Full Year Guidance

Commentary

  Sales Change

-1.0% to +0.5%

Includes ~1.0% expected foreign currency headwinds

  Comparable Sales Change

+1.0% to +2.5%

  Store Count Change

Down ~4%

  Square Footage Change

Down ~2%

  Licensing and Other Revenue

~$24 million

  Gross Margin

29.3% to 29.7%

Improving merchandise margin

  SG&A Rate

24.3% to 24.5%

Modest leverage excluding incentive compensation normalization

  D&A

$200 to $210 million

  EBIT Margin

2.6% to 3.1%

  Net Interest

~$12 million

  Non-GAAP Tax Rate

32.5% to 33.0%

  Non-GAAP EPS

$1.35 to $1.65

  Capital Expenditures 

$270 million

Focusing on customer-facing investments

  Adj. Capital Expenditures *

$300 million

Includes $30 million in technology investments reflected in operating cash flows 

* Adjusted Capital Expenditures includes Software-as-a-Service implementation costs that are amortized through

operating expenses over their contract terms. 

Foot Locker, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

Periods ended February 1, 2025 and February 3, 2024

(In millions, except per share amounts)

Fourth Quarter

Year-to-Date

2024

2023

2024

2023

Sales

$

2,243

$

2,380

$

7,971

$

8,154

Licensing revenue

5

4

17

14

Total revenue

2,248

2,384

7,988

8,168

Cost of sales

1,580

1,746

5,666

5,895

Selling, general and administrative expenses

501

533

1,920

1,852

Depreciation and amortization

49

51

202

199

Impairment and other

36

21

97

80

Income from operations

82

33

103

142

Interest expense, net

(2)

(2)

(8)

(9)

Other (expense) income, net

(3)

(555)

(44)

(556)

Income (loss) from continuing operations before income taxes

77

(524)

51

(423)

Income tax expense (benefit)

22

(135)

33

(93)

Net income (loss) from continuing operations

55

(389)

18

(330)

Net loss from discontinued operations, net of tax

(6)

-

(6)

-

Net income (loss)

$

49

$

(389)

$

12

$

(330)

Diluted earnings per share

Earnings (loss) per share from continuing operations

$

0.57

$

(4.13)

$

0.19

$

(3.51)

Net loss per share from discontinued operations, net of tax

$

(0.06)

$

—

$

(0.06)

$

—

Net earnings (loss) per share

$

0.51

$

(4.13)

$

0.13

$

(3.51)

Weighted-average diluted shares outstanding

95.6

94.4

95.5

94.2

Foot Locker, Inc.

Non-GAAP Reconciliation

(unaudited)

Periods ended February 1, 2025 and February 3, 2024

(In millions, except per share amounts) 

We estimate the tax effect of all non-GAAP adjustments by applying a marginal tax rate to each item. The income tax items represent

the discrete amount that affected the period. The non-GAAP financial information is provided in addition, and not as an alternative, to

our reported results prepared in accordance with GAAP. The various non-GAAP adjustments are summarized in the tables below.

Reconciliation of GAAP to non-GAAP results:

Fourth Quarter

Year-to-Date

2024

2023

2024

2023

Pre-tax income:

Income (loss) from continuing operations before income taxes

$

77

$

(524)

$

51

$

(423)

Pre-tax adjustments excluded from GAAP:

Impairment and other ⁽¹⁾

36

21

97

80

Other expense / income ⁽²⁾

—

554

37

548

Adjusted income before income taxes (non-GAAP)

$

113

$

51

$

185

$

205

After-tax income:

Net income (loss)

$

49

$

(389)

$

12

$

(330)

After-tax adjustments excluded from GAAP:

Impairment and other, net of income tax benefit of $9, $7, $22, and

$18 million, respectively ⁽¹⁾

27

14

75

62

Other expense / income, net of income tax benefit of $-, $143, $-,

and $142 million, respectively ⁽²⁾

—

411

37

406

Net loss from discontinued operations, net of income tax benefit of

$2, $-, $2, and $- million, respectively ⁽³⁾

6

—

6

—

Tax reserves benefit ⁽⁴⁾

—

—

—

(4)

Adjusted net income (non-GAAP)

$

82

$

36

$

130

$

134

Fourth Quarter

Year-to-Date

2024

2023

2024

2023

Earnings per share:

Earnings (loss) per share

$

0.51

$

(4.13)

$

0.13

$

(3.51)

Diluted EPS amounts excluded from GAAP:

Impairment and other ⁽¹⁾

0.29

0.15

0.80

0.66

Other expense / income ⁽²⁾

—

4.36

0.38

4.31

Net loss from discontinued operations ⁽³⁾

0.06

—

0.06

—

Tax reserves benefit / charge ⁽⁴⁾

—

—

—

(0.04)

