Foot Locker, Inc. (NYSE:FL) Q3 2017 Earnings Conference Call Transcript
Nov 17, 2017 • 09:00 am ET
Good morning, ladies and gentlemen, and welcome to Foot Locker's Third Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session.
(Forward-Looking Cautionary Statements)
If you have not received today's release, it is available on the Internet at www.prnewswire.com or www.footlocker-inc.com. Please note that this conference is being recorded.
I will now turn the call over to John Maurer, VP, Treasury and IR. Mr. Maurer, you may now begin.
Thank you, Tommy. Hello, everyone. We're pleased to have you join us this morning to discuss Foot Locker, Inc.'s results for the third quarter of 2017. Joining us on today's call are Lauren Peters, Foot Locker's EVP and CFO, who will start our prepared remarks with a detailed review of our financial results and an update of our outlook for the rest of fiscal 2017; and Dick Johnson, Chairman and CEO, who will discuss how we are positioning the company for success in the midst of the changes we see with our customer and within the broader athletic industry.
First, though, I'll provide you with a brief summary of the company's results, which were broadly in line with our expectations going into the quarter. We reported a comparable sales decline of 3.7% and net income of $156 million, which equated to earnings of $0.81 per share. These results included a $13 million pretax charge related to reducing and reorganizing our divisional and corporate staff, which both Lauren and Dick will touch upon further. This charge equaled $0.06 per share. Thus, on a non-GAAP basis, our adjusted EPS in the quarter was $0.87.
A reconciliation of our GAAP to non-GAAP results is provided in the press release issued earlier this morning. I'll now turn the call over to Lauren.
Thank you, John. Good morning to all of you, and thank you for your interest in Foot Locker. As John mentioned, third quarter comparable sales declined 3.7%, within the down 3% to 4% guidance we provided on our prior call and as expected, an improvement over the decline we experienced in the second quarter.
Our comp was negatively affected by Hurricanes Harvey, Irma and Maria. Overall, we had almost 450 stores closed at some point during the third quarter as a result of these storms, although, for the most part, sales recovered in Texas and Florida within the quarter. The primary impact on us was actually from Hurricane Maria, which shut down all 56 of our stores in Puerto Rico and the Virgin Islands. And most of these stores remained closed for a month or more after that devastating storm hit in mid-September. Our thoughts are with the people in the Caribbean and elsewhere, including hundreds of our own associates who are continuing to cope bravely with the devastation left behind by this season's hurricanes. We estimate that the net sales loss primarily due to Maria lowered our overall comp by 20 to 40 basis points. The hurricanes also led to significant