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FOOT LOCKER, INC. REPORTS FOURTH QUARTER 2023 RESULTS; ISSUES 2024 OUTLOOK
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PR Newswire
NEW YORK, March 6, 2024
- Total Sales Increased 2.0%; Comparable Sales Decreased 0.7%
- Foot Locker and Kids Foot Locker North America Comparable Sales Increased +5.2%
- EPS Loss of $4.13 and Non-GAAP EPS Income of $0.38
- Inventory Decreased 8.2% Year-over-Year
- Anticipates Return to Positive Comparable Sales Growth and EBIT Margin Expansion in 2024
- 2024 Non-GAAP EPS Guidance of $1.50-$1.70 including a Non-Recurring Charge of $0.10
- Provides Update on Timing to Achieve Lace Up Plan Financial Targets
NEW YORK, March 6, 2024 /PRNewswire/ -- Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its fourth quarter ended February 3, 2024.
Mary Dillon, President and Chief Executive Officer, said, "We are pleased to report fourth quarter results ahead of our expectations, including meaningfully accelerated sales trends relative to the third quarter, earnings per share that exceeded our guidance range, and improvements across multiple KPIs. As we continued to deliver on the strategic imperatives of our Lace Up Plan, we built significant momentum through the holiday season, driven by full-price selling in addition to compelling promotions. We also proactively reinvested in markdowns to end the year with leaner inventory levels compared to our expectations."
Ms. Dillon continued, "As we continue evolving into a modern, omnichannel retailer for 'all things sneakers,' we are making important progress strengthening our brand partnerships, increasing customer engagement, transforming our real estate footprint, and driving growth in digital. We are especially excited about strengthening our basketball leadership position, including a successful activation at NBA All-Star 2024. To further build on our progress, we are leaning into strategic investments in digital, store experience, loyalty, and brand-building in 2024. The Foot Locker brand will celebrate its 50th anniversary later this year, and we are confident that our Lace Up Plan is positioning the Company for longer-term sustainable growth and shareholder value creation, while laying the right foundation for our next 50 years of success."
Fourth Quarter Results
- Total sales inclusive of the 53rd week increased by 2.0%, to $2,380 million, as compared with sales of $2,334 million in the fourth quarter of 2022. Excluding the effect of foreign exchange rate fluctuations, total sales for the fourth quarter increased by 1.5%.
- Comparable sales decreased by 0.7%, driven by a 210 basis-point impact from repositioning the Champs Sports banner, consumer softness, and changing vendor mix. Importantly, combined comparable sales increased 5.2% in the Foot Locker and Kids Foot Locker North American banners.
Please refer to the Sales by Banner table below for detailed sales performance by banner and region.
- Gross margin declined by 350 basis points as compared with the prior-year period, primarily as a result of higher markdowns, partially offset by occupancy leverage.
- SG&A as a percentage of sales increased by 10 basis points compared with the prior-year period, with savings from the cost optimization program more than offset by inflation and investments in front-line wages and technology.
- Fourth quarter net loss was $389 million, as compared with net income of $19 million in the corresponding prior-year period. On a Non-GAAP basis, net income was $36 million, as compared with $92 million in the corresponding prior-year period.
- Fourth quarter diluted loss per share was $4.13, as compared with earnings per share of $0.20 in the fourth quarter of 2022. Fourth quarter results include a $0.12 contribution from the 53rd week of 2023. Non-GAAP earnings per share decreased to $0.38 in the fourth quarter, as compared with $0.97 in the corresponding prior-year period.
- Non-GAAP results exclude, among other items, non-cash charges of $478 million related to the Company's minority investments and $75 million related to the Company's partial settlement of its pension plan obligations. The Company assesses the carrying value of its minority investments for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. The pension settlement charge of $75 million represents the acceleration of losses that were previously deferred. As part of efforts to reduce pension plan obligations, the Company transferred the plan's registered assets and liabilities to an insurance company through the purchase of a group annuity contract, under which an insurance company is required to directly pay and administer pension payments to certain pension plan participants, or their designated beneficiaries.
See the tables below for the reconciliation of Non-GAAP measures.
Balance Sheet
At quarter-end, the Company had cash and cash equivalents of $297 million, and total debt was $447 million.
As of February 3, 2024, the Company's merchandise inventories were $1,509 million, 8.2% lower than at the end of the fourth quarter last year. Excluding the effect of foreign currency fluctuations, merchandise inventories decreased by 7.8% as compared with the fourth quarter of last year.
