- Total Sales Decreased 8.6%; Comparable-Store Sales Decreased
8.0%
- EPS of $0.30 and Non-GAAP EPS
of $0.30
- Narrowing 2023 Sales and Earnings Guidance Range
- Investing in Basketball with NBA Partnership and Home Court
Initiative
- Strategically Entering India with License Partners
NEW
YORK, Nov. 29, 2023 /PRNewswire/ -- Foot
Locker, Inc. (NYSE: FL), the New
York-based specialty athletic retailer, today reported
financial results for its third quarter ended October 28, 2023.
Mary Dillon, President and Chief
Executive Officer, said, "We delivered third quarter results that
were ahead of our expectations as strong execution and early
progress against our Lace Up plan improved conversion trends across
channels. Looking forward, we are updating our outlook to
reflect the momentum we have in our strategic initiatives into the
fourth quarter, which includes strong results over the Thanksgiving
week period, against the backdrop of ongoing consumer
uncertainty. As such, we are narrowing our 2023 outlook and
still expect to end the year with inventory levels flat to down
slightly, as compared with the prior year."
Ms. Dillon continued, "As we move into the fourth quarter, we
are thrilled to be partnering with the NBA as an official league
marketing partner in the U.S. Combined with the recent rollout of
our Home Court experience, we believe this will drive deeper
engagement with our customers and cement Foot Locker's leadership
at the center of basketball and sneaker culture. We look forward to
rounding out our reset year and building on our progress in 2024
and beyond, and we are confident we are on the right path to
delivering longer-term shareholder value."
Third Quarter Results
- Total sales decreased by 8.6%, to $1,986
million, as compared with sales of $2,173 million in the third quarter of 2022.
Excluding the effect of foreign exchange rate fluctuations, total
sales for the third quarter decreased by 10.0%.
- Comparable-store sales decreased by 8.0%, driven by ongoing
consumer softness, changing vendor mix, and a 3% negative impact
from the repositioning of Champs Sports.
Please refer to the Sales by Banner table
below for detailed sales performance by banner and region.
- Gross margin declined by 470 basis points as compared with the
prior-year period, driven by higher markdowns as well as occupancy
deleverage and higher shrink.
- SG&A increased by 100 basis points as a percentage of sales
compared with the prior-year period, with savings from the cost
optimization program more than offset by underlying deleverage on
the sales decline, inflation, and investments in front-line wages
and technology.
- Net income was $28 million in the
third quarter, as compared with net income of $96 million in the corresponding prior-year
period. On a Non-GAAP basis, net income was $28 million, as compared with $121 million in the corresponding prior-year
period.
- For the quarter, the Company had earnings of $0.30 per share, as compared with $1.01 per share in the third quarter of 2022.
Non-GAAP earnings per share decreased to $0.30 per share, as compared with $1.27 per share in the corresponding prior-year
period.
See the tables below for the reconciliation
of Non-GAAP measures.
Balance Sheet
At quarter-end, the Company's cash and cash equivalents
totaled $187 million, while debt on its balance sheet
was $449 million.
As of October 28, 2023, the Company's merchandise
inventories were $1.9 billion, 10.5%
higher than at the end of the third quarter last year, including an
approximate 6.0% impact from the strategic pull-forward of
inventory into the third quarter to best position the Company for
the upcoming holiday season. Excluding the effect of foreign
currency fluctuations, merchandise inventories increased by 9.9% as
compared with the third quarter of last year.
Dividend and Share Repurchases
During the third quarter of 2023, the Company paid a quarterly
dividend of $0.40 per share for a total of $38 million.
As previously announced, the Company has paused dividends to
increase balance sheet flexibility in support of longer-term
strategic initiatives.
The Company did not repurchase any shares during the third
quarter.
Investing in Basketball Leadership
On November 16, 2023, Foot Locker
and the National Basketball Association (NBA) announced a
multi-year partnership under which Foot Locker will serve as an
official league marketing partner in the U.S. This collaboration,
which builds on a partnership history dating back to 1999, will
enable Foot Locker to meaningfully engage with fans throughout the
NBA season – including at marquee league events such as NBA
All-Star – while celebrating the intersection of basketball and
sneaker culture.
