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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 18, 2000
VENATOR GROUP, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
New York No. 1-10299 13-3513936
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
112 West 34th Street, New York, New York 10120
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (212) 720-3700
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Item 5. Other Events.
On May 18, 2000 the Registrant reported sales and operating
results for the quarter ended April 29, 2000. (See Exhibit 99, which, in its
entirety, is incorporated herein by reference.)
Item 7. Financial Statements and Exhibits.
(c) Exhibits
In accordance with the provisions of Item 601 of Regulation
S-K, an index of exhibits is included in this Form 8-K on page 3.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned being hereunto duly authorized.
VENATOR GROUP, INC.
(Registrant)
Date: May 19, 2000 By: /s/ Bruce L. Hartman
Bruce L. Hartman
Senior Vice President and
Chief Financial Officer
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VENATOR GROUP, INC.
INDEX OF EXHIBITS
FURNISHED IN ACCORDANCE
WITH THE PROVISIONS OF
ITEM 601 OF REGULATION S-K
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Exhibit No. in Item 601
of Regulation S-K Description
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99 News Release dated May 18, 2000
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EXHIBIT 99
NEWS RELEASE
CONTACT: Peter D. Brown
Assistant Treasurer, Investor
Relations
Venator Group, Inc.
(212) 720-4254
VENATOR GROUP REPORTS FIRST QUARTER RESULTS
- - ADJUSTED NET INCOME FROM OPERATIONS OF $23 MILLION, OR $0.16 PER SHARE
- - COMPARABLE-STORE SALES INCREASED 13.6 PERCENT
- - ADJUSTED GROSS MARGIN RATE IMPROVED 390 BASIS POINTS
- - DEBT, NET OF CASH, REDUCED BY $418 MILLION VERSUS PRIOR YEAR
NEW YORK, New York, May 18, 2000 - Venator Group, Inc. (NYSE: Z) today reported
adjusted net income from operations of $23 million, or $0.16 per share, for the
quarter ended April 29, 2000 compared with $1 million, or $0.01 per share, last
year.
On a pre-tax basis, adjusted income from operations increased $35 million.
Adjusted income from operations, before tax, excludes operating losses from
non-core businesses and stores included in the accelerated store closing program
of $12 million in 2000 and $19 million in 1999. Results of both periods include
pre-tax real estate gains and other income of $10 million and $6 million in 2000
and 1999, respectively.
Sales from adjusted operations for the 13 weeks ended April 29, 2000 were $1,072
million compared with $947 million in the year-earlier period, reflecting a
comparable-store sales increase of 13.6 percent. Excluding the effect of foreign
currency fluctuations, total adjusted sales for the quarter increased 14.5
percent.
Adjusted gross margin from operations, as a percentage of sales, improved 390
basis points to 29.2 percent for the quarter, reflecting more favorable
purchasing and a less promotional environment as compared with last year.
Adjusted merchandise inventories decreased 2.8 percent to $766 million compared
with $788 million a year ago.
"We are encouraged with the first quarter results achieved by all of our
operations," stated Dale W. Hilpert, Venator Group's Chairman and Chief
Executive Officer. "Sales from all Athletic and Northern Group retail formats
exceeded our plan. Our more-focused company continued to provide trend-right
products to our mall-based customers. Additionally, sales of Footlocker.com, our
direct-to-customer business, increased 16.7 percent to $57 million, which
included $8 million of Internet-only sales."
"Our inventory levels at the end of the first quarter were on plan. Enhanced
control over merchandise inventories has significantly improved our sales
productivity and positions us well for the balance of 2000."
"Our financial position also improved," said Mr. Hilpert. "Debt, net of cash, of
$363 million was reduced over $400 million from the corresponding prior year
period. This reduction was the result of improved inventory management, tight
expense controls, a focused capital expenditure program and proceeds from the
sale of non-core businesses."
The senior management team was realigned during the first quarter, with Dale W.
Hilpert named Chairman of the Board and continuing in his role as Chief
Executive Officer. Matthew D. Serra was promoted to President and Chief
Operating Officer of the Corporation and elected to the Board of Directors. Mr.
Serra's new role gives him responsibility for the athletic retail business.