Store Base Update
During the fourth quarter, the Company opened 29 new stores, remodeled, or relocated 66 stores, and closed 113 stores.
As of February 3, 2024, the Company operated 2,523 stores in 26 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 202 licensed stores were operating in the Middle East and Asia.
2024 Financial Outlook and Update on Timing to Achieve Lace Up Financial Targets and Capital Allocation
Mike Baughn, Executive Vice President and Chief Financial Officer, said, "We maintain conviction in the longer-term earnings potential that our Lace Up plan will generate and reiterate the 8.5-9% EBIT margin target communicated at our March 2023 Investor Day. Given our lower starting point exiting 2023, we expect a two-year delay in achieving that goal and now see reaching that target by 2028."
Mr. Baughn continued, "As our margins and cash flows improve, we will continue to prioritize investing in our business, and enhancing financial flexibility to continue to support our strategic objectives. In that context, 2024 will serve as a cash rebuilding year, and we, therefore, are not resuming a dividend at this time. We are confident, however, that our strategy will unlock longer-term shareholder value, including a return to quarterly dividends and share repurchases over time."
The Company's full year 2024 outlook, representing the 52 weeks ending February 1, 2025, is summarized in the table below.
Note that the Company's full-year EPS guidance includes an approximate $0.10 non-recurring charge in the second quarter of 2024 from the anticipated rollout to the rest of North America of its enhanced FLX loyalty program. This charge is anticipated as loyalty points will be converted into additional benefits for the Company's customers.
| Metric | Full Year 2024 | Commentary | |
| Sales Change | -1.0% to +1.0% | ~1% annual headwind from lapping 53rd week in 2023 | |
| Comparable Sales Change | +1.0 to +3.0% | | |
| Store Count Change | Down ~4% | | |
| Square Footage Change | Down ~1% | | |
| Licensing Revenue | ~$17 million | | |
| Gross Margin | 29.8% to 30.0% | Lower markdowns year-on-year | |
| SG&A Rate | 24.4% to 24.6% | Ongoing investment spending | |
| D&A | $210 to $215 million | | |
| EBIT Margin | 2.8% to 3.2% | | |
| Net Interest | ~$12 million | | |
| Non-GAAP Tax Rate | 35.0%-36.0% | | |
| Non-GAAP EPS | $1.50-$1.70 | | |
| Adj. Capital Expenditures* | $345 million | |
| |
| * Adjusted Capex includes capitalized Technology expense |
The Company provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the Company's forward-looking EBIT, capital expenditures, and diluted earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.
Conference Call and Webcast
The Company will host a conference call at 9:00 a.m. ET today, March 6, 2024, to review its fourth quarter 2023 results and provide an update on the business. An investor presentation will be available on the Investor Relations section of the Company's corporate website before the start of the conference call. The call may be accessed live by calling toll-free 1-844-701-1163 or international toll 1-412-317-5490, or via footlocker-inc.com. Please log on to the website 15 minutes prior to the call to register. An archived replay of the conference call will be accessible approximately one hour following the end of the call through March 20, 2024 by calling 1-877-344-7529 in the U.S., 1-855-669-9658 in Canada, and 1-412-317-0088 internationally with passcode 5612202. A webcast replay will also be available at footlocker-inc.com.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, financial outlook, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the Company's filings with the U.S. Securities and Exchange Commission.
These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. For additional discussion regarding risks and uncertainties that may affect forward-looking statements, see "Risk Factors" disclosed in the Company's Annual Report on Form 10-K for the year ended January 28, 2023, filed on March 27, 2023. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update the forward-looking statements, whether as a result of new information, future events, or otherwise.
| FOOT LOCKER, INC. | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
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| Periods ended February 3, 2024 and January 28, 2023 | ||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||
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| | | Fourth Quarter | | | Year-to-Date | | ||||||||||
| | | 2023 | | | 2022 | | | 2023 | | | 2022 | | ||||
| Sales | | $ | 2,380 | | | $ | 2,334 | | | $ | 8,154 | | | $ | 8,747 | |
| Licensing revenue | | | 4 | | | | 3 | | | | 14 | | | | 12 | |
| Total revenue | | | 2,384 | | | | 2,337 | | | | 8,168 | | | | 8,759 | |
| | | | | | | | | | | | | | ||||
| Cost of sales | | | 1,746 | | | | 1,632 Werbung Mehr Nachrichten zur Foot Locker Aktie kostenlos abonnieren
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