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<PAGE> 1
EXHIBIT 99
NEWS RELEASE
CONTACT: Peter D. Brown
Assistant Treasurer, Investor Relations
Venator Group, Inc.
(212) 720-4254
VENATOR GROUP REPORTS SECOND QUARTER RESULTS
- ADJUSTED EARNINGS PER SHARE INCREASED 80 PERCENT TO $0.09
- COMPARABLE-STORE SALES INCREASED 10.5 PERCENT
- ADJUSTED GROSS MARGIN RATE IMPROVED 270 BASIS POINTS
- DEBT, NET OF CASH, REDUCED BY $388 MILLION VERSUS PRIOR YEAR
NEW YORK, New York, August 17, 2000 - Venator Group, Inc. (NYSE: Z) today
reported adjusted net income from operations of $12 million, or $0.09 per share,
for the quarter ended July 29, 2000 compared with $7 million, or $0.05 per
share, last year. Included in adjusted net income were real estate gains of
$0.02 per share in 2000 and $0.11 per share in 1999.
Sales from adjusted operations for the 13 weeks ended July 29, 2000 were $1,014
million compared with $922 million in the year-earlier period, reflecting a
comparable-store sales increase of 10.5 percent. Excluding the effect of foreign
currency fluctuations, total adjusted sales for the quarter increased 11.4
percent.
Adjusted gross margin from operations, as a percentage of sales, improved 270
basis points to 28.8 percent for the quarter, reflecting more favorable
purchasing and less inventory clearance activity as compared with last year.
This improvement also reflects lower occupancy and buying costs, as a percentage
of sales, versus the prior-year period.
"We continue to be encouraged by the results achieved by all of our operations
during the second quarter of 2000," stated Dale W. Hilpert, Venator Group's
Chairman and Chief Executive Officer. "Operating results from all Athletic and
Northern Group retail store formats exceeded our plan. Additionally, sales from
Footlocker.com, our direct-to-customer business, continued to perform above
management's expectations, increasing 24 percent to $47 million, which included
$8 million of Internet-only sales. We continue to grow this new channel of
distribution while maintaining a tight control over our investment."
Comparable-store sales from adjusted operations for the 26 week period ended
July 29, 2000 increased 12.0 percent. Adjusted net income for the first half
rose to $0.25 per share from $0.06 per share last year. Included in adjusted net
income were real estate gains and other income of $0.07 per share in 2000 and
$0.14 per share in 1999.
Debt, net of cash, of $385 million was reduced by almost $400 million from the
corresponding prior-year period. This reduction was the result of improved
profitability, a focused capital expenditure program, and proceeds from the sale
of non-core businesses and real estate.
"Sales results from all operations exceeded our plan for the first half of
2000," said Mr. Hilpert. "More importantly, the flow through to operating profit
from increased sales was particularly strong as we improved our gross margin
rate and maintained tight control over expenses. Additionally, we continued to
improve our financial flexibility by significantly reducing debt levels and
financial leverage."
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<PAGE> 2
The Company opened 5 stores and remodeled/relocated 43 stores during the
quarter. Additionally, the Company closed 69 stores, of which 45 were shuttered
as a part of the 1999 Restructuring Program and competitively repositioning the
Northern Group. The Company's 2000 capital expenditure program continues to
track on schedule. At July 29, 2000 the Company operated 4,339 stores from
ongoing operations in 14 countries in North America, Europe and Australia.
Results are presented on an adjusted basis to facilitate comparison. Adjusted
comparisons exclude the operations and disposition of non-core businesses noted
below and the operations of the accelerated store closings for all periods
presented. The reported results for all operations are attached to this press
release. Businesses disposed or held for disposal: Afterthoughts, San Francisco
Music Box, Foot Locker Outlets, Colorado, Team Edition, Going To The Game, Randy
River, Weekend Edition, Burger King franchises, Foot Locker Japan, Northern
Getaway US and Northern Elements US.
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
worldwide 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.
