Foot Locker’s Earnings Surge on 8% Comp Gain

Third quarter sales increased 5.4%, to $1.28 billion this year, compared with sales of $1.21 billion for the corresponding prior-year period. Comparable-store sales increased 8.1% in the third quarter.  Excluding the effect of foreign currency fluctuations, total sales for the thirteen-week period increased 7.0%.

“The more than tripling of our third quarter earnings per share versus our adjusted third quarter earnings in 2009 was driven by the combination of strong comparable-store sales growth and gross margin rate expansion,” stated Ken C. Hicks, Foot Locker, Inc.'s Chairman and Chief Executive Officer.  “These improving results reflect the hard work of our associates worldwide as the organization continues to implement the initiatives outlined in our new strategic plan.  It is encouraging that our increased sales and earnings reflect meaningful improvements in each of our operating divisions in the U.S., as well as in our largest international markets.”

Year-to-Date Results

For the first nine months of the year, the company reported net income of $112 million, or 71 cents per share. This compares with net income of $25 million, or 16 cents per share, in last year's period, which included impairment charges of $22 million, after tax, or 14 cents per share.  Before the impairment charges, net income for the 2009 nine-month period was $47 million, or 30 cents per share.  

Year-to-date sales increased 3.6 percent to $3.66 billion compared with sales of $3.53 billion last year.  Comparable-store sales increased 5.2%.  Excluding the effect of foreign currency fluctuations, total sales for the thirty-nine week period increased 3.8%.  

Financial Position

The company's merchandise inventory at the end of the third quarter was $12 billion, or 2.1% lower than at the end of the third quarter last year.

During the third quarter of 2010, the company repurchased 1,135,000 shares of its common stock for $16.2 million under the company's $250 million share repurchase program.  Year-to-date, the company has repurchased 2.5 million shares of its common stock for $35.9 million and paid quarterly dividends to shareholders totaling $70 million.  In September 2010, the company also made a $30 million contribution to its U.S. defined benefit pension plan.

At Oct. 30, the company's cash and short-term investments totaled $541 million while the debt on its balance sheet was $137 million.  The company's total cash position, net of debt, was $104 million higher than the same time last year.