Foot Locker (FL) Warns for Q1

Foot Locker, Inc. (NYSE: FL) updated its first quarter and full year 2017 outlook in light of the previously noted slow start to the fiscal year in February. The Company currently expects earnings in the first quarter ending April 29 to be equal to or slightly below last year's record earnings, or $1.36 to $1.39 per share (*** consensus is $1.47). Comparable store sales in the first quarter are expected to increase at a low-single digit percentage rate. For the remaining three quarters of the year, the Company continues to believe it will achieve a double-digit earnings per share percentage increase and a mid-single digit comparable store sales percentage increase; however, the sluggish first quarter is expected to result in a revised full-year earnings per share percentage increase in the mid-single digits, excluding the 53rd week.

"We mentioned on our 2016 earnings conference call on February 24th that the first quarter of 2017 would be challenging, based on the slower than usual start in the United States," said Richard Johnson, Chairman and Chief Executive Officer. "We believe the delay in the issuance of the vast majority of income tax refund checks until after the NBA All-Star Game signifcantly affected our February comparable store sales, which were down low-double digits. March sales rebounded well, up high-single digits; however, the strength we experienced once income tax refund checks started flowing into our customers' hands did not fully offset the slow start to the quarter. Encouragingly, we are now having a strong Easter selling period, with April comparable sales likely up low double digits, which we see as confirmation that the customer's appetite for our exciting product assortments has not changed."

"Our full-year guidance called for a mid single digit percentage comparable store sales increase and a double- digit percentage earnings per share increase," added Lauren Peters, Executive Vice President and Chief Financial Officer. "That guidance included little operating leverage this year for several reasons outlined during our earnings call. With comparable sales that fall short of a mid-single digit percentage increase, we currently expect some operating deleverage in the first quarter."

"Despite our disappointment in the overall sales performance in the first quarter, we are confident our banners remain at the center of sneaker culture and we believe in our ability to produce the strong performance over the remainder of 2017 that we previously outlined," added Mr. Johnson.

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