Venator Group Reports First Quarter Results
(PR Newswire 05/19 16:12:41)
NEW YORK, May 19 /PRNewswire/ -- Venator Group, Inc. (NYSE: Z) today
reported a net loss of $11 million, or $0.08 per share, for the 13-weeks ended
May 1, 1999. This compares to a net loss of $5 million, or $0.04 per share,
for the same period a year ago, which included a $13 million, or $0.10 per
share, loss from discontinued operations. Sales for the quarter rose
2.0 percent to $1,079 million from $1,058 million in the year-earlier period,
reflecting flat comparable-store sales for the period. Excluding the effect
of foreign currency fluctuations and sales from disposed operations, sales
increased 2.7 percent for the period.
"We are pleased with the progress we have made with our corporate-wide
sales initiatives, particularly at Foot Locker Worldwide, our largest
division, which achieved stronger athletic footwear sales, primarily in the
running category," stated Roger Farah, Venator Group's Chairman and Chief
Executive Officer. "Exciting, exclusive and proprietary product, such as our
highly successful Tuned Air initiative, continues to differentiate us in what,
we believe, is an improving, but competitive, athletic footwear market. Our
selection of high-end performance footwear, together with a more focused
merchandise assortment, improvements in our in-stock position and an enhanced
selection of value product offerings, are strategies that we expect will
continue to drive top line sales opportunities in the important second half of
the year."
"Several of our non-athletic specialty divisions, particularly
Afterthoughts, showed improvement in quarterly operating results compared to a
year ago, reflecting the momentum of our merchandising and new store and
remodeling initiatives," said Mr. Farah. "Sales performance at remodeled and
relocated stores continues to be very encouraging. Comparable-store sales for
remodeled and relocated stores opened during 1998 through the first quarter of
1999 are up 15.2 percent at Foot Locker U.S., 8.7 percent at Lady Foot Locker,
22.1 percent at Kids Foot Locker, 32.2 percent at Foot Locker International
and 55.7 percent at Afterthoughts."
During the quarter the Company made important management changes to
strengthen two of its key divisions. Rick Mina, formerly the President of
Foot Locker Europe, was named President and Chief Executive Officer of Champs
Sports. Simon Rider, who was previously Foot Locker Europe's Chief Operating
Officer, became its President. Jim Harrington, formerly the President and
Managing Director of Venator Group Australia Limited, was appointed President
and Chief Executive Officer of Venator Group Canada Inc., which includes the
Northern Group of apparel stores. Rowan Webb, previously Australia's General
Manager, became its President and Managing Director. "We are pleased to have
the depth in management to allow us to promote from within the Company and to
have executives of this caliber and leadership to step up and take on the
challenge of renewing our execution and merchandising focus at these very
significant businesses," continued Mr. Farah.
Gross margins, as a percentage of sales, declined 260 basis points to
26.7% for the quarter, reflecting primarily increased occupancy costs relating
to new real estate compared to last year. Excluding occupancy costs, gross
margins on merchandise sold during the quarter showed an improvement towards
historical levels, reflecting significantly less markdown activity at all
operating divisions other than the Northern Group.
Merchandise inventories were on plan, essentially unchanged at
$889 million (at cost) compared to the prior period, reflecting a 16% decrease
in inventories per square foot. As the Company moves into the summer and fall
seasons, it expects aggregate inventories to be below last year's reported
levels.
Selling, general and administrative expenses, as a percentage of sales,
decreased 180 basis points to 23.8% for the period, reflecting continued tight
cost controls at both the corporate and divisional levels. As previously
announced, the Company expects to reduce its corporate and divisional
operating expenses by a minimum of $100 million in 1999 and cut its corporate
costs to one percent of sales by 2001.
During the quarter the Company recognized in other income $5 million of
the deferred gain resulting from the 1998 sale and lease-back of its former
corporate headquarters building. This compares to other income of $19 million
recorded in the same period a year ago, which resulted from the sale of its
former six-store nursery chain.
The Company's $175 million capital expenditure program for 1999, which
includes approximately 200 new stores and 150 store remodels, as well as the
closing of 175 stores, remains on target. During the first quarter, the
Company opened 56 stores, remodeled 61 stores and closed 109 stores. Venator
Group ended the quarter with 5,949 stores in 15 countries in North America,
Europe, Australia, and Asia.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements, which reflect
management's current views of future events and financial performance. These
forward-looking statements are based on many assumptions and factors including
the effects of currency fluctuations, consumer preferences, economic
conditions world-wide and other factors detailed in the Company's filings with
the Securities and Exchange Commission. Any changes in such assumptions or
factors could produce significantly different results.
VENATOR GROUP, INC.
Consolidated Statements of Operations
(In millions, except per share amounts)
13-Weeks Ended
(unaudited)
May 1, 1999 May 2, 1998
Sales $1,079 $1,058
Costs and expenses:
Cost of sales 791 748
Selling, general
and administrative expenses 257 271
Depreciation and amortization 45 34
Interest expense 11 10
Other income (6) (19)
1,098 1,044
Income (loss) from continuing
operations before income taxes (19) 14
Income tax expense (benefit) (8) 6
Income (loss) from continuing operations (11) 8
Loss from discontinued operations, net of
tax benefit of $9 million -- (13)
Net loss $(11) $(5)
Diluted Earnings Per Share:
Income (loss) from continuing operations $(0.08) $ 0.06
Loss from discontinued operations -- (0.10)
Net loss $(0.08) $(0.04)
Weighted-average common shares
outstanding assuming dilution 136.7 136.4
VENATOR GROUP, INC.
Supplemental Information
(In millions)
(unaudited) 13-Weeks Ended
May 1, 1999 May 2, 1998
Sales by segment
Global Athletic Group $931 $907
Northern Group 69 74
All Other 79 73
1,079 1,054
Disposed operations -- 4
$1,079 $1,058
Operating results by segment
Global Athletic Group $ 19 $ 46
Northern Group (16) (9)
All Other 1 (6)
4 31
Disposed operations (1) 18
$3 $49
VENATOR GROUP, INC.
Condensed Consolidated Balance Sheets
(In millions)
(unaudited) May 1, 1999 May 2, 1998
Assets
CURRENT ASSETS
Cash and cash equivalents $13 $13
Merchandise inventories 889 880
Net assets of discontinued operations 101 628
Other current assets 210 195
1,213 1,716
Property and equipment, net 984 688
Deferred taxes
Other assets 357 338
262 282
$2,816 $3,024
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Short-term debt $274 $253
Accounts payable and accrued liabilities 503 511
Current portion of reserve for
discontinued operations 126 52
Current portion of long-term debt and
obligations under capital leases 7 19
910 835
Long-term debt and
obligations under capital leases 513 509
Long-term portion of discontinued reserve 30 18
Other liabilities 328 379
SHAREHOLDERS' EQUITY 1,035 1,283
$2,816 $3,024
SOURCE Venator Group, Inc.
-0- 05/19/99
/CONTACT: Juris Pagrabs, Vice President, Investor Relations of Venator
Group, Inc., 212-553-7017/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 120620/
/Web site: venatorgroup.com
(Z)
CO: Venator Group, Inc.
ST: New York
IN: REA
SU: ERN
S.PN Z Z-T WOLW-L WLTH-L WAU-L WUS-L
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