Foot Locker also will receive media exposure across league
platforms, including on-court virtual signage during national
broadcasts and on NBA social media channels. Additionally, the
partnership will be extended to Foot Locker's loyalty program, FLX,
providing additional connection points for customers throughout the
season.
In early November, Foot Locker rolled out its new global
platform, The Heart of Sneakers, featuring a star-studded range of
NBA talent including Nike's Kevin
Durant, adidas' Anthony
Edwards, Puma's LaMelo Ball and Under Armour's Steph Curry, in an engaging holiday campaign.
The NBA partnership – supported by authentic brand campaigns –
underscores Foot Locker's rich history and longstanding connection
to basketball and sneaker culture.
Foot Locker also recently began rolling out its Home Court
experience in select locations in the U.S. Home Court brings the
excitement and passion of basketball to customers in a
multi-branded concept designed with elevated merchandising and
storytelling. By creating distinct, basketball-led experiences for
its customers, as well as players, fans, creators and sneakerheads,
Foot Locker is investing in its basketball leadership while also
supporting category growth across its brand partners.
Announcing Entry into India
As part of its efforts to pursue growth through license partners
in newer markets, while still focusing on core banners and regions,
Foot Locker also announced today its entry into India in 2024. The Company has entered
into long-term licensing agreements with two strong operators in
India – Metro Brands Limited
(MBL), one of India's largest
footwear and accessories specialty retailers, and Nykaa Fashion, a
highly curated fashion and ecommerce destination showcasing
#FirstInFashion selections from both domestic and global brands,
attracting over 17.6 million monthly visitors. Under the
terms of the agreements, MBL is granted exclusive rights to own and
operate Foot Locker stores within India and to sell authorized merchandise in
Foot Locker stores. Nykaa Fashion will be the exclusive ecommerce
partner and will operate the Foot Locker India website as well as
retail authorized merchandise on a Foot Locker branded shop on the
Nykaa platform.
These agreements will enable Foot Locker to efficiently access
the large and growing sneaker market in India, consistent with the Company's efforts
to strategically pursue growth opportunities in new markets, expand
sneaker culture globally and bring Foot Locker's elevated,
multi-brand experiences and strong vendor partnerships to even more
people around the world.
Store Base Update
During the third quarter, the Company opened 22 new stores,
remodeled, or relocated 36 stores, and closed 14
stores.
As of October 28, 2023, the
Company operated 2,607 stores in 26 countries in North
America, Europe, Asia, Australia, and New
Zealand. In addition, 190 franchised stores were
operating in the Middle East and Asia.
2023 Financial Outlook
Fiscal year 2023 represents the 53 weeks ending February 3, 2024. The Company's full year
2023 outlook, which includes the 53rd week, is
summarized in the table below.
Note the Company still intends to update the market on its
longer-term financial targets and updated capital allocation plans
when it reports fourth quarter results.
Metric
|
Prior Full Year
Guidance
|
Updated Full
Year Guidance
|
Fourth Quarter
Guidance
|
Commentary
|
Sales Change
|
Down 8.0% to
9.0%
|
Down 8.0% to
8.5%
|
Down 2.0% to
4.0%
|
Includes 1% annual lift
from the 53rd week
|
Comparable Sales
Change
|
Down 9.0% to
10.0%
|
Down 8.5% to
9.0%
|
Down 7.0% to
9.0%
|
|
Store Count
Change
|
Down ~9%
|
Down ~7%
|
|
Delayed timing of store
closures
|
Square Footage
Change
|
Down
~4%
|
Down ~2%
|
|
|
Licensing
Revenue
|
~$17
million
|
~$15
million
|
~$5 million
|
|
Gross Margin
|
27.8% to
28.0%
|
27.8%-27.9%
|
27.0% to
27.2%
|
|
SG&A
Rate
|
22.7% to
22.9%
|
22.8%-22.9%
|
22.7% to
23.0%
|
|
D&A
|
~$203
million
|
~$200
million
|
~$50 million
|
|
Interest
|
~$12
million
|
~$11 million
|
~$4 million
|
|
Non-GAAP Tax
Rate
|
~ 33.0%
|
~36.0%
|
~33.0%-34.0%
|
|
Non-GAAP EPS
|
$1.30-$1.50
|
$1.30-$1.40
|
$0.26-$0.36
|
Includes $0.11 from the
53rd week
|
Adj. Capital
Expenditures*
|
~$290
million
|
~$275
million
|
|
Project
timing
|
|
* 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 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 is hosting a live conference call at 9:00 a.m. ET today, November 29, 2023, to review these results and
provide an update on the business. An investor presentation will be
available under the Investor Relations section of the Company's
corporate website before the start of the conference call.
