Foot Locker(US:FL)2024-08-28 11:00Sales Performance - Total sales increased by 1.9% to $1,896 million compared to $1,861 million in Q2 2023, with a 2.5% increase excluding foreign exchange effects [2]. - Comparable sales rose by 2.6%, driven by a 5.2% growth in global Foot Locker and Kids Foot Locker [3]. - The company experienced a 7.5% increase in sales for Foot Locker in constant currencies, with total sales reaching $754 million in the second quarter of 2024, up from $704 million in the second quarter of 2023 [27]. - Year-to-date sales for Foot Locker increased by 4.7%, totaling $1.513 billion in 2024 compared to $1.448 billion in 2023 [27]. Financial Performance - Gross margin expanded by 50 basis points year-over-year, with a 90 basis point improvement excluding the impact of a non-recurring charge from the FLX Rewards Program [3]. - The net loss for the second quarter was $12 million, compared to a net loss of $5 million in the same period last year, resulting in a loss per share of $0.13 [4]. - Foot Locker reported an adjusted net loss income (non-GAAP) of $4 million for the second quarter of 2024, compared to an adjusted net income of $4 million in the same period of 2023 [21]. - The diluted loss earnings per share for the second quarter of 2024 was $(0.13), compared to $(0.05) in the same quarter of 2023 [24]. - Net loss for the period was $4 million, compared to a net income of $31 million in the previous year [31]. Inventory and Assets - Merchandise inventories decreased by 10.0% year-over-year to $1.6 billion, with a 9.2% decrease when excluding foreign currency fluctuations [5]. - Merchandise inventories decreased to $1.648 billion in 2024 from $1.831 billion in 2023 [29]. - Cash and cash equivalents increased to $291 million in 2024, compared to $180 million in 2023 [29]. - Total liabilities decreased to $4.056 billion as of August 3, 2024, down from $4.289 billion as of July 29, 2023 [29]. - Total shareholders' equity decreased to $2.897 billion in 2024 from $3.247 billion in 2023 [29]. Store Operations - The company opened 5 new stores and closed 31 stores during the quarter, resulting in a total of 2,464 stores across 26 countries [6]. - The company is closing stores and ecommerce operations in South Korea, Denmark, Norway, and Sweden as part of its strategic simplification efforts [7]. - Total store count decreased to 2,464, with 68 stores closed and 9 opened during the period [33]. - Selling square footage for Foot Locker U.S. was 2,364 thousand, slightly up from 2,354 thousand in the previous year [34]. - Gross square footage for Foot Locker U.S. decreased to 4,004 thousand from 4,028 thousand [34]. Strategic Plans - The company plans to relocate its headquarters to St. Petersburg, Florida in late 2025 to enhance collaboration and reduce costs [9]. - The company plans to focus on improving international operations following the closure of stores in underperforming regions [25]. - The company plans to continue its market expansion strategy, focusing on store relocations and remodels, with 110 planned for the year [33]. Capital Expenditures - Capital expenditures for 2024 are projected to be $275 million, slightly lower than previous guidance due to fewer store openings [11]. - Capital expenditures amounted to $132 million, compared to $105 million in the previous year [31]. Cash Flow - Net cash provided by operating activities was $126 million, a significant improvement from a net cash used of $184 million in the prior year [31]. - Net cash used in investing activities was $133 million, an increase from $96 million in the prior year [31]. - Net cash used in financing activities was $5 million, a significant decrease from $80 million in the previous year [31]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $322 million, down from $334 million at the beginning of the year [31].