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The Company opened 16 stores and remodeled/relocated 23 stores during the
quarter. Additionally, the Company closed 303 stores, of which 291 were
shuttered as a part of the 1999 Restructuring Program. The Company's 2000
capital expenditure program continues to track on schedule. At April 29, 2000
the Company operated 4,403 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, Garden Centers, 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-
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The following adjusted results exclude the disposition and operations of several
businesses, the operations of the accelerated store closings and the 1999
restructuring charges for all periods presented.
VENATOR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - AS ADJUSTED
(In millions, except per share amounts)
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13 Weeks Ended
---------------------------
April 29, May 1,
(unaudited) 2000 1999
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Sales $ 1,072 $ 947
Costs and expenses:
Cost of sales 759 707
Selling, general and administrative 238 193
expenses
Depreciation and amortization 40 41
Interest expense, net 9 11
Other income (10) (6)
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1,036 946
------- -------
Adjusted income from operations before
income taxes 36 1
Income tax expense 13 --
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Adjusted net income from operations $ 23 $ 1
======= =======
Diluted Adjusted Earnings Per Share $ 0.16 $ 0.01
======= =======
Weighted-average common shares
outstanding assuming dilution 138.5 137.3
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SUPPLEMENTAL INFORMATION - AS ADJUSTED
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13 Weeks Ended
---------------------------
April 29, May 1,
(unaudited) 2000 1999
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ADJUSTED SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $ 952 $ 838
Direct to Customer 57 48
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1,009 886
Northern Group 63 61
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Total $ 1,072 $ 947
======= =======
ADJUSTED OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores $ 68 $ 28
Direct to Customer (3) 4
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65 32
Northern Group (9) (10)
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Total $ 56 $ 22
======= =======
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The following are the reported results:
VENATOR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - AS REPORTED
(In millions, except per share amounts)
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(unaudited) 13 Weeks Ended
---------------------------
April 29, May 1,
2000 1999
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Sales $ 1,108 $ 1,079
Costs and expenses:
Cost of sales 787 791
Selling, general and administrative 258 256
expenses
Depreciation and amortization 40 45
Interest expense, net 9 11
Other income (10) (6)
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1,084 1,097
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Income (loss) from continuing
operations before income taxes 24 (18)
Income tax expense (benefit) 9 (7)
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Income (loss) from continuing operations 15 (11)
Cumulative effect of accounting change, net of
income tax expense of $6 -- 8
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Net income (loss) $ 15 $ (3)
======= =======
Diluted Earnings Per Share:
Income (loss) from continuing operations $ 0.11 $ (0.08)
Cumulative effect of accounting change -- 0.06
======= =======
Net income (loss) $ 0.11 $ (0.02)
======= =======
Weighted-average common shares
outstanding assuming dilution 138.5 136.7
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VENATOR GROUP, INC.
SUPPLEMENTAL INFORMATION - AS REPORTED
(In millions)
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13 Weeks Ended
---------------------------
April 29, May 1,
(unaudited) 2000 1999
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SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $ 963 $ 883
Direct to Customer 57 48
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1,020 931
Northern Group 70 69
Other 18 79
======= =======
Total $ 1,108 $ 1,079
======= =======
OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores $ 65 $ 16
Direct to Customer (3) 4
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62 20
Northern Group (14) (17)
Other (4) --
======= =======
Total $ 44 $ 3
======= =======
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VENATOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
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April 29, May 1,
2000 1999
(unaudited) (unaudited)
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 54 $ 13
Restricted cash 90 --
Merchandise inventories 766 889
Net assets of discontinued operations 13 101
Assets held for disposal 47 --
Other current assets 122 205
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1,092 1,208
Property and equipment, net 782 984
Deferred tax assets 315 357
Other assets 294 260
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$2,483 $2,809
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 101 $ 274
Accounts payable 249 276
Accrued liabilities 218 218
Current portion of reserve for
restructuring and discontinued operations 91 135
Current portion of long-term debt and
obligations under capital leases 94 7
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753 910
Long-term debt and
obligations under capital leases 312 513
Other liabilities 276 343
SHAREHOLDERS' EQUITY 1,142 1,043
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$2,483 $2,809
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