This conference call may be accessed live by calling toll-free
1-844-701-1163 or international toll 1-412-317-5490, or via the
Investor Relations section of footlocker-inc.com. Please log on to
the website 15 minutes prior to the call to register. An archived
replay of the conference call can be accessed approximately one
hour following the end of the call at 1-877-344-7529 in the U.S.,
1-855-669-9658 in Canada, and
1-412-317-0088 internationally with passcode 5718718 through
December 13, 2023. A replay of the
call will also be available via webcast from
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
|
(unaudited)
|
|
Periods ended
October 28, 2023 and October 29, 2022
|
(In millions, except
per share amounts)
|
|
|
|
Third
Quarter
|
|
|
Year-to-Date
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Sales
|
|
$
|
1,986
|
|
|
$
|
2,173
|
|
|
$
|
5,774
|
|
|
$
|
6,413
|
|
Licensing
revenue
|
|
|
3
|
|
|
|
3
|
|
|
|
10
|
|
|
|
9
|
|
Total
revenue
|
|
|
1,989
|
|
|
|
2,176
|
|
|
|
5,784
|
|
|
|
6,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
1,443
|
|
|
|
1,477
|
|
|
|
4,149
|
|
|
|
4,323
|
|
Selling, general and
administrative expenses
|
|
|
446
|
|
|
|
467
|
|
|
|
1,319
|
|
|
|
1,382
|
|
Depreciation and
amortization
|
|
|
47
|
|
|
|
52
|
|
|
|
148
|
|
|
|
157
|
|
Impairment and
other
|
|
|
6
|
|
|
|
20
|
|
|
|
59
|
|
|
|
38
|
|
Income from
operations
|
|
|
47
|
|
|
|
160
|
|
|
|
109
|
|
|
|
522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(2)
|
|
|
|
(3)
|
|
|
|
(7)
|
|
|
|
(13)
|
|
Other income /
(expense), net
|
|
|
2
|
|
|
|
(14)
|
|
|
|
(1)
|
|
|
|
(33)
|
|
Income before income
taxes
|
|
|
47
|
|
|
|
143
|
|
|
|
101
|
|
|
|
476
|
|
Income tax
expense
|
|
|
19
|
|
|
|
47
|
|
|
|
42
|
|
|
|
154
|
|
Net income
|
|
|
28
|
|
|
|
96
|
|
|
|
59
|
|
|
|
322
|
|
Net loss attributable
to noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Net income attributable
to Foot Locker, Inc.
|
|
$
|
28
|
|
|
$
|
96
|
|
|
$
|
59
|
|
|
$
|
323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.30
|
|
|
$
|
1.01
|
|
|
$
|
0.63
|
|
|
$
|
3.38
|
|
Weighted-average
diluted shares outstanding
|
|
|
94.7
|
|
|
|
94.7
|
|
|
|
94.9
|
|
|
|
95.7
|
|
Non-GAAP Financial Measures
In addition to reporting the Company's financial results in
accordance with generally accepted accounting principles ("GAAP"),
the Company reports certain financial results that differ from what
is reported under GAAP. Non-GAAP financial measures that will be
presented will exclude (i) gains or losses related to our minority
investments, (ii) impairments and other, and (iii) certain tax
matters that we believe are nonrecurring or unusual in nature.
