Foot Locker, Inc. has reported its financial results for the second quarter of 2024, showing several positive changes since the same period last year. The company's total sales increased by 1.9% to $1,896 million, with a 2.6% growth in comparable sales. Gross margin also expanded by 50 basis points year-over-year, despite a non-recurring charge associated with the rollout of the company’s enhanced FLX rewards program in the United States.
However, the company reported a net loss of $12 million for the quarter, compared to a net loss of $5 million in the same period last year. On a non-GAAP basis, the net loss was $4 million, as compared with net income of $4 million in the corresponding prior-year period. The loss per share was $0.13, compared to a loss of $0.05 per share in the second quarter of 2023. On a non-GAAP basis, the loss per share was $0.05, compared to non-GAAP earnings per share of $0.04 in the corresponding prior-year period.
Foot Locker, Inc. also saw a significant decrease in inventory, which was 10.0% lower than at the end of the second quarter last year. The company's cash and cash equivalents totaled $291 million, while total debt was $445 million.
During the second quarter, the company opened five new stores, closed 31 stores, and remodeled or relocated 14 stores, demonstrating ongoing efforts to optimize its store base. The company operated 2,464 stores in 26 countries in North America, Europe, Asia, Australia, and New Zealand, as well as 213 licensed stores in the Middle East and Asia.
In a bid to support its strategic progress, Foot Locker, Inc. announced plans to relocate its global headquarters to St. Petersburg, Florida in late 2025, with the intention to maintain only a limited presence in New York City going forward. The company also revealed the upcoming opening of its global technology services (GTS) hub in Dallas, Texas, aimed at accelerating technology delivery and cross-functional collaboration.
In line with its "Lace Up" plan, the company is taking actions in Asia Pacific and Europe, including closing stores and ecommerce operations in South Korea, Denmark, Norway, and Sweden, as well as transferring store and ecommerce operations in Greece and store operations in Romania to Fourlis Holdings Société Anonyme. These changes are expected to be completed by mid-2025.
Despite the challenges, Foot Locker, Inc. remains confident in its strategic direction and has reaffirmed its full-year 2024 outlook, including a non-GAAP EPS of $1.50 to $1.70, which includes a $0.09 drag from a non-recurring FLX charge. The company's full-year outlook also reflects ongoing investments and promotional pressure in international markets and WSS, resulting in adjustments to gross margin and SG&A rate.
The company provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the company’s forward-looking EBIT, non-GAAP tax rate, and diluted earnings per share guidance to the most directly comparable GAAP financial measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. The market has reacted to these announcements by moving the company's shares 0.1% to a price of $32.81. Check out the company's full 8-K submission here.
