Just for Feet Shares Rise 12% on Increased
Sales (Update1)
Bloomberg News
May 21, 1998, 2:13 p.m. PT
Just for Feet Shares Rise 12% on Increased Sales (Update1)
(Adds comments from chairman in 12th and 15th paragraphs,
details on Nike agreement in 13th paragraph.)
Birmingham, Alabama, May 21 (Bloomberg) -- Just for Feet
Inc. shares rose 12 percent as sales picked up at its smaller
sporting-goods chains and on expectations that Nike Inc. is
clearing out the glut of basketball shoes that hurt profit in the
last year.
Shares also got a boost as Just for Feet added 11 new
superstores in its fiscal first quarter while still posting
earnings that were unchanged from the year-earlier period, when
it opened just four. The stable earnings suggest Just For Feet is
keeping its expenses in check, as new stores drive up a
retailer's costs, analysts said.
Just for Feet told analysts it's seeing higher sales growth
at its small chains so far in May than in the first quarter, when
sales at stores open at least a year rose in the double-digits.
Also, analysts said they expect that Nike has eliminated excess
inventory retailers were forced to sell at close-out prices.
''There's not only a glimmer on the horizon, there's a big
shining light there,'' said Brent Rystrom, analyst at Piper
Jaffray Inc., who rates Just for Feet a ''strong buy.''
Shares of Birmingham, Alabama-based Just for Feet rose
2 15/32 to 22 13/32 in trading of 956,400, more than the three-
month daily average of 473,168.
Just for Feet today said its fiscal first-quarter net income
rose to $5.82 million, or 19 cents a diluted share, from $5.20
million, or 18 cents, in the year-earlier period. Per-share
results matched the average estimate of eight analysts surveyed
by First Call Corp. Estimates ranged from 18 cents to 19 cents.
Revenue for the quarter ended April 30 rose 64 percent to
$151.9 million from $92.8 million. Same-store sales, or sales at
stores open at least one year, rose 3.5 percent.
Same-store sales are considered the best measure of a
retailer's performance because they exclude results from new,
remodeled or closed stores.
Just for Feet operates 84 company and 11 franchise Just for
Feet superstores. It also operates 101 company and 48 franchised
specialty stores. The retailer acquired those chains last year
through its purchases of Athletic Attic and Imperial Sports.
Nike
In the last year, revenue at Nike, the world's largest
sneaker maker, stalled as consumers favored less-expensive
sneaker models and running shoes over costlier basketball shoes
and cross-trainers.
As a result, Nike was forced to mark down excess inventory.
Sales of that merchandise hurt profit at the retailers. However,
as that close-out merchandise gets cleared out, sales of the more
profitable sneakers are picking up, analysts said.
''The over-inventory position with most vendors is now at an
end, and by the end of this year things will be back to normal,''
said Just For Feet Chairman Harold Ruttenberg, in a conference
call today with analysts.
Just For Feet recently received so-called Strategic Account
status from Nike, which brings benefits such as larger discounts,
extra allocations of popular products, more marketing dollars and
extra field support.
Nike plans to soon open an office in Birmingham, which will
drive Just For Feet's business even further, Ruttenberg said.
''We feel confident that when the industry takes off again,
we'll be in an excellent position to take advantage of the
upswing,'' he said.
--Anne Pollak in the Princeton newsroom (609) 279-4043/shw |