Certain financial measures are identified as non-GAAP, such as
sales changes excluding foreign currency fluctuations, adjusted
income before income taxes, adjusted net income, and adjusted
diluted earnings per share. We present certain amounts as excluding
the effects of foreign currency fluctuations, which are also
considered non-GAAP measures. Where amounts are expressed as
excluding the effects of foreign currency fluctuations, such
changes are determined by translating all amounts in both years
using the prior-year average foreign exchange rates. Presenting
amounts on a constant currency basis is useful to investors because
it enables them to better understand the changes in our business
that are not related to currency movements.
These non-GAAP measures are presented because we believe they
assist investors in comparing our performance across reporting
periods on a consistent basis by excluding items that we do not
believe are indicative of our core business or affect
comparability. In addition, these non-GAAP measures are useful in
assessing our progress in achieving our long-term financial
objectives and are consistent with how executive compensation is
determined.
We estimate the tax effect of all non-GAAP adjustments by
applying a marginal tax rate to each item. The income tax items
represent the discrete amount that affected the period. The
non-GAAP financial information is provided in addition, and not as
an alternative, to our reported results prepared in accordance with
GAAP. The various non-GAAP adjustments are summarized in the tables
below.
FOOT LOCKER,
INC.
|
Non-GAAP
Reconciliation
|
(unaudited)
|
|
Periods ended
October 28, 2023 and October 29, 2022
|
(In millions, except
per share amounts)
|
|
Reconciliation of
GAAP to non-GAAP results:
|
|
|
|
Third
Quarter
|
|
|
Year-to-Date
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
|
2022
|
|
Pre-tax
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
$
|
47
|
|
|
$
|
143
|
|
|
$
|
101
|
|
|
$
|
476
|
|
Pre-tax adjustments
excluded from GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and other
(1)
|
|
|
6
|
|
|
|
20
|
|
|
|
59
|
|
|
|
38
|
|
Other income / expense
(2)
|
|
|
(5)
|
|
|
|
14
|
|
|
|
(6)
|
|
|
|
32
|
|
Adjusted income before
income taxes (non-GAAP)
|
|
$
|
48
|
|
|
$
|
177
|
|
|
$
|
154
|
|
|
$
|
546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Foot Locker, Inc.
|
|
$
|
28
|
|
|
$
|
96
|
|
|
$
|
59
|
|
|
$
|
323
|
|
After-tax adjustments
excluded from GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and other,
net of income tax benefit of $2, $5, $11, and $10 million,
respectively (1)
|
|
|
4
|
|
|
|
15
|
|
|
|
48
|
|
|
|
28
|
|
Other income /
expense, net of income tax (expense)/benefit of
$(1), $4, $(1), and $7 million, respectively
(2)
|
|
|
(4)
|
|
|
|
10
|
|
|
|
(5)
|
|
|
|
25
|
|
Tax reserves benefit /
charge (3)
|
|
|
—
|
|
|
|
—
|
|
|
|
(4)
|
|
|
|
5
|
|
Adjusted net income
(non-GAAP)
|
|
$
|
28
|
|
|
$
|
121
|
|
|
$
|
98
|
|
|
$
|
381
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
Year-to-Date
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.30
|
|
|
$
|
1.01
|
|
|
$
|
0.63
|
|
|
$
|
3.38
|
|
Diluted EPS amounts
excluded from GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and othe
(1)
|
|
|
0.04
|
|
|
|
0.16
|
|
|
|
0.51
|
|
|
|
0.29
|
|
Other income / expense
(2)
|
|
|
(0.04)
|
|
|
|
0.10
|
|
|
|
(0.06)
|
|
|
|
0.26
|
|
Tax reserves benefit /
charge (3)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.04)
|
|
|
|
0.05
|
|
Adjusted diluted
earnings per share (non-GAAP)
|
|
$
|
0.30
|
|
|
$
|
1.27
|
|
|
$
|
1.04
|
|
|
$
|
3.98
|
|
Notes on Non-GAAP Adjustments:
(1)
|
For the third
quarter of 2023, impairment and other included $7 million of
reorganization costs, primarily related to severance and
transformation consulting expense of $1 million. Additionally
in the quarter, we recorded a $3 million net benefit from the
settlement of lease obligations associated with Sidestep
stores, partially offset by impairment on atmos U.S. assets of $1
million. For year-to-date 2023, impairment and other
included transformation consulting expense
of $27 million, impairment
charges of $19 million, primarily accelerated
tenancy charges on right-of-use assets for the closures of the
Sidestep banner and certain Foot Locker Asia stores,
and $12 million of reorganization costs, related to
severance and the closure of the Sidestep banner, certain Foot
Locker Asia stores, and a North American distribution
center.
