Foot Locker, Inc. reported income from continuing operations for the company’s first quarter ended May 3, 2003, increased to $39 million, or $0.27 per share, compared with $38 million, or $0.26 per share, last year. For the 13-week first quarter period, sales increased 3.5 percent to $1,128 million this year compared with sales of $1,090 million last year. First quarter comparable-store sales decreased 2.5 percent, on a constant currency rate basis.
The Company’s financial position remains strong with debt, net of cash, of $52 million. This represents a $67 million reduction from the same period last year. Merchandise inventories remain on plan and well positioned to support the Company’s second quarter sales expectations. During the first quarter of 2003 the Company opened 17 stores, remodeled/relocated 60 stores and closed 42 stores. At May 3, 2003, the Company operated 3,600 stores in 14 countries in North America, Europe and Australia.
“Our first quarter performance reflects the implementation of a series of ongoing initiatives designed to make our Company more efficient and which contributed to our increased earnings,” stated Matthew D. Serra, Foot Locker, Inc.’s President and Chief Executive Officer. “We are encouraged by our first quarter performance, and in particular by our 120 basis point gross margin rate improvement. Given this success, we are somewhat more confident in our ability to increase our future quarter-over-quarter earnings per share, and we currently expect our second quarter 2003 net income from continuing operations to meet or exceed the current analysts consensus estimate of $0.24 per share.”
FOOT LOCKER, INC. Consolidated Statements of Operations (unaudited) Periods ended May 3, 2003 and May 4, 2002 (In millions, except per share amounts) First Quarter First Quarter 2003 2002 Sales $1,128 $1,090 Cost of sales 783 770 Selling, general and administrative expenses 241 220 Depreciation and amortization 37 36 Interest expense, net 5 7 1,066 1,033 Income from continuing operations before income taxes 62 57 Income tax expense 23 19 Income from continuing operations 39 38 Loss on disposal of discontinued operations -- (18) Cumulative effect of accounting changes, net of income taxes (1) -- Net income $38 $20