Foot Locker(US:FL)2019-12-11 22:01Store Operations - Foot Locker operated 3,160 stores as of November 2, 2019, a decrease from 3,221 stores on February 2, 2019, and 3,266 stores on November 3, 2018[98]. - The company has three operating segments: North America, EMEA, and Asia Pacific, reflecting its strategic focus on an omni-channel approach[111]. Financial Performance - The company reported sales of $1,932 million for the thirteen weeks ended November 2, 2019, compared to $1,860 million for the same period in 2018, representing a 3.9% increase[113]. - For the thirty-nine weeks ended November 2, 2019, sales totaled $5,784 million, up from $5,667 million in the prior year, reflecting a 2.1% increase[113]. - Division profit for the thirteen weeks ended November 2, 2019, was $184 million, compared to $165 million for the same period in 2018, indicating an increase of 11.5%[113]. - Adjusted diluted EPS for the thirteen weeks ended November 2, 2019, was $1.13, compared to $0.95 for the same period in 2018, marking an increase of 19%[104]. - Net income for the thirteen weeks ended November 2, 2019, was $125 million, slightly down from $130 million in the same period of 2018[104]. - Comparable sales increased by 5.7% and 3.8% for the thirteen and thirty-nine weeks ended November 2, 2019, respectively, with direct-to-customers channel growth of 11.4% and 11.1%[117]. - Gross margin rate increased by 50 basis points to 32.1% for the thirteen weeks ended November 2, 2019, compared to 31.6% for the same period last year[125]. - Division profit for the thirteen weeks ended November 2, 2019, was $184 million, with a division profit margin of 9.5%[132]. - Interest income increased by $1 million for the thirteen weeks ended November 2, 2019, primarily due to cash repatriation to the U.S.[134]. - The provision for income taxes for the thirteen weeks ended November 2, 2019, was $46 million, with an effective tax rate of 27.0%[142]. - Net income decreased by $5 million, or 3.8%, for the thirteen weeks ended November 2, 2019, compared to the prior-year period[143]. Expenses and Capital Expenditures - Selling, General and Administrative Expenses (SG&A) increased by $13 million to $411 million for the thirteen weeks ended November 2, 2019, reflecting a 3.3% increase[127]. - SG&A as a percentage of sales declined by 10 basis points for the quarter but increased by 60 basis points for the year-to-date period[130]. - Capital expenditures for the thirty-nine weeks ended November 2, 2019, were $174 million, a decrease of $27 million compared to the prior-year period[151]. - The company expects full-year capital spending to be approximately $220 million, reflecting a $50 million reduction from the initial target[151]. Shareholder Returns - During the thirty-nine weeks ended November 2, 2019, the company repurchased 7,493,100 shares for $300 million[154]. - The company declared and paid dividends of $125 million during the first three quarters of 2019, compared to $120 million in the same period of 2018[154]. - As of November 2, 2019, $902 million remained available under the company's current share repurchase program[147]. Segment Performance - Foot Locker's North America segment includes various banners such as Foot Locker and Champs Sports, contributing significantly to overall performance[111]. - Asia Pacific operating segment sales increased by 26.7% for the thirteen weeks ended November 2, 2019, driven by growth in e-commerce and store expansion[122]. - North America saw significant sales increases, particularly in Foot Locker Canada, with low double-digit growth in comparable sales[119]. Other Income and Charges - The company recorded pre-tax charges of $1 million for the thirteen weeks ended November 2, 2019, related to pension litigation, down from $2 million in the same period of 2018[106]. - The company recognized a gain of $4 million related to the acquisition of a Canadian distribution center lease during the thirteen weeks ended November 2, 2019[107]. - Other income for the thirteen weeks ended November 2, 2019, included a $4 million gain from the acquisition of a Canadian distribution center lease[136]. - The company contributed $55 million to its U.S. qualified pension plan during the thirty-nine weeks ended November 2, 2019, compared to $128 million in the prior-year period[150]. Product Performance - The footwear category was the primary driver of comparable sales growth, particularly in men's and children's footwear, while apparel sales declined[123].