For the third quarter
of 2022, impairment and other charges included $17 million of
transformation consulting, $2 million of severance costs for the
closure of a North American distribution center, and $1 million of
acquisition integration costs. For year-to-date 2022, impairment
and other charges included $27 million of transformation
consulting, $5 million of impairment of long-lived assets and
right-of-use assets and accelerated tenancy charges, $4 million of
acquisition integration costs, and $2 million of severance costs
related to the distribution center closure.
|
(2)
|
For
the third quarter of
2023, other income / expense
consisted of a $3 million gain from the sale of a North American
corporate office property and an additional $2 million
gain from the second quarter sale of our Singapore and
Malaysian Foot Locker businesses to our license partner. The
2023 year-to-date period also included $1 million of our share of
losses related to equity method investments.
Other income / expense
for the third quarter of 2022 primarily consisted of a $15 million
loss on minority investments, primarily due to a change in fair
value of the investment in Retailors, Ltd., a publicly-listed
entity, partially offset by an additional $1 million gain on the
divestiture of the Team Sales business that occurred in the second
quarter. The year-to-date 2022 amount includes $52 million of
losses on minority investments, primarily from Retailors, Ltd., a
$19 million gain on the Team Sales business divestiture, and $1
million of dividend income.
|
(3)
|
In the
first quarter of 2023, the Company recorded a $4 million
benefit related to income tax reserves due to a statute of
limitations release. In the second quarter of 2022, the Company
recorded a $5 million charge related to income tax reserves due to
the resolution of a foreign tax settlement.
|
FOOT LOCKER,
INC.
|
Sales by
Banner
|
(unaudited)
|
|
Periods ended
October 28, 2023 and October 29,
2022
|
(In
millions)
|
|
|
|
Third
Quarter
|
|
|
Year-to-Date
|
|
|
|
2023
|
|
|
2022
|
|
|
Constant
Currencies
|
|
|
Comparable
Sales
|
|
|
2023
|
|
|
2022
|
|
|
Constant
Currencies
|
|
|
Comparable
Sales
|
|
Foot Locker
|
|
$
|
796
|
|
|
$
|
852
|
|
|
|
(6.5)
|
%
|
|
|
(4.9)
|
%
|
|
$
|
2,244
|
|
|
$
|
2,411
|
|
|
|
(6.5)
|
%
|
|
|
(5.0)
|
%
|
Champs
Sports
|
|
|
311
|
|
|
|
406
|
|
|
|
(23.4)
|
|
|
|
(20.9)
|
|
|
|
932
|
|
|
|
1,266
|
|
|
|
(26.1)
|
|
|
|
(23.6)
|
|
Kids Foot
Locker
|
|
|
189
|
|
|
|
181
|
|
|
|
4.4
|
|
|
|
5.0
|
|
|
|
502
|
|
|
|
516
|
|
|
|
(2.7)
|
|
|
|
(2.4)
|
|
WSS
|
|
|
163
|
|
|
|
162
|
|
|
|
0.6
|
|
|
|
(9.4)
|
|
|
|
458
|
|
|
|
438
|
|
|
|
4.6
|
|
|
|
(7.0)
|
|
Other
|
|
|
1
|
|
|
|
21
|
|
|
|
n.m.
|
|
|
|
n.m.
|
|
|
|
1
|
|
|
|
111
|
|
|
|
n.m.
|
|
|
|
n.m.
