“The Lace Up Plan is working, as evidenced by our return to positive total and comparable sales growth as well as gross margin expansion in the second quarter.  Our top-line trends strengthened as we moved through the quarter, including a solid start to Back-to-School.  We were also particularly pleased to deliver stabilization in our Champs Sports banner.  As planned, we relaunched our enhanced FLX Rewards Program in the United States during the quarter and have been encouraged by initial results”, commented Mary Dillon, President and Chief Executive Officer.

Second Quarter Results

In the second quarter of the year, the company’s total sales reached 1.90 billion US dollars, reflecting an increase of 1.9% as compared to the same period of last fiscal year; excluding the effect of foreign exchange rate fluctuations, total sales increased by 2.5%. In addition, comparable sales grew by 2.6% year-over-year, led by the performance of the global Foot Locker and Kids Foot Locker banners.

Foot Locker’s gross margin expanded 50 basis points in the second quarter, on a comparable basis to the same period of fiscal 2023, including a 40-basis point impact from the non-recurring FLX Rewards Program charge. Excluding this impact, gross margin improved by 90 basis points over the same period of last year, driven by lower markdowns in addition to occupancy leverage.

In the three months to the 3^rd of August, the US-based company recorded a net loss of 12 million US dollars, as compared to a net loss of 5 million US dollars in the corresponding period a year ago. On a non-GAAP basis, the net loss was 4 million US dollars, as compared to a net income of 4 million US dollars in the second quarter of last year.  

Accordingly, Foot Locker reported a loss per share of 0.13 US dollars in the second quarter, as compared to a loss per share of 0.05 US dollars in the prior year period. Non-GAAP earnings decreased to a loss of 0.05 US dollars per share in the second quarter, as compared to non-GAAP earnings of 0.04 US dollars per share in the same period of last year. Both measures include a negative impact of 0.09 US dollars per share from the one-time FLX charge in the quarter.

Store Base Update

During the second quarter, the company opened 5 new stores, closed 31 stores, remodeled or relocated 14 stores and redesigned 67 stores. As of the 3rd of August, Foot Locker operated a total of 2,464 stores in 26 countries across North America, Europe, Asia, Australia, and New Zealand. There were also 213 licensed stores in the Middle East and Asia.

In addition, as part of its Lace Up plan and ongoing efforts to simplify its business model and focus on core banners and geographies, the company expects to close or transfer the operations of approximately 30 of its 140 stores in Asia Pacific and 629 stores in Europe by mid-2025.  

New Headquarters

The US-based company will move its global headquarters to St. Petersburg, Florida by the end of 2025. Separately. Foot Locker will also open its Global Technology Services (GTS) Hub in Dallas, Texas in September, which is designed to accelerate technology delivery and cross-functional collaboration with access to a world-class technology talent pool.

Full Year Outlook

“Our strategies are building momentum as we look to the remainder of the year, and we are reaffirming our full-year Non-GAAP EPS outlook”, concluded Dillon. Therefore, for fiscal 2024, the company continues to expect non-GAAP earnings per share in the range of 1.50 to 1.70 US dollars.