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Foot Locker Stumbles in Europe

The company sees a profit shortfall for the second quarter as a result.
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Foot Locker

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said its profit for the just-ended quarter will miss analysts' estimates after its business in Europe performed worse than the company had anticipated.

"While our European business remains productive, generating a double-digit profit margin, our recent financial results in this region were below our expectations and very disappointing," Matthew D. Serra, Foot Locker's chairman and CEO, said in a press release.

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As a result, the New York-based seller of athletic shoes and other goods expects earnings for the second quarter of 27 cents to 29 cents a share, falling short of Wall Street's consensus profit estimate of 35 cents.

Sales for the 13 weeks ended July 30 rose 3% to $1.31 billion from $1.27 billion a year ago. Overall same-store sales increased 1.3%. Excluding the effect of foreign currency moves, total sales for the quarter were up 2.2%.

Analysts surveyed by Thomson First Call were looking for sales of $1.37 billion for the quarter.

Second-quarter same-store sales reflected a mid-single-digit increase at the company's combined U.S. businesses, led by a double-digit increase at Champs Sports.

Comp sales at the international Foot Locker operations were mixed, with the Canadian and Asia-Pacific stores posting mid-single-digit increases, but that was more than offset by a high-single-digit decline at European stores.