Foot Locker posts 5.7% decline in revenue in 2020
Foot Locker was able to exercise a certain amount of damage control during a year strongly affected by the Covid-19 pandemic, but posted a fourth quarter that disappointed Wall Street analysts, leaving the path forward in 2021 uncertain. In the fiscal year ended January 31, 2021, the American group saw its sales drop 5.7% year over year, or 5.9% on a comparable basis, from $8.01 billion to $7.55 billion. In constant currencies, the decline was 6.3%.
Owner of the Foot Locker, Runners Point and Champs Sport chains, the company also saw its earnings decrease in comparison to 2019: annual net income totaled $323 million in 2020, down 34% year over year.
In the fourth quarter, the group's revenue slipped 1.4% year over year, from $2.22 billion to $2.19 billion, representing a 2.7% decline in comparable sales and coming in just below analysts' expectations of $2.9 billion. The company's net earnings for the quarter totaled $123 million, falling 7.9% compared to the prior-year period.
"Our teams continued to execute nimbly in the fourth quarter to manage against the headwinds to our top line. As a result, we delivered gross margin expansion and improved inventory turns, while maintaining our discipline with expense management," commented Foot Locker CFO Lauren Peters in a release.
The group, which operates some 3,000 points of sale in 28 countries, continued to reshape its store network last year, closing 200 locations, remodeling 82 and opening 69. Currently, around 10% of the retailer's stores are temporarily closed due to restrictions related to the coronavirus health crisis.
The group said that it was unable to provide financial guidance for 2021, citing "ongoing uncertainty created by Covid-19." Nonetheless, the company recently announced its intention to invest $275 million this year, up from $155 million in 2019, with a notable focus on updating its digital infrastructure and improving the online customer experience.
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