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Foot Locker’s online sales grow double digits in Q2

August 23, 2016 04:36 PM

Online sales growth for athletic apparel retail chain Foot Locker Inc. was “in the teens” globally, led by significantly higher growth rates in Europe and Canada, the retailer said last week.

Foot Locker does not break out online sales in its earnings reports, but in a conference call with analysts last week, president and CEO Richard A. Johnson said the retailer’s “digital businesses are approaching annual sales of $1 billion,” according to a transcript from Seeking Alpha.

To bolster sales, Foot Locker says it has increased its marketing spending to drive consumers to its U.S. websites. In addition to the Foot Locker website, the company operates websites for the Lady Foot Locker, Kids Foot Locker, Footaction, Six:02, Champs Sports, Eastbay, Runners Point and Sidestep brands. 

“In response to the competitive environment and a softening of traffic to our U.S. websites, we were more promotional on our digital businesses than we had expected heading into the quarter. We also spent more to drive traffic to our websites,” chief financial officer Lauren Peters said on the call, though she did not say how much the company spent.

Johnson told analysts the retailer increasingly connects with consumers via their mobile devices “where we lead in social media interaction, including some of the newer platforms such as Instagram Stories, Facebook Live and Snapchat.” For example, on June 4 the retailer hosted a Facebook Live broadcast of the Sweat In Style fashion show on its Six:02 Facebook page.

Instagram Stories is a feature within the image-focused social network that lets users and brands post photos and videos that disappear after 24 hours. Facebook Live allows users to broadcast live on Facebook. Snapchat is an app that offers private messaging and the ability to post public content, including brand networks and live events.

Foot Locker recently hosted a Twitter Q&A with James Harden of the NBA’s Houston Rockets, Johnson said, Also, the retailer’s SIX:02 stores will promote products from Nike, Adidas and others via the Bitmoji app by allowing users to dress up their avatars in those fashions. That app allows users to create personal avatars and dress them up in a variety of virtual wearables. The avatars can then be shared in e-mail, social media and elsewhere. Bitmoji, which was acquired by Snapchat earlier this year when Snapchat bought Bitstrips Inc., recently began to allow brands to advertise products or services inside the app.

“The troubled area on our digital business is really the Eastbay brand, and we saw some pressure on the traffic and the pricing in the quarter, especially across the technical categories,” Johnson said. Those remarks were similar to ones Johnson made after the release of Foot Locker’s fiscal first quarter 2016 results.

Foot Locker is No. 50 in the Internet Retailer 2016 Top 500 Guide.

For the fiscal second quarter ended July 30, Foot Locker reported:

  • Revenue of $1.780 billion, up 5.0% from $1.695 billion in the year-ago quarter.
  • A comparable-store sales gain of 4.7%.
  • Net income of $127 million, up 6.7% compared with net income of $119 million.

For the first half of fiscal 2016, Foot Locker reported:

  • Revenue of $3.767 billion, up 4.3% from $3.611 billion from 2015.
  • Net income of $318 million, up 5.0% from $303 million.
 

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