Foot Locker Inc. shared that its board of directors authorized three capital allocation initiatives that meaningfully enhance shareholder returns while also sustaining a strong level of investment in its business as it works to attain its long-term financial goals.
First, the board of directors declared a quarterly cash dividend on the company’s common stock of 31 cents per share, which will be payable on April 28, 2017 to shareholders of record on April 13, 2017. This dividend declaration represents a 13 percent increase over the company’s previous quarterly per-share amount and is equivalent to an annualized rate of $1.24 per share.
Second, the board of directors approved a new three-year, $1.2 billion common share repurchase program extending through January 2020, replacing the company’s previous $1 billion program. Through the end of fiscal 2016, the company had spent $795 million under that program since it was announced two years ago.
Third, the board of directors approved a $277 million capital expenditure program for 2017, close to the $284 million of capital that the company invested in 2016. The company will continue to spend capital to build on its key strategic initiatives, including opening exciting new retail destinations in key cities around the world; extending its remodel programs to more of its existing store fleet; expanding geographically, particularly in Europe and with its Kids Foot Locker banner globally; building even stronger capabilities in its direct-to-customer segment; and upgrading its technology and supply chain infrastructure.
“We have seen that the capital investments Foot Locker, Inc. has made in recent years have been critical to elevating our financial performance and positioning us at the center of sneaker culture,” said Richard Johnson, chairman and chief executive officer. “With the landscape of retail changing rapidly, our board of directors agrees that leading that change in the future requires ongoing investment in our business. At the same time, our company remains committed to returning significant amounts of cash to shareholders, and the Board’s actions to both increase our dividend at a double-digit percentage rate for the seventh straight year and increase our share repurchase authorization by 20 percent is clear evidence of that commitment.”
Image courtesy Foot Locker