-MORE-
5
<PAGE> 3
VENATOR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
PERIODS ENDED JULY 29, 2000 AND JULY 31, 1999
(In millions, except per share amounts)
THE FOLLOWING ADJUSTED RESULTS EXCLUDE THE DISPOSITION AND OPERATIONS OF SEVERAL
BUSINESSES, THE OPERATIONS OF THE ACCELERATED STORE CLOSINGS AND THE ASSOCIATED
RESTRUCTURING CHARGES FOR ALL PERIODS PRESENTED:
<TABLE>
<CAPTION>
13 Weeks 26 Weeks
-------------------------- ---------------------------
Adjusted Adjusted Adjusted Adjusted
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $1,014 $922 $2,086 $1,869
Cost of sales 722 681 1,478 1,378
Selling, general and administrative expenses 231 195 472 398
Depreciation and amortization 41 42 81 83
Interest expense, net 6 17 15 28
Other income (6) (25) (16) (31)
----- ----- ----- -----
994 910 2,030 1,856
----- ----- ----- -----
Income before income taxes 20 12 56 13
Income tax expense 8 5 21 5
----- ----- ----- -----
Net income $12 $7 $35 $8
===== ===== ===== =====
Diluted earnings per share $0.09 $0.05 $0.25 $0.06
Weighted-average diluted shares outstanding 139.0 138.7 138.8 138.0
</TABLE>
THE FOLLOWING ARE REPORTED RESULTS:
<TABLE>
<CAPTION>
13 Weeks 26 Weeks
------------------------ ------------------------
Reported Reported Reported Reported
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Sales $1,041 $1,063 $2,149 $2,142
Cost of sales 743 791 1,530 1,582
Selling, general and administrative expenses 241 248 499 504
Depreciation and amortization 41 46 81 91
Restructuring charge -- 52 -- 52
Interest expense, net 6 17 15 28
Other income (6) (25) (16) (31)
------ ------ ------ ------
1,025 1,129 2,109 2,226
------ ------ ------ ------
Income (loss) from continuing operations before income
taxes 16 (66) 40 (84)
Income tax expense (benefit) 7 (26) 16 (33)
------ ------ ------ ------
Income (loss) from continuing operations 9 (40) 24 (51)
Discontinued operations, net of income tax -- 10 -- 10
Cumulative effect of accounting change, net of income
tax -- -- -- 8
------ ------ ------ ------
Net income (loss) $9 $(30) $24 $(33)
====== ====== ====== ======
Diluted earnings per share:
Income (loss) from continuing operations $0.07 $(0.29) $0.18 $(0.37)
Income from discontinued operations -- 0.07 -- 0.07
Cumulative effect of accounting change -- --- -- 0.06
------ ------ ------ ------
Net income (loss) $0.07 $(0.22) $0.18 $(0.24)
====== ====== ====== ======
Weighted-average diluted shares outstanding 139.0 137.3 138.8 137.0
</TABLE>
- MORE -
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<PAGE> 4
VENATOR GROUP, INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
PERIODS ENDED JULY 29, 2000 AND JULY 31, 1999
(In millions)
AS ADJUSTED
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
--------------------------- -------------------------
Adjusted Adjusted Adjusted Adjusted
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ADJUSTED SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $891 $808 $1,843 $1,646
Direct to Customer 47 38 104 86
------ ---- ------ ------
938 846 1,947 1,732
Northern Group 76 76 139 137
------ ---- ------ ------
Total $1,014 $922 $2,086 $1,869
====== ==== ====== ======
ADJUSTED OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores $47 $17 $115 $45
Direct to Customer (5) (1) (8) 3
------ ---- ------ ------
42 16 107 48
Northern Group (1) -- (10) (10)
------ ---- ------ ------
Total $41 $16 $97 $38
====== ==== ====== ======
</TABLE>
AS REPORTED
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
-------------------------- ---------------------------
Reported Reported Reported Reported
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $899 $855 $1,862 $1,738
Direct to Customer 47 38 104 86
------ ---- ------ ------
946 893 1,966 1,824
Northern Group 76 86 146 155
Other 19 84 37 163
------ ---- ------ ------
Total $1,041 $1,063 $2,149 $2,142
====== ====== ====== ======
OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores (1) $48 $(58) $113 $(42)
Direct to Customer (5) (1) (8) 3
------ ---- ------ ------
43 (59) 105 (39)
Northern Group (2) (5) (16) (22)
Other (4) 2 (13) 2
------ ------ ------ ------
Total $37 $(62) $76 $(59)
====== ====== ====== ======
</TABLE>
(1) 1999 amounts include restructuring charge of $64.
- MORE -
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<PAGE> 5
VENATOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
July 29, July 31,
2000 1999
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 25 $ 78
Merchandise inventories 841 812
Net assets of discontinued operations 9 93
Assets held for disposal 45 82
Other current assets 126 158
------ ------
1,046 1,223
Property and equipment, net 764 941
Deferred tax assets 316 354
Other assets 295 255
------ ------
$2,421 $2,773
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 95 $ 332
Accounts payable 315 260
Accrued liabilities 273 320
Current portion of long-term debt and
obligations under capital leases 5 206
------ ------
688 1,118
Long-term debt and obligations under capital
leases 310 313
Other liabilities 267 333
SHAREHOLDERS' EQUITY 1,156 1,009
------ ------
$2,421 $2,773
====== ======
</TABLE>
- XXXX -
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