Foot Locker Inc. is renewing its focus on female customers, as women’s footwear stood out among the top performers in the firm’s fourth-quarter earnings report.
In a conference call with analysts, chairman and CEO Dick Johnson said that Foot Locker’s women’s shoe business recorded its fifth consecutive quarter of positive same-store sales on top of last year’s high single-digit comp improvement. The performance, he added, was led by classic basketball silhouettes from Nike, Jordan Brand and Converse as well as Puma.
Further, the executive chief said the company ended 2019 with 34 “elevated” women’s spaces at Foot Locker, Champs Sports and Footaction stores in the United States, as well as 17 across Europe. This year, it plans to expand its dedicated women’s spaces to up to 50 internationally.
“We continue to invest in new dedicated spaces for our female customers, where we can inspire her with curated assortments and unique experiences,” Johnson added.
As a whole, Foot Locker’s footwear business was flat, compared with double-digit comp gains the prior year period. Its kids’ division produced a low single-digit gain, while men’s was down low single digits.
For the period ended Feb. 1, the company delivered a mixed quarter: It posted earnings of $1.63 per share, increasing 4% over the prior year period and beating Wall Street’s estimates of $1.58. Revenues, however, declined 2.2% to $2.22 billion, compared with expectations of $2.24 billion, and same-store sales slid 1.6%.
“Despite having leading positions in key on-trend styles, our results were pressured during what was a compressed holiday shopping season, with softer demand for seasonal categories in a very promotional apparel marketplace,” Johnson said.
During the call, the New York-based firm announced plans to triple its fleet of “Power Stores,” launching about 20 more locations in 2020 across the United States as well as in its international markets, following last year’s six openings. It also noted further expansion in Asia, with two new stores in the fourth quarter to bring the total number of outposts in the region to 14.
“We also intend to allocate capital to our core stores around the world,” Johnson added. “We have an opportunity to evolve our fleet, layering the best elements of our ‘Power Store’ offense, [and] improve the productivity of our existing square footage to drive faster growth through these investments.”
During the company’s investor day in March, Johnson said that Foot Locker had recalibrated its previous five-year strategic objectives and is now focused on four imperatives: elevating customer experience; investing in long-term growth; driving productivity; and leveraging the power of its talent pool, consisting of 40,000 employees in 27 countries. It also revealed expectations to see sales per square foot in the range of $525 to $575 from 2019 to 2023, with high-single-digit net income margin rates and earnings before interest reaching the low double digits.
As of 11:00 a.m. ET, Foot Locker’s stock was up nearly 5% to $35.16.
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