On May 23, sportswear retailer Foot Locker
- While international profits were in line with management's expectations, additional markdowns in U.S. stores caused a 3.6% drop in sales.
- Because the company missed the sales target, inventory increased 6.2%.
- Additional markdowns needed to move older goods out of stores hurt margins across the board.
- To create a new brand for those who love basketball, Nike
(NYSE:NKE) and Foot Locker are teaming up to open up 50 "House of Hoops by Foot Locker" retail stores in the United States over the next three years.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$1,316 |
$1,365 |
(3.6%) |
|
*Net Profit |
$17 |
$58 |
(70.7%) |
|
EPS |
$0.11 |
$0.37 |
(70.3%) |
|
Diluted Shares |
156.5 |
156.7 |
(0.1%) |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
27.4% |
30.7% |
(3.3) |
|
Operating Margin |
2.1% |
6.8% |
(4.8) |
|
Net Margin |
1.3% |
4.3% |
(3.0) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$418 |
$370 |
13.0% |
|
Inventory |
$1,490 |
$1,403 |
6.2% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$403 |
$380 |
6.1% |
|
Long-Term Debt |
$221 |
$272 |
(18.8%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
Management went out for a run and forgot to include the cash flow statement.
Related Foolishness:
- The Hunted Becomes the Hunter
- Foot Locker Adds Time
- The Ultimate Rule Maker: Nike
- Shoe Carnival Hitting Its Stride?
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