Foot Locker records strongest sales in company history
Foot Locker on Friday announced net income of $158 million for the fourth quarter, compared to a net loss of $49 million in the year-ago quarter, according to a company press release. For the year, net income was $541 million, up from $284 million the year before.
Comparable store sales were also strong, increasing by 9.7% for the quarter, per the release. Total sales increased 2.8% to $2.27 billion, edging out the year-ago quarter, which had sales of $2.21 billion. For the fiscal year, sales at Foot Locker were $7.9 billion, the highest in the company's history, and an increase of 2% from 2017's $7.8 billion.
Merchandise inventories were $1.27 billion, 0.7% lower than the year-ago quarter. Shares of Foot Locker were up 18.5% in premarket trading, as the company beat estimates for earnings per share, sales and same-store sales, according to MarketWatch.
Foot Locker soared past expectations for the fourth quarter, with strong numbers across the board. Executives on a conference call Friday morning said the men's and women's categories were both up double digits, while kids was up high-single digits. Apparel at the company rose in the mid-single digits, with growth in the children's apparel category being particularly strong.
Foot Locker has made several purposeful moves this year to improve its numbers and long term outlook, such as investing more than $124 million in other businesses, including GOAT Group, Super Heroic and Rockets of Awesome. CEO Dick Johnson pointed to these investments as part of the retailer's strategy to evolve with the customer and "create a richer ecosystem for our customers."
"We believe these investments will help us do just that," he said on a call with analysts, noting that they plan to help those startups flourish while also "harnessing the insights, capabilities and innovations" from them to help Foot Locker grow as well. While the investments have seemed to come hard and fast, Johnson noted in the call that these moves are the result of a year and a half of work and stem back to recognition in 2017 that the company needed to evolve.
Part of that evolution has included closing unprofitable stores — 134 this year, according to the release — and Johnson also announced that Foot Locker plans to wind down the female-focused SIX:02 banner to better focus on building the women's business in other banners.
Going forward, executives expressed confidence in continued growth, driven by the efforts that it's put into motion this year.
"Looking at 2019, we believe that by maintaining our focus on bringing differentiated experiences to youth culture, we can continue to elevate our financial performance by generating a mid-single digit comparable sales gain and another double-digit percentage increase in earnings per share," Johnson said in a statement.
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