Foot Locker, Inc. has recently released its 10-Q report, providing a comprehensive look at its financial performance. The company operates as a footwear and apparel retailer in various regions. Its brand portfolio includes Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos, with a strong focus on omni-channel capabilities to bridge the digital and physical retail worlds.
In the first quarter of 2024, Foot Locker reported total sales of $1,874 million, a decrease of 2.8% compared to the same period in 2023. The company operated 2,490 stores as of May 4, 2024, compared to 2,523 and 2,692 stores in the preceding quarters. The company also had a total of 206 licensed stores operating in the Middle East and Asia as of May 4, 2024.
The company evaluates performance based on division profit, which reflects income before income taxes, impairment and other charges, corporate expenses, non-operating income, and net interest expense. In the first quarter of 2024, Foot Locker reported a division profit of $43 million, a significant decrease from $104 million in the same period in 2023.
Foot Locker also provided a reconciliation of non-GAAP measures, presenting certain financial results that differ from what is reported under GAAP. The company believes these non-GAAP measures assist investors in allowing a more direct comparison of its performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business or affect comparability.
The company operates in three operating segments: North America, EMEA, and Asia Pacific. Comparable sales for the thirteen weeks ended May 4, 2024, decreased by 1.8% compared to the corresponding prior-year period. The gross margin rate decreased to 28.8% for the same period, reflecting a 140-basis point decrease in the merchandise margin rate and a 20-basis point leverage in the occupancy and buyers' compensation rate.
Selling, General and Administrative Expenses (SG&A) for the first quarter of 2024 increased by $30 million compared to the same period in 2023. As a percentage of sales, SG&A increased by 220 basis points for the same period, primarily due to investments in technology and brand-building, higher inflation, and ongoing expense discipline.
Depreciation and amortization expense remained flat for the first quarter of 2024. The company's financial performance in the first quarter of 2024 reflects a challenging retail environment, with efforts to address macroeconomic headwinds and reposition certain banners to better serve customers. As a result of these announcements, the company's shares have moved 1.3% on the market, and are now trading at a price of $25.51. For more information, read the company's full 10-Q submission here.
