Foot Locker, Inc. reported sales for the second quarter ending July 29, 2006 of $1.303 billion, versus $1.304 billion in the comparable period last year, a decrease of 0.1%. For this same 13-week period, comparable store sales decreased 1.3%.
For the 26-week period ended July 29, 2006, sales decreased 0.5% to $2,668 million, from $2.681 billion in the Company’s corresponding period last year. Comparable-store sales for the Company’s first six months of its 2006 fiscal year decreased 0.4%.
Excluding the effect of foreign currency fluctuations, total sales for the 13-week and 26-week periods decreased 1.2% and 0.5%, respectively.
“For the second quarter of 2006, our U.S. comparable store sales increased low-single digits while our international comparable store sales declined mid-single digits,” stated Matthew D. Serra, Foot Locker, Inc.’s Chairman and Chief Executive Officer. “These results were below our initial expectation, reflecting a softening trend at our U.S. stores and a continuing challenging retail environment in Europe.”
“We now expect our second quarter operating margin to decline versus the comparable period of last year primarily due to lower sales and gross margin rate, and higher SG&A expenses, as a percentage of sales, versus the second quarter of last year. The gross margin rate was negatively impacted by additional markdowns taken to maintain inventories in line with internal aging standards, and a higher occupancy expense rate due to below-planned sales. All of these factors contribute to our current expectation that earnings for the second quarter will be in the range of $0.15 to $0.17 per share,” he said.
