Foot Locker, Inc. (NYSE:FL) Q2 2020 Earnings Conference Call - Final Transcript

Aug 21, 2020 • 09:00 am ET

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Foot Locker, Inc. (NYSE:FL) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to Foot Locker's Second Quarter 2020 Financial Results Conference Call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session.

This conference call may contain forward-looking statements to 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 impact of COVID-19, effects of currency fluctuations, customer preferences, economic and market conditions worldwide and other risks and uncertainties described more fully in the Company's press release and reports filed with the SEC, including the most recent filed Form 10-K and 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. Please note, this conference call is being recorded.

I would now like to turn the call over to Jim Lance, Vice President, Corporate Finance and Investor Relations, Mr. Lance, you may begin.

Executive
James Lance

Thanks, operator. Welcome everyone to Foot Locker Inc.'s second quarter earnings conference call. I hope you and your families are healthy and safe. As reported in today's earnings release, we reported second quarter net income of $45 million compared to net income of $60 million for the second quarter of last year. On a per share basis, second quarter earnings were $0.43 compared to earnings per share of $0.55 last year.

This year's quarter includes pre-tax charges of $19 million related to the wind down of the Runners Point banner and the Eastbay restructuring, $18 million for costs incurred for the recent social unrest, and a $1 million charge related to the pension matter we have previously discussed. Excluding these items, on a non-GAAP basis, the second quarter earnings were $0.71 per share compared to earnings per share of $0.66 for the second quarter of last year.

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 earnings release. The call is being hosted remotely in order to uphold social distancing protocols with presenters calling in from different locations.

We'll begin our prepared remarks with Lauren Peters, Executive Vice President and Chief Financial Officer, who will review our second quarter results and provide some directional color around the back half of 2020. Dick Johnson, Chairman and Chief Executive Officer, will provide highlights from our second quarter performance and an update on our strategic initiatives, including how Foot Locker is navigating the COVID-19 pandemic.

Andy Gray, Executive Vice President and Chief Commercial Officer, will discuss his new role and will provide additional insights into the business drivers in the quarter. Following our prepared remarks, Dick and Lauren will respond to your questions.

With that, I'll now turn it over to Lauren.

Executive
Lauren Peters

Thank you, Jim, and good morning, everyone. We were pleased to report that we delivered a comp sales gain of 18.6%