US specialty retailer Foot Locker posts multifold jump in net income

24 Aug '21

2 min read

Pic: Shutterstock

Second quarter (Q2) sales at Foot Locker, a US-based specialty athletic retailer, increased 9.5 per cent to $2.2 billion compared to the sales of $2.0 billion in the corresponding period of prior year and 28.2 per cent up against 2019. Whereas net income for the quarter ended on July 31, 2021, skyrocketed almost 10x to $430 million (Q2 FY20: $45 million).

“Our strong performance this quarter reflects the health of our category, the deep engagement we have with our customers, and the strategic nature of our relationships with our vendor partners,” Richard Johnson, chairman and chief executive officer at Foot Locker, said in a press release. “This quarter reflects strong results in our women's and kids' footwear business along with broad demand for our apparel and accessories offerings, which combined with more limited promotional activity, led to the outstanding top and bottom line results.”

Cost of sales during Q2 slipped to $1.4 billion ($1.5 billion), while selling, general & administrative expenses were $450 million ($387 million). The company’s income from operations escalated to $264 million ($69 million).

“Many of the trends we saw in the first quarter continued into the second quarter, with the combination of robust demand and fresh and lean inventory driving meaningfully lower levels of promotional activity and resulting in a gross margin of 35.1 per cent, compared to the 25.9 per cent in the prior year period,” Andrew Page, executive vice president and chief financial officer at Foot Locker said.

“We exited the quarter with positive momentum and are cautiously optimistic about the outlook for the back-half of 2021. Recognising we are still operating in an uncertain environment due to Covid-19, we continue to keep a close eye on the business, including temporary store closures and supply chain challenges, and we remain disciplined with expense management,” Page concluded.

During Q2 FY21, Foot Locker opened 16 new stores, remodelled or relocated 23 stores, and closed 57 stores.

Fibre2Fashion News Desk (JL)

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