Footstar is Looking for a Bit of the Nike Magic that is driving much of the Finish Line growth to rub off on its Athletic Division after reporting that comparable store sales for the companys second quarter ended June 28, 2003 declined 2.2%. The athletic segment, which includes the Footaction and Just for Feet nameplates increased 1.0%, but the Meldisco unit, which derives most of its revenue from the licensed footwear departments at Kmart, saw comps decrease 4.9%.
Total sales for Q2 were $491.3 million, a decrease of 17.2% from $593.1 million in the second quarter of 2002. Meldisco fell 28.6% to $262.4 million and Footstar Athletic inched up 1.5% to $228.9 million.
Footaction same-store sales for the quarter increased in the “high single digit” range, but were offset by a “nearly double-digit” decline in comps at Just for Feet.
Management said the gains at Footaction resulted in part from increased offerings from Nike. FTS said they will “expand the scope of Nike offerings at Just For Feet and in its Consumer Direct business” in Q4.
FA saw double-digit comps store gains in April and “mid-singles” comp growth in May and June. Basketball was up 10% on strong AF1 and retro Jordan sales. Licensed apparel was also strong here and Footaction saw “very strong” performance from its adidas All Day, All Night product.
While the athletic group sees some uptick in sight, the Meldisco unit must still contend with a Kmart base that is roughly a third smaller than it was a year ago.
FTS has not reported earnings or filed its 10-Q or 10-K since last fall and appeared to warn of possible negative news when it said “results for the full 2003 year are also expected to reflect lower margins at Meldisco”.
