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Did Foot Locker’s Top and Bottom Lines Increase in 4Q15?

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Price movement of Foot Locker

Foot Locker (FL) has a market cap of $8.8 billion. FL fell by 4.3% to close at $64.14 per share on February 26. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is -5.0%, -2.4%, and -1.1%, respectively.

Technically, the stock has broken the support and is trading below all moving day averages. Currently, FL is trading 3.9% below its 20-day moving average, 1.7% below its 50-day moving average, and 4.1% below its 200-day moving average.

The SPDR S&P Retail ETF (XRT) invests 1.1% of its holdings in Foot Locker. The ETF tracks a broad-based, equal-weighted index of stocks in the US retail industry. The YTD price movement of XRT was -1.3% as of February 25, 2016.

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 1.1% of its holdings in Foot Locker. The ETF tracks a market-cap-weighted index of growth companies from the S&P 400.

The market caps of Foot Locker’s competitors are as follows:

  • Walmart (WMT): $213.0 billion
  • DSW (DSW): $2.3 billion
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Performance of Foot Locker in fiscal 4Q15 and fiscal 2015

Foot Locker reported fiscal 4Q15 sales of $2,007.0 million, a rise of 5.0% compared to sales of $1,911.0 million in fiscal 4Q14. It reported litigation and impairment charges of $5 million in fiscal 4Q15 compared to $1 million in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $158.0 million and $1.14, respectively, in fiscal 4Q15 compared to $146.0 million and $1.01, respectively, in fiscal 4Q14. It reported non-GAAP EPS of $1.16 in fiscal 4Q15, a rise of 16% compared to fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, FL reported sales of $7,412.0 million, a rise of 3.6% YoY (year-over-year). It reported litigation and impairment charges of $105.0 million in fiscal 2015 compared to $4 million in fiscal 2014.

The company’s net income and EPS rose to $541.0 million and $3.84, respectively, in fiscal 2015 compared to $520.0 million and $3.56, respectively, in fiscal 2014. It reported non-GAAP EPS of $4.29 in fiscal 2015, a rise of 19.8% YoY.

Meanwhile, its cash and cash equivalents and merchandise inventories rose by 5.6% and 2.8%, respectively, in fiscal 2015. Its current ratio and debt-to-equity ratio rose to 3.7x and 0.48x, respectively, in fiscal 2015 compared to 3.5x and 0.43x, respectively, in fiscal 2014.

The company opened 111 new stores, remodeled or relocated 209 stores, and closed 151 stores during fiscal 2015. As of January 30, 2016, it operated 3,383 stores in 23 countries in North America, Europe, Australia, and New Zealand.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of Foot Locker are 17.2x and 3.5x, respectively, as of February 26, 2016.

In the next part of the series, we’ll look at Clorox.

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