Adjusted diluted earnings per share (non-GAAP)

$

0.86

$

0.38

$

1.37

$

1.42

Notes on Non-GAAP Adjustments:

(1)

Included in the fourth quarter of 2024 impairment and other caption were $19 million of reorganization costs primarily related to the announced closure and relocation of the Company's global headquarters and $10 million of impairment of long-lived assets and right-of-use assets accelerated tenancy charges related to the annual review of underperforming stores and the shutdown of the businesses operating in South Korea, Denmark, Norway, and Sweden. The Company will close all stores operating in those regions as it focuses on improving the overall results of its international operations. The fourth quarter also included charges related to legal and other matters totaling $7 million representing changes in estimates and loss accruals for various matters. The Company routinely monitors claims and records provisions for losses when claims become probable and the amount is estimable.

For fiscal year 2024, impairment and other included impairment charges of $32 million from a review of underperforming stores and accelerated tenancy charges on right-of-use assets primarily related to its decision to exit the underperforming operations and the closure and sublease of an unprofitable store in Europe. Additionally, the Company incurred $26 million of reorganization costs primarily related to the announced closure and relocation of the Company's global headquarters.  During the third quarter, the Company recorded a $25 million write down of the atmos tradename following an impairment review. Additionally, the fiscal year reflected a charge of $14 million related to legal and other matters.

Foot Locker, Inc.

Non-GAAP Reconciliation

(unaudited)

Periods ended February 1, 2025 and February 3, 2024

(In millions, except per share amounts) 

Notes on Non-GAAP Adjustments (continued):

Fourth quarter 2023 impairment and other included $11 million of impairment of long-lived assets and right-of-use assets and accelerated tenancy charges. These were incurred as part of the Company's annual review of underperforming stores and the planned wind down of its U.S. atmos stores, partially offset by a net benefit from the settlement of lease obligations associated with Sidestep store closures. In addition, the Company recorded intangible asset impairment of $9 million on the atmos tradename and reorganization costs of $5 million. These charges were partially offset by a $4 million reduction in the fair value of the atmos contingent consideration liability.

For fiscal year 2023, impairment and other included impairment charges of $30 million from a review of underperforming stores and accelerated tenancy charges on right-of-use assets for closures of the Sidestep banner and certain Foot Locker Asia stores. Additionally, the Company incurred transformation consulting expense of $27 million and reorganization costs of $17 million primarily related to severance and the closures of the Sidestep banner, certain Foot Locker Asia stores, and a North American distribution center. The fiscal year also included the atmos intangible asset impairment of $9 million, partially offset by the $4 million reduction in the fair value of the atmos contingent consideration.

(2)

For fiscal year 2024, other expense / income included a $35 million impairment charge related to a minority investment. The Company evaluates the minority investment for impairment whenever events or circumstances indicate that the carrying value of the investment may not be recoverable and that impairment is other than temporary. If an indication of impairment occurs, the Company evaluates recoverability of the carrying value based on the fair value of the minority investment. If an impairment is indicated, the Company adjusts the carrying values of the investment downward, if necessary, to their estimated fair values. Other expense / income also included $2 million of the Company's share of losses related to equity method investments.

Other expense / income for the fourth quarter of 2023 consisted of a $478 million non-cash charge on minority investments and a $75 million charge related to the partial settlement of pension plan obligations. During the fourth quarter, as part of efforts to reduce pension plan obligations, the Company transferred approximately $109 million of its U.S. Qualified pension plan registered assets and liabilities to an insurance company through the purchase of a group annuity contract, under which an insurance company is required to directly pay and administer pension payments to certain pension plan participants, or their designated beneficiaries. In connection with this transaction, the Company recorded a non-cash pretax settlement charge of $75 million. This settlement charge accelerated the recognition of previously unrecognized losses in "Accumulated Other Comprehensive Loss." Additionally, fiscal year 2023 also included a $3 million gain from the sale of a North American corporate office property, a $3 million gain from the sale of the Singapore and Malaysian Foot Locker businesses to a license partner, and $2 million of the Company's share of losses related to equity method investments.

(3)

In the fourth quarter of 2024, the Company recorded a charge to discontinued operations of $8 million ($6 million after tax) related to a legal matter of a business it formerly operated.

(4)

In the first quarter of 2023, the Company recorded a $4 million benefit related to income tax reserves due to a statute of limitations release. 

Foot Locker, Inc.

