Foot Locker sees sales fall and earnings plummet
Specialty athletic retailer Foot Locker has
For the full year, the company reported net income of $53 million compared with net income of $251 million last year. Income from continuing operations was $51 million versus $247 million in 2006.
Foot Locker reported that sales had decreased 5.4%, to $5.4 billion, compared to $5.75 billion in the 2006 fiscal year, which, owing to a change in reporting, had one extra trading week.
The company's chairman and chief executive, Matthew Serra, commented: “Despite our outlook for substantial earnings improvement in 2008 versus 2007, we still regard the economic climate for footwear retailers in the United States to be challenging. As a result, we have planned our business conservatively for 2008, although we do expect to benefit from a meaningful improvement in our gross margin rate primarily reflecting lower markdowns.
"Given our solid financial position at the end of 2007 and confidence in the ability of our businesses to sustain positive cash flow generation, as we have previously announced, our board of directors voted last month to increase our common stock dividend for 2008 by 20%. We will continue to evaluate all opportunities to enhance shareholder value, balanced prudently against maintaining a strong financial structure.”
In the course of 2007 Foot Locker closed a number of stores that it deemed to be “not performing”.
