Foot Locker Inc. Reports Operating Results (10-Q)
Foot Locker Inc. (FL) filed Quarterly Report for the period ended 2009-10-31.
Foot Locker, Inc. is a leading global retailer operating primarily mall-based stores in North America, Europe, Asia and Australia. the company operates in two business segments, the Global Athletic Group and the Northern Group. the Global Athletic Group operates the following retail stores: Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Footlocker.com. the Northern Group consists of four apparel formats:Northern Reflections, Northern Traditions, Northern Getaway and NorthernElements. Foot Locker Inc. has a market cap of $1.49 billion; its shares were traded at around $9.52 with a P/E ratio of 17.6 and P/S ratio of 0.3. the dividend yield of Foot Locker Inc. stocks is 6.3%. Foot Locker Inc. had an annual average earning growth of 18.8% over the past 10 years.
Highlight of Business Operations:
Corporate expense consists of unallocated general and administrative expenses as well as depreciation and amortization related to the Company s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items. Corporate expense for the thirteen weeks ended October 31, 2009 was $16 million as compared with $17 million from the corresponding prior-year period. Corporate expense for the thirty-nine weeks ended October 31, 2009 decreased by $25 million to $45 million from the corresponding prior-year period. Included in the thirteen and thirty-nine weeks ended November 1, 2008 is an impairment charge of $3 million, which was recorded to reduce the fair value of a short-term investment. Additionally, included in the thirty-nine weeks ended November 1, 2008 was the impairment charge of $15 million associated with a note receivable due from the purchaser of the Company s former Northern Group operation in Canada. Excluding these charges, corporate expense increased by $2 million for the thirteen weeks and decreased $7 million for the thirty-nine weeks ended October 31, 2009. the increase for the thirteen weeks primarily represents higher share-based compensation expense and pension expense. the decrease for the thirty-nine weeks ended October 31, 2009 primarily represents decreased incentive compensation, offset, in part, by higher pension expense.
Depreciation and amortization decreased by $3 million in the third quarter of 2009 to $29 million as compared with $32 million for the third quarter of 2008. Depreciation and amortization decreased by $12 million for the thirty-nine weeks ended October 31, 2009 to $85 million as compared with $97 million for the thirty-nine weeks ended November 1, 2008. Excluding the effect of foreign currency fluctuations, primarily related to the euro, depreciation and amortization decreased by $3 million and $9 million for the thirteen and thirty-nine weeks ended October 31, 2009, respectively, as compared with the corresponding prior-year periods. the decrease for the quarter and the year-to-date periods primarily reflects reduced depreciation and amortization of approximately $4 million and $12 million, respectively, as a result of the impairment charges recorded during the fourth quarter of 2008, offset by the effect of prior-year capital spending and the amortization expense associated with the CCS customer list intangible asset.
For the thirteen weeks ended October 31, 2009, the Company reported a net loss from continuing operations of $6 million or $0.04 per diluted share, which included impairment charges totaling $22 million, after-tax, or $0.14 per diluted share. This is compared with net income from continuing operations of $24 million for the thirteen weeks ended November 1, 2008 or $0.16 per diluted share, which included an impairment charge of $3 million or $0.02 per diluted share related to the write-down of the value of a short-term investment. For the thirty-nine weeks ended October 31, 2009, net income from continuing operations was $24 million or $0.16 per diluted share as compared with $45 million or $0.29 per diluted share for the corresponding prior-year period. Included in the thirty-nine weeks ended November 1, 2008 are charges totaling $21 million (after-tax), or $0.14 per share, representing an impairment charge of $3 million related to the write-down of the value of a short-term investment, an impairment charge of $15 million related to the Northern Group note receivable, and expenses of $3 million related to the store closing program. Excluding impairment charges and store closing program costs, diluted earnings per share on a non-GAAP basis would have been $0.10 per diluted share and $0.30 per diluted share for the thirteen and thirty-nine weeks ended October 31, 2009, respectively, which compares with $0.18 per diluted share and $0.43 per diluted share for the thirteen and thirty-nine weeks ended November 1, 2008, respectively. the Company believes this non-GAAP measure is a useful measure to our investors as it allows for a more direct comparison to the Company s financial performance for the current periods to performance in the prior periods.
Net cash provided by operating activities was $140 million and $210 million for the thirty-nine weeks ended October 31, 2009 and November 1, 2008, respectively. these amounts reflect net income adjusted for non-cash items and working capital changes. Included in the thirteen weeks ended October 31, 2009, are non-cash impairment charges totaling $36 million, of which $32 million was recorded to write-down long-lived assets such as store fixtures and leasehold improvements at the Company s Lady Foot Locker, Kids Foot Locker, Footaction and Champs Sports divisions and $4 million to write off software development costs. during the thirty-nine weeks ended November 1, 2008, the Company recorded a $15 million non-cash impairment charge related to the Northern Group note receivable and a $3 million charge related to the write-down of a short-term investment. during the thirty-nine weeks ended October 31, 2009, the Company terminated its interest rate swaps for a gain of $19 million. Additionally, during the thirty-nine weeks ended October 31, 2009, the Company contributed $40 million to its U.S. and Canadian qualified pension plans as compared with a $6 million contribution to the Canadian qualified pension plan in the corresponding prior-year period. no further pension contributions are required in 2009; however the Company may make additional contributions to its U.S. plan depending on the pension fund s asset performance and other factors.
Net cash used in investing activities was $59 million and $188 million for the thirty-nine weeks ended October 31, 2009 and November 1, 2008, respectively. during the second quarter of 2009, the Company received $10 million, representing further redemptions from the Reserve International Liquidity Fund. the remaining investment of $13 million is classified as a short-term investment in the Condensed Consolidated Balance Sheet at October 31, 2009. Capital expenditures were $70 million for the thirty-nine weeks ended October 31, 2009 as compared with $116 million in the corresponding prior-year period reflecting the Company s strategic decision to reduce its capital plan for 2009 due to the uncertain external environment. Capital expenditures for the full-year of 2009 are expected to total approximately $93 million, of which $71 million relates to modernizations of existing stores and new store openings, and $22 million reflects the development of information systems and other support facilities. the Company has the ability to revise and reschedule the anticipated capital expenditure program should the Company s financial position require it.
Net cash used in financing activities was $71 million and $162 million for the thirty-nine weeks ended October 31, 2009 and November 1, 2008, respectively. during the thirty-nine weeks ended October 31, 2009 and November 1, 2008, the Company purchased and retired $3 million and $6 million, respectively, of its 8.50 percent debentures payable in 2022. Additionally, during the thirty-nine weeks ended November 1, 2008 the Company made payments of $88 million, which fully repaid its 5-year term loan. the Company declared and paid dividends totaling $70 million for both the thirty-nine weeks ended October 31, 2009 and November 1, 2008, representing a quarterly rate of $0.15 per share. the Company received proceeds from the issuance of common stock in connection with employee stock programs of $2 million for both the thirty-nine weeks ended October 31, 2009 and November 1, 2008.
Read the the complete Report
FL is in the portfolios of Robert Rodriguez of FPA Capital, first Pacific Advisors of first Pacific Advisors, LLC, Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES, Jeremy Grantham of GMO LLC.
Foot Locker Inc. Reports Operating Results (10-Q)
Related posts:
- Foot Locker Blog » Blog Archive » Zoom Kobe V Black/Dark Grey …
- Research In Motion Reports Third Quarter Results
- Talented QB Locker staying at Washington
- Washington Quarterback Jake Locker to Return for Senior Year
- How Much Money Will Jake Locker Lose by Returning to Washington?