US' Foot Locker's comparable store sales increased 0.8% in Q3 FY22

Excluding the effect of foreign exchange rate fluctuations, total sales for the third quarter increased by 3.3 per cent. The company’s reported net income was $96 million, or $1.01 per share, for the 13 weeks ended October 29, 2022, compared with $158 million, or $1.52 per share, for the corresponding prior-year period.

On a non-GAAP basis, Foot Locker earned $1.27 per share, compared with non-GAAP earnings of $1.74 per share in the prior-year period, the company said in a press release.

Foot Locker’s gross margin in Q3 FY22 declined by 270 basis points compared with the prior-year period, driven mainly by higher markdowns on increased promotional activity across the industry, and modest supply chain cost pressure. Selling, general and administrative expenses increased by 60 basis points, driven mainly by labour inflation, partially offset by early savings from the company's cost optimisation programme.

During the third quarter, Foot Locker opened 24 new stores, remodelled or relocated 23 stores, and closed 29 stores.

For the first nine months of the year, the company posted net income of $323 million, or $3.38 per share, compared with $790 million, or $7.54 per share, for the corresponding prior-year period. On a non-GAAP basis, earnings per share for the nine-month period totalled $3.98, compared to $5.80 in the corresponding prior-year period. Year-to-date (YTD) sales were $6,413 million, a decrease of 3.1 per cent compared to $6,617 million in the corresponding nine months of 2021. YTD comparable store sales decreased 3.9 per cent, while total YTD sales, excluding the effect of foreign currency fluctuations, decreased by 0.1 per cent.

At the end of Q3 FY22, Foot Locker's cash and cash equivalents totalled $351 million, while debt was $454 million. The merchandise inventories at the end of the third quarter of fiscal 2022 were $1,685 million, up 29.5 per cent compared to the end of the third quarter last year.

For the fourth quarter of fiscal 2022, the company expects the sales to be down by 8–10 per cent due to ongoing foreign currency pressure, while the full-year 2022 sales are expected to be down by 4–5 per cent. The comparable sales for Q4 FY22 are expected to decrease by 6–8 per cent, while the comparable sales for full-year 2022 are estimated to be down by 4–5 per cent. Foot Locker’s Q4 FY22 gross margin is expected to be around 29–29.3 per cent, while the full-year 2022 gross margin is estimated to be around 37.7–31.8 per cent due to ongoing promotional pressure.

Fibre2Fashion News Desk (DP)