Foot Locker, Inc. (NYSE:FL) Q2 2019 Earnings Conference Call Transcript

Aug 23, 2019 • 09:00 am ET

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Foot Locker, Inc. (NYSE:FL) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to Foot Locker's Second Quarter 2019 Financial Results Conference Call. [Operator Instructions] Later we will conduct a question-and-answer session.

This conference call may contain forward-looking statements that reflect management's current views of future events and financial performance. Management undertakes no obligation to update these forward-looking statements which are based on many assumptions and factors, including the effects of currency fluctuations, customer preferences, economic and market conditions worldwide, and other risks and uncertainties described more fully in the Company's press releases and in reports filed with the SEC, including the most recently filed Form 10-K or Form 10-Q. Any changes in such assumptions or factors could produce significantly different results and actual results may differ materially from those contained in the forward-looking statements. [Operator Instructions]

And at this time, I'd like to turn the conference call over to Jim Lance, Vice President, Corporate Finance and Investor Relations. Mr. Lance, you may begin.

Executive
James R. Lance

Thank you. Welcome everyone to Foot Locker, Inc.'s Second Quarter Earnings Conference Call. As announced in this morning's press release, the Company reported net income of $60 million in the second quarter, compared to net income of $88 million in the second quarter of last year. Earnings per share were $0.55 compared to $0.75 per share in the second quarter of 2018. Excluding particular items on a non-GAAP basis, second quarter earnings were $0.66 per share compared to $0.75 per share last year. The particular items included in this year's results are a $13 million charge related to the closure of 23 SIX:02 locations, an incremental $1 million charge related to the pension matter that we have spoken about in the past, and a $2 million tax charge related to US tax reform. Last year, the results included a $3 million charge related to the same pension matter, offset by $2 million of tax benefits. Unless otherwise noted, the figures and rates mentioned during our call today will be based on non-GAAP results. A reconciliation of GAAP to non-GAAP results is included in this morning's press release.

We'll begin our prepared remarks with Lauren Peters, Foot Locker's Executive Vice President and Chief Financial Officer, who will provide details on our second quarter financial performance, along with our financial outlook for the balance of the year. Dick Johnson, Chairman and Chief Executive Officer will then provide an update on our second quarter results, along with an update on a number of ongoing customer connected initiatives and our product pipeline.

Lauren?

Executive
Lauren B. Peters

Thank you, Jim. Good morning to all of you and thank you for joining us today. Overall I would describe our results for the quarter as challenging in some areas on track and others, and importantly, showing sequential improvement throughout the period. In addition, we made progress against a number of key strategic initiative. We reported a 0.8% comparable sales gain for the second quarter. While it was at the low end of our guidance, the comps improved as we moved through each month