In a Q4 conference call today, Foot Locker announced that based on the results from two test CCS stores – located in Santa Monica, California and Garden State Plaza, New Jersey – the company plans to open an additional ten stores in 2010. Foot Locker President and CEO explained that the company plans to open approximately 40 stores and close a total of 150 under performing stores in 2010. A full report on Foot Locker’s Q4 results follow:
“Foot Locker, Inc. returned to profitability in the fourth quarter after hefty charges weighed down results in 2008. Excluding special charges, earnings reached to $39 million, or 24 cents per share in the fourth quarter ended Jan. 30, even with $39 million, or 25 cents, a year ago. Sales inched up 0.6%, to $1.33 billion from $1,317 million. Excluding the effect of foreign currency fluctuations, sales decreased 2.9%. Comps decreased 2.3%.
Net earnings in the latest quarter was $23 million, or 14 cents per share, for the fourth quarter this year, after including $16 million, after tax, or 10 cents per share, of inventory write-downs, corporate restructuring charges, and an income tax adjustment. In the year-ago period. In the year-ago period, the company reported a net loss of $125 million, or 81 cents per share, after including non-cash impairment charges of $164 million, after tax, or $1.06 per share.
The company took several initial steps during the fourth quarter as part of a new comprehensive strategic plan that Foot Locker, Inc. will initiate in 2010.
* Consolidated its Foot Locker, Lady Foot Locker, Kids Foot Locker and Footaction operations under one management structure
* Closed 106 under productive stores
* Eliminated 120 corporate and divisional field and home office positions
* Changed its merchandise aging standard to be aligned with the company’s new apparel strategy
The impact of these actions on the company’s fourth quarter results is outlined in the accompanying financial statements.
“We experienced an improving sales trend in both our U.S. and international operations as we progressed through the fourth quarter, including a comparable-store sales increase for the month of January that has continued through the month of February,” stated Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker, Inc. “I am pleased with our operational execution during the quarter as we managed our inventories effectively and maintained tight expense controls. This, coupled with the strategic steps that we took during the fourth quarter, position us well as we head into 2010 and focus on driving both the near- and long-term growth of our business.”
Fiscal Year Financial Results
For the fiscal year, the company reported net income of $48 million, or $0.30 per share, including an inventory write-down, corporate restructuring charges, the write-down of long-lived assets, and an income tax adjustment that total $38 million, after-tax, or $0.24 per share. Excluding the charges, year-to-date net income was $86 million, or $0.54 per share.
The company reported a net loss last year of $80 million, or $0.52 per share, which included impairment charges and store closing expenses of $185 million, after tax, or $1.20 per share. Before the impairment and other charges, net income was $105 million, or $0.68 per share, in the 2008 fiscal year.
For the full year, sales decreased 7.3% to $4,854 million compared with sales of $5,237 million last year. Excluding the effect of foreign currency fluctuations, total sales for the full year decreased 6.1%. Comparable-store sales decreased 6.3%.
During the past 12 months the company generated $468 million of positive cash flow before capital expenditures, pension contributions and shareholder dividends. At year end, the company’s cash and short-term investments totaled $589 million. The company’s total cash position, net of debt, of $451 million was $185 million higher than last year. Merchandise inventory at year end was $1,037 million, which was $83 million, or 7.4%, less than at the end of last year.
On February 16, 2010, the Board of Directors of Foot Locker, Inc. approved the extension of the company’s 2007 common share repurchase program for an additional three years in the amount of $250 million.
Store Base Update
During the year, the company opened 38 stores and remodeled or relocated 158 stores. The company also closed a total of 179 stores in 2009, most of which were unproductive. At January 30, 2010, the company operated 3,500 stores in 21 countries in North America, Europe and Australia. In addition, 22 franchised stores are currently operating in the Middle East and South Korea.
Condensed Consolidated Statements of Operations
Periods ended January 30, 2010 and January 31, 2009
(In millions, except per share amounts)”