Hot Stock to Track – Foot Locker, Inc. (NYSE:FL)

Foot Locker, Inc. (NYSE:FL) recently traded with change of -14.82% to $39.08 with the total traded volume of 9933370 shares versus to an average volume of 3.58M. The stock was down in the 5 days activity -4.93%. The one month performance of stock was low -8.06%. FL [NYSE] shares are above 13.42% for the quarter and driving a -39.62% rally over the course of the past year and is now down -2.13% since this point in 2018.  Right now FL beta is 0.77. The average volatility for the week and month was at 4.36%, 4.39% respectively.

Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its fourth quarter and full year.  The Company’s fiscal 2017 ended on February 3, 2018, reflecting a 14-week fourth quarter and 53-week year, compared to the 13-week and 52-week periods in fiscal 2016.  The additional week is not included in comparable-store sales results for the quarter or the year.

Fourth Quarter Results

The Company reported a net loss of $49 million, or $0.40 per share, for the 14 weeks ended February 3, 2018, compared to net income of $189 million, or $1.42 per share in the same period of fiscal 2016.  With the benefit of the extra week, total fourth quarter sales increased 4.6 percent, to $2,210 million this year, compared to sales of $2,113 million in the prior-year fourth quarter.  Excluding the effect of foreign exchange rate fluctuations, total sales for the quarter increased 2.0 percent.  Fourth quarter comparable-store sales decreased 3.7 percent.

On a 14-week basis, the Company’s gross margin rate decreased to 31.4 percent from 33.7 percent a year ago, reflecting the continuation of a highly promotional marketplace environment, and its SG&A expense rate increased to 19.1 percent from 18.7 percent in the fourth quarter of 2016.

Non-GAAP Adjustments

The quarterly results this year included several one-time charges, all of which are detailed below in the accompanying reconciliation of GAAP to non-GAAP results.  The two most significant adjustments were (1) $99 million of incremental tax expense, or $0.81 per share, due to the recently-enacted reform of the U.S. tax code, virtually all of which related to the levy for the deemed repatriation of offshore earnings and (2) a $128 million charge, pre-tax, or $0.66 per share after tax, related to the Company’s ongoing pension litigation.  This incremental litigation charge brings the total liability recorded for this matter to $278 million.  In the prior year period, the Company’s tax expense was affected by two non-recurring items, which together increased reported earnings by five cents per share.  These prior year items are also noted in the GAAP to non-GAAP reconciliation below.

Excluding the charges and adjustments in both years, fourth quarter non-GAAP net income was $155 million, or $1.26 per share, versus $1.37 in 2016.  The extra week in this year’s fourth quarter results contributed $16 million to net income, or $0.12 per share.  Excluding this benefit as well, non-GAAP net income was $1.14 per share.

Fiscal Year Results

Sales for 2017 were $7,782 million, an increase of 0.2 percent compared to sales of $7,766 million in fiscal 2016 and the most in the Company’s history as an athletic business.  Full-year comparable-store sales decreased 3.1 percent.  Excluding the effect of foreign currency fluctuations, total sales decreased 0.5 percent.

The Company’s net income decreased to $284 million in 2017, or $2.22 per share, compared to net income of $664 million, or $4.91 per share in 2016.  On a non-GAAP, 52-week basis, earnings per share totaled $3.99 in 2017, a 17 percent decrease over last year’s non-GAAP earnings of $4.82.

2018 Outlook

The Company currently expects a flat to up low single-digit comparable-store sales performance for fiscal 2018 and gross margins to begin recovering from 2017’s 31.6 percent rate, which fell 2.3 percent from the gross margin rate in fiscal 2016.  Including the effect of elevated and accelerated digital investments, the Company’s SG&A rate is expected to be approximately 100 basis points higher in 2018.

Financial Position

At February 3, 2018, the Company’s merchandise inventories were $1,278 million, 2.2 percent lower than at the end of the fourth quarter last year.  Using constant currencies, inventory decreased 5.2 percent.

The Company spent $105 million to repurchase 2.8 million shares during the quarter and paid a quarterly dividend of $0.31 per share.  For the full year, the Company returned $624 million to shareholders through its share repurchase program and dividends, spending $467 million to repurchase 12.4 million shares, and paying $157 million in dividends.  In addition, the Company invested approximately $270 million in its store fleet, its digital platform, logistics capabilities, and infrastructure.

The Company’s cash totaled $849 million, while the debt on its balance sheet was $125 million.  The Company’s total cash position, net of debt, was $195 million lower than at the same time last year.  The reduction in cash was largely due to the pre-funding of $150 million of the pension litigation liability just before the end of the year.  This restricted cash is now reflected in Other Assets on the balance sheet.

Shares of Foot Locker, Inc. have been recently spotted trading -49.81% off of the 52-week high price. On the other end, company shares have been noted 37.51% away from the low price over the last 52-weeks. 52 week range of the stock remained $ 28.42 – 77.86. Switching over to some distances from popular moving averages, we see that the stock has been recorded -18.64% away from the 50 day moving average and -11.39% away from the 200 day moving average. Moving closer, we can see that shares have been trading -17.96% off of the 20-day moving average.

Warren Becky

Warren Becky

Warren Becky joined us, after more than 10 years of experience in writing financial and business news, most recently as Investment Editor and writer. He also has a vast knowledge of stock trading. He earned bachelor degree from Union College with a focus in Business Administration. Warren is the Senior Editor and market movers section. He also holds an MBA from Penn State University. He has two daughter and two children. Address: 2129 Maud Street, ESKO, Minnesota Email: Warrenbecky@stocksgeeks.com Zip Code: 55733 Contact number: 302-722-7537

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