Same-store sales rose 7% in the second quarter, compared with the same quarter last year. Gross margin improved year-over-year from 31.2% to 32.0%. Sequentially, however, gross margin fell from 34.6%. SG&A fell year-over-year from 21.6% of sales to 20.9%, but again sequentially the costs rose from 19.0% of sales. Total second-quarter sales rose 12.9% year-over-year, including a positive effect from foreign currency changes.
Adjusted earnings exclude $2 million for an impairment charge taken for a trade name change.
The company did not provide any guidance, but the consensus third-quarter estimates call for EPS of $0.78 on revenues of $1.7 billion. For the full fiscal year, Foot Locker is expected to post EPS of $3.30 on revenues of $7.03 billion.
Ken Hicks, the company’s CEO, said:
The team at Foot Locker once again achieved record levels of sales and profits in the second quarter. … 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.
Hicks is allowed to crow a little. Foot Locker’s stock is on track to post another all-time high, just like it did when the company reported first-quarter results back in May. Shares have also closed at a new all-time high on each of the past three days. Shares are up 55% in the past 12 months and more than 370% over the past five years.
Foot Locker opened 14 new stores during the second quarter, while remodeling or relocating 112 and closing 18. Foot Locker operates or franchises 3,460 stores worldwide.
Shares were up about 5% in premarket trading to $55.00, which would be a new 52-week high if it holds. The current 52-week range is $31.91 to $52.95. Thomson Reuters had a consensus analyst price target of around $54.50 before the results were announced.
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