores. Liverpool Later unique So a London in that brand. product, our experience. shoe takeover to take have place get AM got that X:XX collaboration great again, great come with a and in to designs great in Reebok in again We've a we've a going this activation month, in the Paris Transformer are consumers Power that's classic Puma all with got

are our critical, excited the me is the period. launches I Q&A, you the gets about what team get about, our XX excited were we'll that mentioned great our Retro holiday that brand doing is customers, with consumers, our talked the all And certainly all earlier launches in work but holiday important, the believe of important, period. Easy partners about the the really So,

Unidentified Analyst

range just digit fixed And of how be cost and return more payback your the taking, be to a for comps low-single maybe able some forward? I'm discussion the overall actions wondering me you're point to you in Lauren, just where on might scenario the last one from might and soon going that given leverage investments expecting a about

Lauren Peters

we'll off, back inference, to lever pay As look is point And the again. you it call out come to by we digit, for investments do right? mid-single these still

store. do the about on connect thoughtful be it really I because and with your technological side, greater what into you digital measure and allows an on think thoroughly. the traffic marketing I've covered you But marketing the digital the return to it, the efforts more to both digitally having is to driving it fairly ability advantage capabilities the

to measure can specific marketing events. back that You

we get marketing, about So, ever where could the demonstrate on straightforward. optimistic as I'm a we'll that we at be that very smarter place that, it that return

Dick Johnson

one sorry clarify in I've it the and to was both the was think there. room about gold New said not just thing movable, Toronto same confusion so featured that the York at it's I portable, actually time,

Unidentified Analyst

you thank Well, Understood. best and for clarifying luck. that of

Operator

Your from Credit line Binetti Michael of from comes last question Suisse. the

Michael Binetti

a about of you you So, have I biggest kind you say in examples any to lift is strategy where you in that Have sales where that The market to put sales what retailers the vendor? away is about. starts those your ask a your given from of with your Nike undifferentiated business amounts see -- you in strategy that the are was into reflection play going as you to question large go? starting as at you stated US, of look to shift Nike's transformation talked think you -- do sales a they've clear think

Dick Johnson

away successes in Max x you how seeing, if the energy platform and lot through we've they're It's talked about from this partnership marketplace see it product launched about to a QX, we product we've Pack around that the us. that y and the can Look both great units at us we've create come and that don't to in experiences. we're Frequency that together specifically the got, more talked I giving about taking Air a business vendor those that Origins we about, you lot business talk that already, the Pack know the

we retail strong that Pro experience to Hoops to things physical partnerships the our those collaborating Athletes willing consumer. all me did in to House adding to So, out of end are is differentiate about the event Los Angeles, talked for indications like that stores things and the strategy the invest are our the Nike on Courtside environments, that people we that your with

Michael Binetti

sounds good this you've know you some about mentioned how stores. I Center markets, so -- you but some smaller events. ideas in Power used -- markets the or see the there? but cited you're in to that building quarter, the land, three and that have how are markets, you're community for past -- of big strategy you mall, away Power may by have that C think have and in store where smaller me with -- the the working How you're are talked that, suggesting sounds some uncontrollable testing you. -- to D of the on, Centers markets -- Let like you we the you've ask those you've these just middle space us a talked about pipeline shared you're you testing viable a just of like in told it in curious you're markets I malls still nice malls you're the I going big side margin but you going side of where say experiences some a it are a two am that landing what make be those obviously in banner by kind we Can testing speak or you, in small for can

Power thinking to the markets? to If you are with and you if you big can prototype that close strategy, shift financial those goal how a those have have work what's -- your strategies Center you're in

Dick Johnson

things. operate, test we how you prototype do Well, know and we

at times work we're from right iterate works. move When is to service that find many we and not that a are to those of live until we that consumer So, near to and pivot feel the big mall talk malls just markets, we what it's need that continues malls, model those it to to to that activations C the D get things of malls. willing to in risk continue mall, out we to usually get you the so about out we need the we'll need

some smaller as people big have those some they have markets, malls live. are suburban where So, shifted markets, are of the them deteriorated of

all entity those that follow side an decision by know management you have side are or build off-mall our out. a sort does that to pivot a our roll we'll tell there is into I one-offs. a location a a we make case, couple So each store looking in at whether can bigger are our that might of by banners real by we connected, estate market simply team great market case don't of formula portfolio market, by that of I of team and right the job opportunity market

Lauren Peters

But about we have of to recognize that it a of of a brands lot strategic sneaker and epicenter at advantage power the there's statement being and the is collection portfolio and make to this youth them of a culture. culture

Operator

I Lance remarks. would the like to to for back turn Mr. closing call

Jim Lance

join today. at earlier and which Please will The call, follow X.XX us take again release you Thank that us morning. our on call Thanks AM our place of anticipate March fourth will for we next Friday results for earnings the X. again, goodbye. joining quarter

Operator

today's gentlemen. and This you, Thank concludes call. Thank for participating. ladies conference you

may You disconnect. now

Foot Locker (FL) 21 Nov 182018 Q3 Earnings call transcript