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TheStreet Open House

Foot Locker Management Discusses Q2 2013 Results - Earnings Call Transcript

Stocks in this article: FL

Our domestic stores comped up in the low-teens in the second quarter, with gains in every division except for Lady Foot Locker, which was essentially flat. Foot Locker Europe's comparable store sales were also essentially flat, down less than 0.5%. But total sales in Europe were actually up mid-single-digits, as we operated more than 30 additional stores in the second quarter of 2012 compared to a year ago. Our other international divisions posted mid-single-digit comp gains and our Direct-to-Customer segment posted an 18.1% gain, including a gain of almost 50% in our store banner Dot-Com sales. Coming on top of last year's Q2 comp gain of 11.8%, this year's overall comp gain marks the second consecutive quarter in which we have posted a 2-year stacked comp gain in excess of 20%. In fact, our 2-year stacked comp gain for the first half of 2012 is a strong 22.1%.

By month, we posted high single-digit comp gains in May and June, while July was up double-digits. The strongest division in the second quarter was Kids Foot Locker, which posted a comp gain in excess of 20%. Champs Sports continued its very strong performance with a comp gain in the teens, on top of last year's similar results for a 2-year stacked result of more than 30%. Foot Locker in the U.S. and Footaction also posted double-digit gains this quarter, on top of similar results a year ago.

CCS.com sales fell below last year by a low single-digit percentage, as it ran far fewer promotions this year compared to last, resulting in improved profit margins. Excluding CCS, the other parts of our Direct-to-Customer segment posted a gain in excess of 20% for a 2-year stacked gain of well over 40% for the second quarter in a row. Footwear and accessories both had high single-digit comp gains, while apparel lead the way with a low double-digit increase.

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