Foot Locker, Inc: The Annual Project Report

Topics: Balance sheet, Generally Accepted Accounting Principles, Inventory Pages: 8 (2257 words) Published: December 6, 2012
The Annual Report Project

Foot Locker, INC.
3) A.
Chief executive officer: Ken C. Hicks
Location of the home office: New York City
Ending date of latest fiscal year: January 27 2012
Main Geographic area of activity: North America, Europe, Australia and New Zealand Company’s products and services: Foot Locker Inc. is Global retailer of shoes, equipment and apparel for Athletes. Company is a retail seller for one of the World’s most famous athletic brands like: Adidas; Nike; Jordan; Puma; Timberland; Reebok; Asics. The company’s services include direct-to-customer business relationship offering, athletic footwear, apparel, and equipment through internet and catalog media, and also customers are available to buy products in stores around the world Company’s auditors: Giovanna Cipriano (Chief Accounting Officer), KPMG LLP- the U.S. audit, tax, and advisory services firm. Report of the Independent registered public accounting firm (KPMG LLP) states that they have audited Foot Locker inc. financial statements from January 28, 2012. They conducted audit in accordance with the standards of the Public Company Accounting Oversight Board (United States), so they can make sure that the financial statements are free of material misstatement. They examine the amounts and disclosures in the financial statements. In the opinion of KPMG LLP (audit), Foot Locker Inc., maintained effective internal control over financial reporting at the end of the fiscal year (January 28, 2012). Recent price of company’s stock: $35.84 11/30/2012 (FL)

Dividend per Share: $0.18 per share 11/30/2012

As I mentioned earlier, Foot Locker Inc. is a leading global retailer of athletic shoes, equipment and apparel. The Company operates 3,369 athletic retail stores in 23 Countries under the brand names Foot Locker, Lady Foot Locker, Kids Foot Locker, Footaction, Champs Sports, and CCS. The company had 13,080 full-time and 26,007 part-time employees at January 28, 2012. The business/ industry where the company operates are highly competitive with low barriers to entry. The company competes primarily with athletic footwear stores, sporting goods, department stores, discount stores and many others. To remain competitive in this area of business Foot Locker Inc. must be competitive in price, quality, and selection of merchandise, store location, advertising and customer service with other businesses with similar industry. This type of industry also depends upon fashion trends and customer preferences, so the company leaders must be innovative in order to beat competition. At the beginning of 2009 leadership team of Foot Locker Inc. established long-term financial goals with a vision to be a leading retailer in athletic shoes and apparel and now, in 2012 the progress can be seen. Sales in 2009 were $4.9 billion and increased by 2011 to $5.6 billion, with the objective to reach $6.0 billion in the future. Also Gross Margin rate also improved from 30.0 percent to 31.9 percent, while selling, general, and administrative expenses went down from 22.5 percent in 2009 to a rate of 22.1 percent in 2011. As for the future plans, Foot Locker Inc. leadership team has set long-term financial goals for the period from 2012 through 2016. Mainly goals include: sales of $7.5 billion, Net Income of 7% of sales, return on invested capital of 14%, and Inventory turnover of 3+times. The Chief Executive officer Ken C. Hicks believes that the company has the resources to make those goals reality, and together with leadership team they are pursuing those goals on a few ways. First, they want to make stores and internet sites more exciting, by designing new format stores. Also they introduced new selling skills training focused on customer needs for employees. Second, the Company wants improve in developing a leadership position, in Athletic Apparel business and expand kids and women’s to play more significant roles in the business. Third, company wants to...
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