Foot Locker, Inc. said that fourth-quarter earnings excluding charges rose 37.7 percent. Fourth quarter comparable-store sales increased 7.5 percent. Total sales increased 7.9 percent, to $1.5 billion this year, compared with sales of $1.39 billion for the corresponding prior-year period.
Excluding the effect of foreign currency fluctuations, total sales for the fourth quarter increased 8.2 percent.
The company reported net income of $81 million, or 53 cents per share, for the fourth quarter of 2011. These results included an after-tax charge of $3 million, or 2 cents per share, for the impairment of certain intangible assets. In the year-ago period, the company reported net income of $57 million, or 36 cents per share, which included an after-tax charge of $4 million, or 3 cents per share, for the impairment of certain intangible assets, net of the partial recovery of a short-term investment that was written down in 2008.
Fourth quarter non-GAAP net income was $84 million, or 55 cents per share, in 2011 versus $61 million, or 39 cents per share, in 2010. This represents a 41 percent increase in the adjusted net income per share amounts.
“The strategies our team identified and began implementing two years ago have elevated our financial and operational performance to new heights,” said Ken C. Hicks, chairman of the board and chief executive officer of Foot Locker, Inc. “As a result of the efforts of our entire team, we approached or surpassed many of the financial goals the organization set for ourselves in just the second year of our current five year plan.”
Fiscal Year Results
For the fiscal year, the company reported net income of $278 million, or $1.80 per share. These results included the fourth quarter after-tax charge of $3 million mentioned above. Last year, the company reported net income of $169 million, or $1.07 per share, including the net charge of $4 million after-tax.
Excluding the net charges in both years, full year non-GAAP net income was $281 million, or $1.82 per share in 2011, an increase of 65 percent over the $1.10 per share recorded in 2010.
Comparable-store sales increased 9.8 percent in 2011, and total sales increased 11.4 percent to $5,623 million, compared with sales of $5,049 million last year. Excluding the effect of foreign currency fluctuations, total sales for the full year increased 9.7 percent.
Financial Position
The company's merchandise inventory at year end was $1,069 million, which was $10 million, or 0.9 percent higher than at the end of last year.
During the fourth quarter of 2011, the company repurchased 289,100 shares of its common stock for approximately $7 million. For the full year, the company repurchased approximately 4.9 million shares for $104 million. Last month, the company announced a new, three-year $400 million share repurchase program extending through January 2015. At the same time, the company announced a 9 percent increase in its quarterly dividend, to 18 cents per quarter.
At year end 2011, the company's cash and short-term investments totaled $851 million, while the debt on its balance sheet was $135 million. The company's total cash position, net of debt, was $157 million higher than the same time last year.
Store Base Update
The company opened 70 new stores, remodeled or relocated 182 stores, and closed 127 stores during fiscal 2011. At January 28, 2012, the company operated 3,369 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 34 franchised stores were operating in the Middle East and South Korea.
|
FOOT LOCKER, INC. |
|||||||||
|
Condensed Consolidated Statements of Operations |
|||||||||
|
(unaudited) |
|||||||||
|
Periods ended January 28, 2012 and January 29, 2011 |
|||||||||
|
(In millions, except per share amounts) |
|||||||||
|
Fourth Quarter 2011 |
Fourth Quarter 2010 |
||||||||
|
GAAP |
Adjustments |
Non-GAAP, As Adjusted |
GAAP |
Adjustments |
Non-GAAP, As Adjusted |
||||
|
Sales |
$ 1,502 |
$ – |
$ 1,502 |
$ 1,392 |
$ – |
$ 1,392 |
|||
|
Cost of sales |
1,022 |
– |
1,022 |
962 |
– |
962 |
|||
|
Selling, general and administrative expenses |
325 |
– |
325 |
303 |
– |
303 |
|||
|
Depreciation and amortization |
28 |
– |
28 |
27 |
– |
27 |
|||
|
Impairment (1) |
5 |
(5) |
– |
10 |
(10) |
– |
|||
|
Other (income) (2) |
(3) |
– |
(3) |
(2) |
2 |
– |
|||
|
Interest expense, net |
2 |
– |
2 |
2 |
– |
2 |
|||
|
1,379 |
(5) |
1,374 |
1,302 |
(8) |
1,294 |
||||
|
Income before income taxes |
123 |
5 |
128 |
90 |
8 |
98 |
|||
|
Income tax expense (3) |
42 |
2 |
44 |
33 |
4 |
37 |
|||
|
Net income |
$ 81 |
$ 3 |
$ 84 |
$ 57 |
$ 4 |
$ 61 |
|||
|
Diluted EPS |
$ 0.53 |
$ 0.02 |
$ 0.55 |
$ 0.36 |
$ 0.03 |
$ 0.39 |
|||
|
Weighted-average diluted shares outstanding |
153.1 |
– |
153.1 |
156.2 |
– |
156.2 |
|||
|
Footnotes to explain adjustments |
|||||||||
|
(1) 2011 and 2010 amount reflects the write-down of CCS intangible assets. |
|||||||||
|
(2) 2010 amount reflects the partial recovery of a short-term investment that was written down in 2008. |
|||||||||
|
(3) 2011 and 2010 amounts reflect the income tax effect of the pre-tax adjustments highlighted in footnotes above. |
|||||||||
