Foot Locker, Confronting a Loss, Is Exploring Strategic Options

Athletic shoe retailer Foot Locker, faced with its first loss in six years, has hired Lehman Brothers to assist it in pursuing a possible sale. Several private equity firms have already expressed interest. Foot Locker, which tried unsuccessfully to buy Genesco Inc. in April, revised its Q2 earnings guidance to a net loss of $0.17-0.20 per share from a prior forecast of net income of $0.15-0.20. Analysts had been expecting profit of $0.16. The company spent $55 million ($0.22/share) in the quarter on liquidation of slow-moving merchandise. It is also considering closing 250 of its 4,000 stores this year, twice its previous estimate. The company's shares closed down 1.3% at $18.80, their lowest point since November 2003.

Sources: Bloomberg, TheStreet.com, Dow Jones
Commentary: Foot Locker: Management Dedicated to Increasing Shareholder Value • Foot Locker Ends Pursuit of Genesco
Stocks/ETFs to watch: FL, LEH. Competitors: FINL, SRR. ETFs: RTH, XRT, PMR

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