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The New York-based company reported net income for the third quarter of $24 million or $0.16 per share, compared to a net loss of $33 million or $0.22 per share for the year-ago quarter.
The latest quarter results include an impairment charge of $3 million or $0.02 per share to write down the value of a short-term investment, while the year-ago quarter results included an impairment charge to write down long-lived assets for the company's U.S. store operations and expenses associated with closing unproductive stores, totaling $66 million or $0.43 per share.
Excluding items, adjusted net income for the third quarter was $27 million or $0.18 per share, compared to $33 million or $0.21 per share in the prior year quarter.
On average, 8 analysts polled by First Call / Thomson Financial expected the company to earn $0.25 per share for the third quarter. Analysts' estimates typically exclude special items.
Sales for the third quarter fell 3.5% to $1.31 billion from $1.36 billion in the same quarter last year. Excluding the effect of foreign currency fluctuations, third quarter sales declined 3%. Same-store sales for the quarter dipped 1.7%. seven analysts had a consensus revenue estimate of $1.35 billion for the third quarter.
"Our third quarter financial results reflected the extremely challenging retail environment in the U.S. marketplace," stated Matthew Serra, Foot Locker, Inc.'s Chairman and Chief Executive Officer. "The economic slowdown in the United States, particularly during the months of September and October, was offset in part by our ability to improve our sales and earnings in our international businesses.
Foot Locker said profit increased in its Europe, Canada and Asia Pacific division in the third quarter as compared to a year earlier.
For the first nine months of the year, the company reported net income of $45 million or $0.29 per share, compared to a net loss of $34 million or $0.22 per share for the same period last year.
Adjusted net income for the nine-month period was $66 million or $0.43 per share, compared to $32 million or $0.21 per share in the prior year period.
Year-to-date sales declined 0.9% to $3.92 billion from $3.96 billion in the comparable year-ago period.
Foot Locker operates the Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports and Footactions retail chains.
The company opened 58 new stores, remodeled or relocated 194 stores and closed 129 stores during the first nine months of 2008. At November 1, the company operated 3,714 stores in 21 countries in North America, Europe and Australia. In addition, 16 franchised stores are currently operating in the Middle East and South Korea.
Looking forward, the company lowered its full year 2008 adjusted earnings guidance to a range of $0.50 to $0.63 per share from its prior guidance of $0.70 to $0.85 per share to reflect its results for the third quarter and a more guarded outlook for its fourth quarter. Analysts currently expect the company to earn $0.82 per share for the full year 2008.
The ongoing economic crisis, which has been dubbed as the worst since the Great Depression, has wreak havoc on retailers, as it has forced consumers to sharply cut back on their spending. A shaky job market and a prolonged housing slump have added to the gloom.
Many retailers have reported lower earnings for the third quarter and issued profit warnings for the all-important fourth quarter, which includes the holiday shopping season.
Earlier this month, Foot Locker closed its $103.2 million cash purchase of dELiA*s, Inc.'s (DLIA | Quote | Chart | News | PowerRating) CCS business. Foot Locker expects the acquisition of CCS to be accretive to its diluted earnings per share within the first full year of operation.
Foot Locker shares, which have traded in a range of $7.92 to $18.19 over the past year, closed Thursday's regular trading session at $7.63, down 45 cents or 5.57%.
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