|
|
North
America
|
|
|
1,460
|
|
|
|
1,622
|
|
|
|
(10.0)
|
|
|
|
(9.5)
|
|
|
|
4,137
|
|
|
|
4,742
|
|
|
|
(12.5)
|
|
|
|
(11.5)
|
|
Foot Locker
|
|
|
407
|
|
|
|
392
|
|
|
|
(5.6)
|
|
|
|
(3.9)
|
|
|
|
1,202
|
|
|
|
1,173
|
|
|
|
(0.6)
|
|
|
|
(1.3)
|
|
Sidestep
|
|
|
—
|
|
|
|
20
|
|
|
|
n.m.
|
|
|
|
n.m.
|
|
|
|
26
|
|
|
|
69
|
|
|
|
(63.8)
|
|
|
|
(38.3)
|
|
EMEA
|
|
|
407
|
|
|
|
412
|
|
|
|
(10.2)
|
|
|
|
(4.2)
|
|
|
|
1,228
|
|
|
|
1,242
|
|
|
|
(4.1)
|
|
|
|
(2.5)
|
|
Foot Locker
|
|
|
81
|
|
|
|
99
|
|
|
|
(16.2)
|
|
|
|
(1.2)
|
|
|
|
281
|
|
|
|
292
|
|
|
|
-
|
|
|
|
6.3
|
|
atmos
|
|
|
38
|
|
|
|
40
|
|
|
|
5.0
|
|
|
|
0.8
|
|
|
|
128
|
|
|
|
137
|
|
|
|
(0.7)
|
|
|
|
(2.8)
|
|
Asia Pacific
|
|
|
119
|
|
|
|
139
|
|
|
|
(10.1)
|
|
|
|
(0.5)
|
|
|
|
409
|
|
|
|
429
|
|
|
|
(0.2)
|
|
|
|
3.4
|
|
Total
|
|
$
|
1,986
|
|
|
$
|
2,173
|
|
|
|
(10.0)
|
%
|
|
|
(8.0)
|
%
|
|
$
|
5,774
|
|
|
$
|
6,413
|
|
|
|
(10.0)
|
%
|
|
|
(8.9)
|
%
|
FOOT LOCKER,
INC.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
(In
millions)
|
|
|
|
October
28,
|
|
|
October
29,
|
|
|
|
2023
|
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
187
|
|
|
$
|
351
|
|
Merchandise
inventories
|
|
|
1,862
|
|
|
|
1,685
|
|
Other current
assets
|
|
|
325
|
|
|
|
302
|
|
|
|
|
2,374
|
|
|
|
2,338
|
|
Property and equipment,
net
|
|
|
884
|
|
|
|
897
|
|
Operating lease
right-of-use assets
|
|
|
2,182
|
|
|
|
2,449
|
|
Deferred
taxes
|
|
|
91
|
|
|
|
65
|
|
Goodwill
|
|
|
763
|
|
|
|
764
|
|
Other intangible
assets, net
|
|
|
407
|
|
|
|
424
|
|
Minority
investments
|
|
|
630
|
|
|
|
722
|
|
Other assets
|
|
|
89
|
|
|
|
103
|
|
|
|
$
|
7,420
|
|
|
$
|
7,762
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
593
|
|
|
$
|
522
|
|
Accrued and other
liabilities
|
|
|
369
|
|
|
|
455
|
|
Current portion of
long-term debt and obligations under finance leases
|
|
|
6
|
|
|
|
6
|
|
Current portion of
lease obligations
|
|
|
491
|
|
|
|
539
|
|
|
|
|
1,459
|
|
|
|
1,522
|
|
Long-term debt and
obligations under finance leases
|
|
|
443
|
|
|
|
448
|
|
Long-term lease
obligations
|
|
|
1,994
|
|
|
|
2,212
|
|
Other
liabilities
|
|
|
319
|
|
|
|
321
|
|
Total
liabilities
|
|
|
4,215
|
|
|
|
4,503
|
|
Total shareholders'
equity
|
|
|
3,205
|
|
|
|
3,259
|
|
|
|
$
|
7,420
|
|
|
$
|
7,762
|
|
FOOT LOCKER,
INC.
