Foot Locker announced its third-quarter (Q3) results for the period ending October 30 with a boost in total sales of 3.9 percent and net profits of $158 million compared to the previous year’s $265 million. However, despite the loss in earnings for the quarter, executives consider the results as solid. Even though Q3 profit margins compared to the record year of 2020 were lower, the Company’s profit had an increase of 26.4 percent compared to Q3 of the year. Richard Johnson, Chairman, and CEO commented, “These impressive top and bottom-line results came against a hectic back-to-school season that we had last year and despite constant supply chain issues.”
Profits for the year soar to 295 percent.
The whole margin for the third quarter was 34.7 percent in contrast to 30.9 percent in the same quarter the last year. “The combination of a strong demand and fresh inventory together with a higher percentage of selling at full price which resulted in a gross margin increase of 380 basis point,” said Andrew Page. He is CFO and executive vice president. The gross margin for the year to date is 34.9 percent, up from 27.2 percent last year, which is a contributing factor to the substantial increase in profit during this first quarter.
Despite the decrease in Q3 profits, the nine-month gains were solid, reaching $790 million. They have almost tripled when compared to the same time in the year prior. Earnings for the year to date are higher by 121% when compared to the year prior. “The 3rd quarter of 2019 was a period of high-performing growth for the Company that is a reflection of the powerful connections we’ve made between our partners,” said Johnson.
Strong consumer trends bode well for Foot Locker.
Johnson talked about three crucial consumer behavior, and megatrends driving demand and are in line with the offerings of Foot Locker, including the democratization of the sneaker culture, increasing emphasis of consumers on health and wellness, and the continuing of casualization and athleisure trends. Johnson said in the conference call that “We have the most talented team, the most reliable partners, and loyal customers who remain loyal to Foot Locker’s brand.”
Foot Locker sells a deep selection of merchandise across various pricing levels that appeal to a wide range of customers. The Company continues to look for innovative and thrilling collaborations. Acquisitions that will expand its range of products, including recently acquired the WSS brand, a U.S.-based athletic clothing and footwear retailer primarily based in the West Coast, and atmos, a global streetwear and sneaker store that a Japanese entrepreneur established in Harajuku, Tokyo.
At the end of October 2021, the Company’s merchandise inventory, including an increase in WSS and WSS, was 9.1 percent more than at the close in the 3rd quarter of last year. The Company is well-positioned to accommodate the anticipated holiday demand. Page said, “We expect global supply chain challenges to continue throughout the fourth quarter. but we think that we are well-positioned for the holiday season with an upbeat outlook and inventory levels that are ready to meet the demands of customers.”
Foot Locker operates 2,956 stores across 27 countries, including North America, Europe, Asia, Australia, and New Zealand.