Not content to rest on its laurels after a strong finish to FY18, Foot Locker is moving forward with plans to reshape its business. Those efforts include investing $124 million in a number of small companies, closing its small SIX:02 women’s-only banner; adding a dozen more “Power” stores across the globe; and resizing its brick-and-mortar portfolio. The retailer intends to close 165 locations in 2019, most of them Foot Locker and Lady Foot Locker doors in the U.S., remodel or relocate 190 existing stores and open 80, including the aforementioned “Power” store plans. Foot Locker has scheduled a March 28 investor meeting in New York to outline its strategic priorities, growth initiatives and long-term financial objectives.
In Q4, FL generated a 9.7-percent comparable store sales gain, fueled by a double-digit increase in December. January sales increased high-single digits and average selling prices were up double digits despite a low-single digit traffic decline worldwide. (Traffic was better in North America.) Comps rose 5.7 percent banner-wide, with digital comps gaining nearly 30 percent. Direct-to-Consumer sales were 19.1 percent of Q4 revenues. FY18 total sales rose 3.3 percent to $7.9 billion.
All North American divisions reported positive sales gains, including double-digit improvement at Eastbay, Foot Locker U.S. and Foot Locker Canada. Champs Sports was up high-single digits. By category, men’s running and Classics increased “strong double digits” and men’s basketball was off mid-single digits. Apparel sales rose at a mid-single digit rate on strong sales of branded tees, NBA apparel and fleece from Champion and Nike. Merchandise margins gained 80 basis points on lower markdowns among footwear, apparel and accessories.