The company made $0.42 in earnings per share, which is unchanged from the year-ago quarter, and same-store sales fell 0.3%. Management also raised its earnings guidance for the year to $1.58-$1.65 per share.
Although sales and earnings are essentially flat over the last couple years, Foot Locker's cash flow remains strong, and the company is rewarding shareholders with a 39% dividend increase. The new annualized rate of $0.50 provides a nice 2.1% yield at yesterday's closing price.
However, the company appears willing to continue experimenting. In the spring, it will open 30 "Footquarters" stores that will sell valued-priced family footwear. Plus, this month, the first "Champs Sports Just Hats" store will open in Miami. While these new retail concepts may fill some niches Foot Locker is currently missing, is another chain of stores what the company needs right now?
After all, opening new stores is not cheap, and neither is the rent in high-traffic shopping malls. When I notice a Foot Locker, Lady Foot Locker, Kids Foot Locker, and perhaps a Champs or FootAction all in the same mall, I'm curious if all that retail space couldn't be more productive if it were consolidated into just one or two larger stores.
Meanwhile, if Foot Locker's results were unimpressive, Finish Line's
Foot Locker maintains a high-quality brand and seems somewhat resistant to Wal-Mart's
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