Foot Locker consolidates resurgence in Q2
In the midst of a flurry of acquisitions, Foot Locker has published encouraging Q2 results. In the second quarter ended July 31, 2021, the American sneaker and sportswear retailer's sales saw a rise of 9.5%, or 7.3% in constant currencies, reaching $2.275 billion. Comparable store sales experienced recovery, increasing 6.9%.
The New York-based company's net income totaled $430 million, a considerable jump from the $45 million achieved by the retailer in the prior-year period. Gross margin rose to 35.1%, compared to 25.9% in the second quarter of 2020.
"This quarter reflects strong results in our women's and kids' footwear business along with broad demand for our apparel and accessories offerings, which combined with more limited promotional activity, led to the outstanding top and bottom line results," explained Richard Johnson, CEO of the company, which owns the Foot Locker, Sidestep, Footaction and Champs Sports brands, in a release.
In the first six months of the fiscal year, Foot Locker's revenues rose 36.1% compared to the same period in 2020, totaling $4.428 billion. EVP and chief financial officer Andrew Page said that he was "cautiously optimistic" for the second half of the year. "Recognizing we are still operating in an uncertain environment due to Covid-19, we continue to keep a close eye on the business, including temporary store closures and supply chain challenges, and we remain disciplined with expense management," he added.
The group is nonetheless planning to take out its checkbook, in line with its announcement this summer that it will be acquiring two footwear retail chains. WSS, which boasts some 100 points of sale in the U.S., is set to be purchased by the group for $750 million, while Atmos, which has around 40 addresses to its name in Japan, will be snapped up for $360 million.
Operating 2,911 stores in 27 countries, Foot Locker closed 57 locations in the second quarter, relocated 23 and opened 16. Due to the pandemic, the group's annual sales fell 5.7% in fiscal 2020, while its net earnings plummeted 34%.
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