Foot Locker Inc updated its financial forecast for its second quarter 2007 primarily to reflect the impact of the merchandise inventory clearance activity. As a result of that and other actions, the Company currently expects to report a loss in a range of $0.17-to-$0.20 per share.
This range reflects increased markdowns in the Company's U.S. stores of approximately $55 million at cost, or approximately $0.22 per share, versus the same period last year to liquidate slow-selling merchandise.
The Company's estimate for the second quarter that was provided at the beginning of the period was net income of $0.15-to-$0.20 per share. The Company also updated its financial forecast for the second quarter to reflect that its comparable-store sales are expected to decrease 7-to-8 percent.
“During the second quarter, we made the strategic decision to liquidate slower-selling merchandise in our U.S. stores more aggressively than we had planned at the beginning of the quarter, with an objective of improving our inventory position before the start of the fall season,” stated Matthew D. Serra, Foot Locker Inc's Chairman and Chief Executive Officer.
“The financial impact of implementing this important strategy was the primary reason for the projected net loss for the second quarter of 2007. We expect our international units will produce a double-digit division profit increase versus last year's comparable period.”
The Company's financial positioncontinued to strengthen during the second quarter, as its cash position, net of debt, is expected to increase by approximately $50 million from the same time last year.
marketing@alchempro.com
