Foot Locker says its same-store sales jumped 18.6% in the second quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Aug 21, 2020
  • Foot Locker says its same-store sales jumped 18.6% in the second quarter.
  • The sportswear company refrains from giving guidance for the full year.
  • Foot Locker to reinstate full executive salaries and share buyback programme.

Foot Locker Inc. (NYSE: FL) said on Friday that its same-store sales showed resilience in the fiscal second quarter despite the COVID-19-related disruptions. The company also highlighted that its profit in Q2 came in stronger than what the analysts had anticipated. Foot Locker launched its largest store in Singapore earlier this week.

At £34.34 million, Foot Locker’s net income in the second quarter was lower than £45.79 million in the same quarter last year. Adjusted for one-time items, the athletic shoe and gear retailer made 54.19 pence of earnings per share in the recent quarter. On the revenue front, it registered a 17.1% decline in Q2 to £1.59 billion.

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Foot Locker refrains from giving guidance for the full year

According to FactSet, experts had also forecast the company to print £1.59 billion in revenue in the fiscal second quarter. But their estimate for adjusted EPS was capped at a lower 52.66 pence.

The American sportswear company boasted a massive 18.6% growth in its Q2 comparable-store sales versus a significantly lower 1.9% expected. Foot Locker’s British peer, Frasers Group, also reported a 5% increase in annual core earnings on Thursday.

Merchandise revenue, as per Foot Locker, sunk to £910 million that represents a 2.7% annualised decline. The New York-based company refrained from giving guidance for the full year due to the Coronavirus uncertainty.

Foot Locker’s balance sheet as of the end of the second quarter showed £1.05 billion in cash and £92.35 million of debt.

Foot Locker to reinstate full executive salaries on September 1st

The retailer also said on Friday that it will reinstate full salaries of executives on 1st September. Salaries were slashed in May in a bid to shore up finances amidst COVID-19. Its CEO Richard Johnson had agreed to a 40% cut on his salary. Foot Locker’s executive and senior vice presidents were receiving 20% lower salaries in recent months, and general manager-level executives were receiving 10% lower salaries.

On top of that, Foot Locker will also reinstate its share repurchase programme on 1st September. The company’s board declared a quarterly dividend of 11.45 pence a share on Friday.

Foot Locker opened more than 6% up on Friday. Including the price action, shares of the company are now trading at £22 per share that marks an over 50% recovery since March. Foot Locker was seen exchanging hands at a higher per-share price of £29 at the start of the year.

At the time of writing, it is valued at £2.30 billion and has a price to earnings ratio of 15.00.

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