Foot Locker Reports Mixed Financial Results, Announces Strategic Changes

Foot Locker, Inc. reported its financial results for the thirteen and twenty-six weeks ended August 3, 2024, showing mixed performance compared to the previous fiscal period. Total revenue for the thirteen weeks reached $1,900 million, a 1.9% increase from $1,864 million in the same period of 2023. However, for the twenty-six weeks, total revenue decreased slightly to $3,779 million from $3,795 million year-over-year.

The company's sales performance reflected a similar trend, with total sales for the thirteen weeks at $1,896 million, up from $1,861 million in the prior year. In contrast, total sales for the twenty-six weeks fell to $3,770 million, down from $3,788 million. Notably, U.S. revenue increased to $1,225 million for the thirteen weeks, while international revenue declined to $675 million, impacted by currency fluctuations.

Foot Locker's profitability faced challenges, as the company reported a loss from operations of $(9) million for the thirteen weeks, compared to a profit of $1 million in the same period last year. The net loss for the quarter was $(12) million, worsening from a loss of $(5) million in the prior year. For the twenty-six weeks, the company recorded a net loss of $(4) million, a significant decline from a net income of $31 million in the same period of 2023.

The gross margin rate for the thirteen weeks improved to 27.6% from 27.1% in the previous year, while the year-to-date gross margin decreased to 28.2% from 28.6%. Selling, general, and administrative expenses rose by $37 million for the quarter, attributed to investments in technology and brand-building, as well as inflationary pressures.

Strategically, Foot Locker announced plans to exit underperforming markets, including South Korea, Denmark, Norway, and Sweden, with impairment charges of $9 million recorded in the second quarter. The company also agreed to sell its operations in Greece and Romania, expected to close in the first half of 2025, and plans to relocate its global headquarters to St. Petersburg, Florida, in late 2025.

As of August 3, 2024, Foot Locker had cash and cash equivalents of $291 million, an increase from $180 million a year earlier. The company amended its revolving credit facility, increasing its size to $750 million and extending the maturity date to June 20, 2029. The total liabilities decreased to $4,056 million from $4,289 million year-over-year, while total shareholders' equity fell to $2,897 million from $3,247 million.