Foot Locker reinstates dividend while navigating coronavirus upheaval

Foot Locker Inc. reported higher profit than Wall Street expected and reinstated its dividend after weathering the COVID-19 pandemic as well as social unrest following the death of George Floyd.

While the New York-based retailer’s second-quarter profit fell 25% from a year ago to $45 million, its adjusted per-share earnings of 71 cents outstripped the 57-cent average estimate from analysts surveyed by Refinitiv. The results included pre-tax charges of $19 million related to the winding down of its Runners Point business and the restructuring of Eastbay and $18 million linked to nationwide protests over the deaths of Black people in police custody that disrupted some operations.

Sales, meanwhile, rose 17% year-over-year to $2.08 billion, outpacing the $2 billion that Wall Street anticipated. Comparable sales, or sales at stores open at least a year, increased by 19%.

"Despite the challenging backdrop of the pandemic, and social unrest, we achieved strong second-quarter results, led by our digital business, with a return to growth in both the top and bottom line,” CEO Richard Johnson said in a statement.

Foot Locker ended the quarter with $1.19 billion of inventory, down 2.7% from last year.

Cash on hand at the end of June totaled $1.37 billion compared with $121 million in long-term debt. The strong liquidity position allowed the board of directors to reinstate the quarterly dividend of 15 cents per share, payable in October.

Foot Locker withdrew its full-year forecast in March as COVID-19 spread around the globe. The company did not provide updated guidance due to uncertainty surrounding the back-to-school season and team sports, as well as the potential for more government relief for taxpayers.

CLICK HERE TO READ MORE ON FOX BUSINESS

Shares fell 30% this year through Thursday, underperforming the S&P 500’s 4.79% gain.