Dive Brief:
- As Foot Locker launched private labels and closed acquisitions in Q3, sales rose 3.9% to $2.2 billion, and increased 13.3% from 2019, while comps were up 2.2%. Net income was down 40% to $158 million, while operating income increased by 10% to $196 million, according to a company press release.
- The day before its earnings report, the athletics retailer announced several organizational changes, including the promotion of Frank Bracken to chief operating officer. A new role for the company, Bracken will report to CEO Dick Johnson and oversee global operations, including customer experience, technology and supply chain.
- The company also promoted Susie Kuhn to president of EMEA and general manager of Foot Locker Europe, where she will oversee the Foot Locker Europe and Sidestep brands. Chief Commercial Officer Andy Gray's role will be expanded, and the company is also looking to hire a chief strategy, innovation and development officer.
Dive Insight:
Foot Locker has been on the move lately and reported progress on several of its initiatives over the course of the quarter.
The athletics retailer closed its WSS and Atmos acquisitions in the quarter and has begun integrating them into the business. Footaction stores are continuing to close or be converted into Foot Locker's other banners. And the company officially merged its Champs Sports and Eastbay brands about 18 months after integrating the corporate organizations.
Converted Footaction stores are performing above expectations, Johnson said on a call with analysts, and better than they performed as Footaction locations. Champs Sports x Eastbay will open the largest Homefield concept store in its fleet, Johnson said, which will feature Eastbay's performance line and several more experiential features. An athlete "fuel" station will offer protein shakes and power bars, and the store will have a dedicated space for holding coaching clinics, yoga classes and other activities.
Foot Locker also made big moves on its private labels in Q3, launching its performance owned brand for Eastbay, debuting the Lckr brand at Foot Locker and introducing its Don C lifestyle brand. The last of these "immediately resonated" with customers, according to Gray, and the company is planning more celebrity collaborations for its apparel business going forward. Foot Locker's women's business will also see new private labels, which are set to launch in Q4, Gray said.
"We are really positive about our owned brand strategy," Johnson said on a call with analysts.
When asked how much of the assortment private labels could eventually make up, Johnson described them as "complementary" to the branded product Foot Locker has in stores, seeking to fill in price gaps or style gaps rather than replace branded products. However, "we'll certainly look to expand their presence globally," Johnson said.