|
Condensed
Consolidated Statement of Cash Flows
|
(unaudited)
|
(In
millions)
|
|
|
|
Thirty-nine weeks
ended
|
|
|
|
October
28,
|
|
|
October
29,
|
|
($ in
millions)
|
|
2023
|
|
|
2022
|
|
From operating
activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
59
|
|
|
$
|
322
|
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
|
|
|
Non-cash impairment
and other
|
|
|
20
|
|
|
|
5
|
|
Fair value adjustments
to minority investments
|
|
|
—
|
|
|
|
52
|
|
Depreciation and
amortization
|
|
|
148
|
|
|
|
157
|
|
Deferred income
taxes
|
|
|
(5)
|
|
|
|
14
|
|
Share-based
compensation expense
|
|
|
9
|
|
|
|
25
|
|
Gain on sales of
businesses
|
|
|
(4)
|
|
|
|
(19)
|
|
Gain on sale of
property
|
|
|
(3)
|
|
|
|
—
|
|
Change in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Merchandise
inventories
|
|
|
(249)
|
|
|
|
(466)
|
|
Accounts
payable
|
|
|
110
|
|
|
|
(58)
|
|
Accrued and other
liabilities
|
|
|
(131)
|
|
|
|
(46)
|
|
Other, net
|
|
|
(52)
|
|
|
|
(18)
|
|
Net cash used in
operating activities
|
|
|
(98)
|
|
|
|
(32)
|
|
From investing
activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(165)
|
|
|
|
(218)
|
|
Purchase of business,
net of cash acquired
|
|
|
—
|
|
|
|
(18)
|
|
Minority
investments
|
|
|
(2)
|
|
|
|
(5)
|
|
Proceeds from sales of
businesses
|
|
|
16
|
|
|
|
47
|
|
Proceeds from minority
investments
|
|
|
—
|
|
|
|
12
|
|
Proceeds from sale of
property
|
|
|
6
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(145)
|
|
|
|
(182)
|
|
From financing
activities:
|
|
|
|
|
|
|
|
|
Dividends paid on
common stock
|
|
|
(113)
|
|
|
|
(113)
|
|
Purchase of treasury
shares
|
|
|
—
|
|
|
|
(129)
|
|
Payment of obligations
under finance leases
|
|
|
(5)
|
|
|
|
(5)
|
|
Shares of common stock
repurchased to satisfy tax withholding obligations
|
|
|
(10)
|
|
|
|
(1)
|
|
Treasury stock
reissued under employee stock plan
|
|
|
3
|
|
|
|
3
|
|
Proceeds from exercise
of stock options
|
|
|
5
|
|
|
|
4
|
|
Contribution from
non-controlling interest
|
|
|
—
|
|
|
|
4
|
|
Net cash used in
financing activities
|
|
|
(120)
|
|
|
|
(237)
|
|
Effect of exchange rate
fluctuations on cash, cash equivalents, and restricted
cash
|
|
|
4
|
|
|
|
(6)
|
|
Net change in cash,
cash equivalents, and restricted cash
|
|
|
(359)
|
|
|
|
(457)
|
|
Cash, cash equivalents,
and restricted cash at beginning of year
|
|
|
582
|
|
|
|
850
|
|
Cash, cash
equivalents, and restricted cash at end of period
|
|
$
|
223
|
|
|
$
|
393
|
|
FOOT LOCKER,
INC.
|
Store Count and
Square Footage
|
(unaudited)
|
|
Store activity is as
follows:
|
|
|
|
January
28,
|
|
|
|
|
|
|
|
|
|
|
October
28,
|
|
|
Relocations/
|
|
|
|
2023
|
|
|
Opened
|
|
|
Closed
|
|
|
2023
|
|
|
Remodels
|
|
Foot Locker
U.S.