Sales by Banner

(unaudited)

Periods ended February 1, 2025 and February 3, 2024

(In millions)

Fourth Quarter

Year-to-Date

2024

2023

Constant

Currencies

Comparable

Sales

2024

2023

Constant

Currencies

Comparable

Sales

Foot Locker

$

945

$

961

(1.1)

%

5.5

%

$

3,227

$

3,205

0.9

%

3.5

%

Champs Sports

334

372

(9.9)

1.8

1,155

1,304

(11.3)

(3.2)

Kids Foot Locker

207

214

(3.3)

4.0

727

716

1.5

3.4

WSS

178

182

(2.2)

(3.3)

660

640

3.1

(3.4)

Other

1

—

n.m.

n.m.

2

1

n.m.

n.m.

North America

1,665

1,729

(3.4)

3.6

5,771

5,866

(1.4)

1.3

Foot Locker

451

495

(6.1)

1.9

1,735

1,697

2.5

4.4

Sidestep

—

—

n.m.

n.m.

—

26

n.m.

n.m.

EMEA

451

495

(6.1)

1.9

1,735

1,723

0.9

4.4

Foot Locker

91

106

(9.4)

(7.2)

327

387

(14.0)

(6.6)

atmos

36

50

(24.0)

(8.7)

138

178

(16.3)

(6.8)

Asia Pacific

127

156

(14.1)

(7.6)

465

565

(14.7)

(6.7)

Total

$

2,243

$

2,380

(4.6)

%

2.6

%

$

7,971

$

8,154

(1.9)

%

1.4

%

Foot Locker, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(In millions)

February 1,

February 3,

2025

2024

ASSETS

Current assets:

Cash and cash equivalents

$

401

$

297

Merchandise inventories

1,525

1,509

Assets held for sale

10

—

Other current assets

323

419

2,259

2,225

Property and equipment, net

910

930

Operating lease right-of-use assets

2,061

2,188

Deferred taxes

143

114

Goodwill

759

768

Other intangible assets, net

365

399

Minority investments

115

152

Other assets

136

92

$

6,748

$

6,868

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

378

$

366

Accrued and other liabilities

434

428

Current portion of long-term debt and obligations under finance leases

5

5

Current portion of lease obligations

507

492

Liabilities held for sale

6

—

1,330

1,291

Long-term debt and obligations under finance leases

441

442

Long-term lease obligations

1,831

2,004

Other liabilities

237

241

Total liabilities

3,839

3,978

Total shareholders' equity

2,909

2,890

$

6,748

$

6,868

Foot Locker, Inc.

Condensed Consolidated Statement of Cash Flows

(unaudited)

(In millions)

($ in millions)

2024

2023

From operating activities:

Net income (loss)

$

12

$

(330)

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization

202

199

Non-cash impairment and other

57

40

Fair value adjustments to minority investments

35

478

Share-based compensation expense

21

13

Deferred income taxes

(28)

(136)

Pension settlement charge

—

75

Fair value change in contingent consideration

—

(4)

Gain on sales of businesses

—

(3)

Gain on sale of property

—

(3)

Change in assets and liabilities:

Merchandise inventories

(40)

120

Accounts payable

18

(122)

Accrued and other liabilities

11

(109)

Other, net

57

(127)

Net cash provided by operating activities

345

91

From investing activities:

Capital expenditures

(240)

(242)

Minority investments

(1)

(2)

Proceeds from minority investments

1

—

Proceeds from sales of businesses

—

16

Proceeds from sale of property

—

6

Net cash used in investing activities

(240)

(222)

From financing activities:

Payment of long-term debt and obligations under finance leases

(6)

(6)

Shares of common stock repurchased to satisfy tax withholding obligations

(5)

(10)

Payment of debt issuance costs

(4)

—

Proceeds from exercise of stock options

5

5

Treasury stock reissued under employee stock plan

3

4

Repayment of the revolving credit facility

—

(146)

Dividends paid on common stock

—

(113)

Proceeds from the revolving credit facility

—

146

Net cash used in financing activities

(7)

(120)

Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash

(2)

3

Net change in cash, cash equivalents, and restricted cash

96

(248)

Cash, cash equivalents, and restricted cash at beginning of year

334

582

Cash, cash equivalents, and restricted cash at end of period

$

430

$

334

Foot Locker, Inc.

Store Count and Square Footage

(unaudited)

Store activity is as follows:

February 3,

February 1,

Relocations/

2024

Opened

Closed

2025

Remodels

Foot Locker U.S.

723

1

47

677

215

Foot Locker Canada

85

—

1

84

34

Champs Sports

404

—

21

383

2

Kids Foot Locker

390

2

23

369

108

WSS

141

12

2

151

3

Footaction

1

—

—

1

—

North America

1,744

15

94

1,665

362

Foot Locker Europe ⁽¹⁾

637

10

39

608

97

EMEA

637

10

39

608

97

Foot Locker Pacific

98

1

3

96

14

Foot Locker Asia

13

—

2

11

—

atmos

31

—

1

30

5

Asia Pacific

142

1

6

137

19

Total

2,523