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EXHIBIT 99
N E W S R E L E A S E
CONTACT: Peter D. Brown
Assistant Treasurer, Investor Relations
Venator Group, Inc.
(212) 720-4254
VENATOR GROUP REPORTS THIRD QUARTER RESULTS
- ADJUSTED EARNINGS PER SHARE INCREASED 54 PERCENT TO $0.20 -
NEW YORK, NY, November 16, 2000 - Venator Group, Inc. (NYSE: Z) today reported
financial results for its third quarter ended October 28, 2000.
Third Quarter Results
Adjusted net income from operations increased to $27 million, or $0.20 per
share, for the quarter ended October 28, 2000 compared with $17 million, or
$0.13 per share, last year, an increase of 54 percent. There were no real estate
gains included in adjusted net income per share in 2000 versus $0.02 per share
in 1999.
Sales from adjusted operations for the 13 weeks ended October 28, 2000 were
$1,132 million compared with $1,033 million in the year-earlier period,
reflecting a comparable-store increase of 10.2 percent. Excluding the impact of
foreign currency fluctuations, total sales for the 13-week period increased 11.7
percent. Adjusted operating profit for the third quarter of 2000 increased to
$73 million from $47 million for the third quarter of 1999, representing an
increase of 55 percent.
"Our efforts to re-energize the Global Athletic Group remain on track, with both
athletic footwear and athletic apparel contributing to our strong sales
increase," stated Dale W. Hilpert, Venator Group's Chairman and Chief Executive
Officer. "Adjusted third quarter results also reflect continuing gross margin
rate improvements which, as a percentage of sales, increased 260 basis points to
30.4 percent for the quarter. This improvement reflects both a higher margin
rate from merchandise sold and improved leverage on occupancy and buying costs."
Year-to-Date Results
Adjusted net income from operations for the nine months ended October 28, 2000
increased to $62 million, or $0.45 per share, from $25 million, or $0.19 per
share, last year. Included in adjusted net income were real estate gains and
other income of $0.07 per share in 2000 and $0.16 per share in 1999.
For the 39 weeks ended October 28, 2000 sales from adjusted operations rose to
$3,219 million compared with $2,904 million in the year-earlier period,
reflecting a comparable-store increase of 11.3 percent. Adjusted operating
profit for the first nine months of 2000 doubled to $170 million from $85
million for the comparable period of 1999.
Debt, net of cash, of $435 million was reduced by $323 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.
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"The flow through to operating profit from increased sales continued to be
strong in the third quarter and in line with results produced during the first
two quarters of 2000," said Mr. Hilpert. "The strong momentum of our athletic
business and improving industry trends positions us well for the fourth quarter
and 2001. Therefore, we currently remain comfortable that we can earn adjusted
earnings per share in the fourth quarter between $0.35 and $0.38 per share,
within the range of current analysts' estimates. Additionally, our focus on
generating positive cash flow has strengthened our financial position and is
expected to provide greater flexibility for the future."
"During September, our Foot Locker Europe operation opened a new flagship store
on Oxford Street in London," continued Mr. Hilpert. "Results to date from this
16,000 square foot store are very exciting, with initial sales that rival our
New York flagship store on 34th Street."
The Company opened eight stores and remodeled/relocated 26 stores during the
quarter. Additionally, the Company closed 37 stores, of which 17 were shuttered
as a part of the 1999 Restructuring Program. The Company's capital expenditure
program continues to track on schedule. At October 28, 2000 the Company operated
4,314 stores from ongoing operations in 14 countries in North America, Europe
and Australia.
The Company is hosting a live conference call at 10:00 am (ET) on Thursday,
November 16, 2000. This conference call may be accessed live from the Investor
Relations section of the Venator Group website at HTTP://WWW.VENATORGROUP.COM.
The conference call will be available for replay until 5:00 pm on Tuesday,
November 21, 2000.
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, Going To The Game, Randy River,
Weekend Edition, Burger King franchises, Foot Locker Japan, Northern Getaway US
and Northern Elements US. In the third quarter 2000, the Company decided not to
dispose of its Team Edition operations. Accordingly, the as adjusted results of
the Global Athletic Group have been restated for all periods to include their
operations.
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.