|
|
|
747
|
|
|
|
2
|
|
|
|
9
|
|
|
|
740
|
|
|
|
24
|
|
Foot Locker
Canada
|
|
|
86
|
|
|
|
—
|
|
|
|
2
|
|
|
|
84
|
|
|
|
4
|
|
Champs
Sports
|
|
|
486
|
|
|
|
1
|
|
|
|
12
|
|
|
|
475
|
|
|
|
6
|
|
Kids Foot
Locker
|
|
|
394
|
|
|
|
2
|
|
|
|
4
|
|
|
|
392
|
|
|
|
9
|
|
WSS
|
|
|
115
|
|
|
|
16
|
|
|
|
2
|
|
|
|
129
|
|
|
|
—
|
|
Footaction
|
|
|
2
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
—
|
|
North
America
|
|
|
1,830
|
|
|
|
21
|
|
|
|
30
|
|
|
|
1,821
|
|
|
|
43
|
|
Foot Locker Europe
(1)
|
|
|
644
|
|
|
|
24
|
|
|
|
26
|
|
|
|
642
|
|
|
|
17
|
|
Sidestep
|
|
|
78
|
|
|
|
—
|
|
|
|
78
|
|
|
|
—
|
|
|
|
—
|
|
EMEA
|
|
|
722
|
|
|
|
24
|
|
|
|
104
|
|
|
|
642
|
|
|
|
17
|
|
Foot Locker
Pacific
|
|
|
94
|
|
|
|
4
|
|
|
|
1
|
|
|
|
97
|
|
|
|
10
|
|
Foot Locker
Asia
|
|
|
33
|
|
|
|
—
|
|
|
|
20
|
|
|
|
13
|
|
|
|
—
|
|
atmos
|
|
|
35
|
|
|
|
1
|
|
|
|
2
|
|
|
|
34
|
|
|
|
—
|
|
Asia Pacific
|
|
|
162
|
|
|
|
5
|
|
|
|
23
|
|
|
|
144
|
|
|
|
10
|
|
Total
|
|
|
2,714
|
|
|
|
50
|
|
|
|
157
|
|
|
|
2,607
|
|
|
|
70
|
|
Selling and gross
square footage are as follows:
|
|
|
October 29,
2022
|
October 28,
2023
|
(in
thousands)
|
Selling
|
Gross
|
Selling
|
Gross
|
Foot Locker
U.S.
|
|
2,382
|
|
4,105
|
|
2,383
|
|
4,063
|
Foot Locker
Canada
|
|
248
|
|
408
|
|
250
|
|
412
|
Champs
Sports
|
|
1,879
|
|
2,940
|
|
1,778
|
|
2,792
|
Kids Foot
Locker
|
|
751
|
|
1,267
|
|
760
|
|
1,271
|
WSS
|
|
1,067
|
|
1,341
|
|
1,332
|
|
1,600
|
Footaction
|
|
29
|
|
51
|
|
3
|
|
6
|
North
America
|
|
6,356
|
|
10,112
|
|
6,506
|
|
10,144
|
Foot Locker Europe
(1)
|
|
1,148
|
|
2,371
|
|
1,190
|
|
2,433
|
Sidestep
|
|
100
|
|
189
|
|
-
|
|
-
|
EMEA
|
|
1,248
|
|
2,560
|
|
1,190
|
|
2,433
|
Foot Locker
Pacific
|
|
204
|
|
315
|
|
235
|
|
356
|
Foot Locker
Asia
|
|
126
|
|
233
|
|
52
|
|
98
|
atmos
|
|
37
|
|
66
|
|
35
|
|
61
|
Asia Pacific
|
|
367
|
|
614
|
|
322
|
|
515
|
Total
|
|
7,971
|
|
13,286
|
|
8,018
|
|
13,092
|
|
|
(1)
|
Includes 16 and 14 Kids
Foot Locker stores, and the related square footage, operating in
Europe for January 28, 2023 and October 28, 2023,
respectively.
|
Contacts:
|
Kate
Fitzsimons
Investor
Relations
ir@footlocker.com
(212)
720-4600
Olivia Mata
Corporate
Communications
mediarelations@footlocker.com
(815)
763-3159
|
View original
content:https://www.prnewswire.com/news-releases/foot-locker-inc-reports-2023-third-quarter-results-narrows-2023-outlook-301999897.html
SOURCE Foot Locker IR