Foot Locker Q3 Tops Street Estimate on 4 Percent Comp Gain

Excluding the effect of foreign currency fluctuations and Runners Point Group, total sales increased 1.3 percent.

Year-To-Date Results

Net income for the company's first nine months of the year increased to $308 million, or $2.04 per share, compared to net income of $293 million, or $1.90 per share, for the corresponding period in 2012.   Earnings per share for the nine month period have increased 7.4 percent compared to the same period in 2012.  Year-to-date sales were $4,714 million, an increase of 5.5 percent compared to sales of $4,469 million in the corresponding nine month period of 2012.  Year-to-date comparable store sales increased 3.7 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 5.3 percent.

“It took a strong team effort to produce the solid top and bottom line results that we are reporting this morning,” said Ken C. Hicks, Chairman of the Board and Chief Executive Officer.  “We have many strategies underway to drive our business, and the advances we have achieved are contributing to the current momentum we have towards reaching our long-range operational and financial goals.

“Most exciting for me, however, is that while we still have much progress to make on our existing initiatives, the team at Foot Locker, Inc. is continuing to identify new opportunities and develop ideas further in order to leverage our strengths and build an even stronger business.  Some of these ideas deliver immediate impact, some will help improve results in the next several quarters, and yet others have the potential to drive our performance over the longer term.”

Non-GAAP Adjustment

During the third quarter, the company incurred approximately $1 million, after tax, in costs related to the integration of Runners Point Group, and recorded a tax benefit of $3 million, or $0.02 per share, resulting from the conclusion of a foreign tax audit which enabled a reduction of tax reserves established in prior periods.  Excluding these adjustments, third quarter earnings were $0.68 per share on a non-GAAP basis, an increase of 8 percent compared to the $0.63 that the company earned on a non-GAAP basis in the third quarter last year.  The period last year included a similar tax benefit of $9 million, or $0.06 per share.

For the first nine months of 2013, non-GAAP net income was $310 million, a 10 percent increase over net income in the corresponding period last year.  This net income represents $2.05 per share, an increase of 12 percent over the $1.83 per share earned in the corresponding period of 2012.

Financial Position

At November 2, 2013, the company's merchandise inventory was $1,316 million, 6 percent higher than at the end of the third quarter last year. Expressed in constant currencies and excluding Runners Point Group, inventory increased approximately 1.2 percent.

During the third quarter, the company repurchased approximately 2 million shares of its common stock for $67 million, bringing the 2013 year-to-date repurchase activity to 4.85 million shares for $167 million.

The company's cash, cash equivalents, and short-term investments totaled $796 million, while the debt on its balance sheet was $140 million.  The company's total cash position, net of debt, was $64 million lower than at the same time last year.

Store Base Update

During the third quarter, the company opened 28 new stores, remodeled or relocated 118 stores, and closed 13 stores. The company operated 3,510 stores in 23 countries in North America, Europe, Australia, and New Zealand as of November 2, 2013.  In addition, 45 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 27 franchised Runners Point and Sidestep stores in Germany and Switzerland.