Foot Locker Q2 profit, sales top estimates
New York — Foot Locker on Friday turned in another winning performance, posting sales and income for the second quarter that topped analysts’ estimates.
Net income for the quarter increased to $92 million, from $66 million in the year-ago period.
Total sales increased 12.9%, to $1.64 billion, compared with $1.45 billion for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the second quarter increased 11.7%.
Same-store sales rose 7%. Analysts had predicted a gain of 5.4%.
“The team at Foot Locker once again achieved record levels of sales and profits in the second quarter, and I am extremely proud of their efforts," said Ken C. Hicks, chairman and CEO. "We delivered excellent financial and operational results through the outstanding execution of our strategic priorities. This continues to be a winning formula for us, and we remain committed to taking full advantage of the many opportunities we have identified — over the near, intermediate, and longer terms — to continue producing a consistent, strong performance."
During the second quarter, Foot Locker repurchased approximately 1.33 million shares of its common stock for $66 million.
"So far this year, we have returned $200 million of cash to our shareholders through our dividend and share repurchase programs," said Lauren B. Peters, executive VP and CFO. "Our strong financial position has enabled us to consistently increase those programs in recent years while we have also made substantial investments in the business, including the $220 million of capital expenditures we are targeting for fiscal 2014."
As of Aug. 2, the company operated 3,460 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 47 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 27 franchised Runners Point and Sidestep stores in Germany and Switzerland.
RockTenn expands store-within-store capability
Leading packaging solutions provider RockTenn acquired the AGI In-Store point-of-purchase display and fixture business from American Greetings.
AGI In-Store is a non-core division of American Greetings that manufactures point-of-purchase displays and fixtures for the consumer products and retail industries and employs roughly 300 people at its Forest City, N.C., facility. As a result of the acquisition, AGI In-Store will now go to market as RockTenn In-Store Solutions.
"AGI In-Store is an excellent strategic fit with RockTenn Merchandising Displays," said Craig Gunckel, EVP of merchandising displays and folding carton with RockTenn. "Adding AGI In-Store supports our strategy to provide a more holistic portfolio of innovative in-store marketing solutions, including 'store-within-a-store' displays."
"We are pleased that the impressive business model of AGI In-Store will be able to expand to its fullest potential under RockTenn's ownership," said Zev Weiss, Co-CEO of American Greetings. "We look forward to maintaining our long-standing relationship with the company as one of its customers for retail fixtures."
RockTenn is one of North America's leading providers of packaging solutions and manufacturers of containerboard and paperboard. The company’s 26,000 employees work at numerous locations in United States, Canada, Mexico, Chile and Argentina.
Old Navy buoys Gap in second quarter
Although same-store sales at Gap were flat in the second quarter, the company reported a better-than-expected quarterly profit, buoyed by strong sales at Old Navy, and raised its full-year profit forecast as a result.
Net profit rose to $332 million in the quarter from $303 million a year ago.
Revenue increased 3% to $3.98 billion. Online net sales increased 11% to $515 million, on top of last year’s 27% increase. The company noted it continues to advance its successful omnichannel platform with the expansion of its reserve in store service to all U.S. Gap stores. The company also launched its order-in-store pilot, with plans to roll out the service to select U.S. Gap, Banana Republic, Old Navy and Athleta stores later this year.
Gap also plans to expand its reach to India through 40 franchise-operated stores. The retailer is partnering with Arvind Lifestyle Brand Limited, a subsidiary of Arvind Limited, which is one of India’s largest textile companies.
“India is an emerging, vibrant market and an important next step in our global expansion strategy,” said Steve Sunnucks, global president of Gap.