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VENATOR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
PERIODS ENDED OCTOBER 28, 2000 AND OCTOBER 30, 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 39 Weeks
-------------------------------- -----------------------------------
Adjusted Adjusted Adjusted Adjusted
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales $ 1,132 $ 1,033 $ 3,219 $ 2,904
Cost of sales 788 746 2,267 2,126
Selling, general and administrative 250 201 722 599
expenses
Depreciation and amortization 40 46 121 129
Interest expense, net 8 17 23 45
Other income -- (5) (16) (36)
------- ------- ------- -------
1,086 1,005 3,117 2,863
------- ------- ------- -------
Income before income taxes 46 28 102 41
Income tax expense 19 11 40 16
------- ------- ------- -------
Net income $ 27 $ 17 $ 62 $ 25
======= ======= ======= =======
Diluted earnings per share $ 0.20 $ 0.13 $ 0.45 $ 0.19
Weighted-average diluted shares outstanding 139.5 138.4 139.0 138.1
</TABLE>
THE FOLLOWING ARE REPORTED RESULTS:
<TABLE>
<CAPTION>
13 Weeks 39 Weeks
----------------------- ------------------------
Reported Reported Reported Reported
2000 1999 2000 1999
======= ======= ======= =======
<S> <C> <C> <C> <C>
Sales $ 1,160 $ 1,178 $ 3,309 $ 3,320
Cost of sales 804 848 2,334 2,430
Selling, general and administrative 264 254 763 758
expenses
Depreciation and amortization 40 47 121 138
Restructuring charge 4 3 4 55
Interest expense, net 8 17 23 45
Other income -- (5) (16) (36)
------- ------- ------- -------
1,120 1,164 3,229 3,390
------- ------- ------- -------
Income (loss) from continuing operations before income
taxes 40 14 80 (70)
Income tax expense (benefit) 15 6 31 (27)
------- ------- ------- -------
Income (loss) from continuing operations 25 8 49 (43)
Discontinued operations, net of income tax -- -- -- 10
Cumulative effect of accounting change, net of income tax -- -- -- 8
------- ------- ------- -------
Net income (loss) $ 25 $ 8 $ 49 $ (25)
======= ======= ======= =======
Diluted earnings per share:
Income (loss) from continuing operations $ 0.18 $ 0.06 $ 0.35 $ (0.31)
Income from discontinued operations -- -- -- 0.07
Cumulative effect of accounting change -- -- -- 0.06
------- ------- ------- -------
Net income (loss) $ 0.18 $ 0.06 $ 0.35 $ (0.18)
======= ======= ======= =======
Weighted-average diluted shares outstanding 139.5 138.4 139.0 137.1
</TABLE>
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VENATOR GROUP, INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
PERIODS ENDED OCTOBER 28, 2000 AND OCTOBER 30, 1999
(In millions)
AS ADJUSTED
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
---------------------------- ----------------------------
Adjusted Adjusted Adjusted Adjusted
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
ADJUSTED SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $ 983 $ 895 $ 2,827 $ 2,543
Direct to Customers 67 53 171 139
------- ------- ------- -------
1,050 948 2,998 2,682
Northern Group 82 85 221 222
------- ------- ------- -------
Total $ 1,132 $ 1,033 $ 3,219 $ 2,904
======= ======= ======= =======
ADJUSTED OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores $ 74 $ 41 $ 189 $ 86
Direct to Customers 3 -- (5) 3
------- ------- ------- -------
77 41 184 89
Northern Group (4) 6 (14) (4)
------- ------- ------- -------
Total $ 73 $ 47 $ 170 $ 85
======= ======= ======= =======
</TABLE>
AS REPORTED
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
---------------------------- ----------------------------
Reported Reported Reported Reported
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
SALES BY SEGMENT:
Global Athletic Group:
Retail Stores $ 988 $ 948 $ 2,850 $ 2,686
Direct to Customers 67 53 171 139
------- ------- ------- -------
1,055 1,001 3,021 2,825
Northern Group 82 97 228 252
Other 23 80 60 243
------- ------- ------- -------
Total $ 1,160 $ 1,178 $ 3,309 $ 3,320
======= ======= ======= =======
OPERATING RESULTS BY SEGMENT:
Global Athletic Group:
Retail Stores (1) $ 74 $ 35 $ 187 $ (7)
Direct to Customers 3 -- (5) 3
------- ------- ------- -------
77 35 182 (4)
Northern Group(2) (4) 1 (20) (21)
Other(3) (6) (4) (19) (2)
------- ------- ------- -------
Total $ 67 $ 32 $ 143 $ (27)
======= ======= ======= =======
</TABLE>
(1) 2000 39 week period includes restructuring charge reversal of $1 million.
1999 39 week period includes restructuring charge of $64 million.
(2) 2000 39 week period includes restructuring charge of $1 million.
(3) 2000 13 and 39 week periods include restructuring charges of $4 million and
$9 million, respectively.
Both 1999 periods include restructuring charge of $3 million.
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VENATOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
October 28, October 30,
2000 1999
------ ------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 18 $ 63
Merchandise inventories 922 863
Net assets of discontinued operations 9 85
Assets held for disposal 54 179
Other current assets 126 168
------ ------
1,129 1,358
Property and equipment, net 740 882
Deferred tax assets 312 354
Other assets 292 249
------ ------
$2,473 $2,843
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 140 $ 300
Accounts payable 299 354
Accrued liabilities 299 324
Current portion of long-term debt and
obligations under capital leases 54 208
------ ------
792 1,186
Long-term debt and obligations under capital
leases 259 313
Other liabilities 263 323
SHAREHOLDERS' EQUITY 1,159 1,021
------ ------
$2,473 $2,843
====== ======
</TABLE>
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