Business news :Foot Locker's Q3 Profits Soar on Double-Digit Revenue Gain

Foot Locker, Inc. reported net profits vaulted 60.6 percent in the third quarter, to $106 million, or 69 cents per share, compared with $66 million, or 43 cents, a year ago. Sales increased 9.3 percent, to $1.52 billion this year, up from $1.39 billion for the corresponding prior-year period.

Third quarter comparable-store sales increased 10.2 percent, which consisted of a 9.4 percent increase in store sales and an 18.3 percent increase in direct-to-customer sales.  Excluding the effect of foreign currency fluctuations, total sales for the third quarter increased 11.0 percent.

Year-to-Date Results Net income for the company's first nine months of the year increased 48.7 percent to $293 million, or $1.90 per share, compared with net income of $197 million, or $1.27 per share, for the corresponding period last year.  Year-to-date sales increased 8.4 percent, to $4,469 million, compared with sales of $4,121 million last year. Year-to-date comparable-store sales increased 9.9 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 10.4 percent.

"Our team put together another outstanding quarter, delivering a double digit sales gain and controlling expenses to drive our bottom line earnings to new heights," said Ken C. Hicks, Chairman and Chief Executive Officer. "The ongoing focus of all of our associates on the strategies and initiatives we updated at the beginning of the year continues to enhance the productivity of our key assets.  Inventory turns are improving; sales per square foot are increasing; and by investing in our people and giving them the best tools to succeed with the customer, our associates are becoming even more productive, too."

Non-GAAP Adjustment
Included in the company's third quarter and year-to-date results is a tax benefit of $9 million, or $0.06 per share.  This benefit is the result of a settlement of a foreign tax audit, resulting in a reduction of tax reserves established in prior periods.  On a non-GAAP basis, Foot Locker's third quarter earnings were $0.63 per share. 

Financial Position At October 27, 2012, the company's merchandise inventory was $1,240 million, 3.0 percent higher than at the end of the third quarter last year.  The company's cash and short-term investments totaled $853 million, while the debt on its balance sheet was $133 million.  The company's total cash position, net of debt, was $158 million higher than the same time last year.

During the third quarter of 2012, the company repurchased approximately 841 thousand shares of its common stock for $29.7 million.  Year-to-date, the company has repurchased just under 3 million shares of its common stock for $94.3 million under the company's $400 million share repurchase program.

Store Base Update
During the first nine months of the year, the company opened 70 new stores, remodeled/relocated 159 stores and closed 72 stores.  At October 27, 2012, the company operated 3,367 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 40 franchised stores were operating in the Middle East and South Korea.

( SportsOneSource Media )