Venator Group Inc., which owns Foot Locker and other sporting goods retailers, rebounded to profitability in the quarter ended April 29 amid rising sales of clothes and sneakers.
The New York-based company, formerly named Woolworth Corp., posted net income of $15 million in its fiscal first quarter, compared with a loss of $3 million a year earlier. Sales rose to $1.07 billion from $947 million, adjusted for store closings and other restructurings.
"It looks like maybe they've finally turned it around," said Sally Schaadt, an analyst at Fourteen Research Corp., a stock research firm in New York. "I think the cycle may be back in favor for shoes, and apparel sales are better, too."
Just two years ago, the company lost $136 million amid slumping demand for athletic shoes and apparel.
Venator closed 303 stores in the latest quarter as part of its program to eliminate excess capacity. It also has stopped selling some shoes and clothes that were unpopular, Schaadt said. "They've tried to tighten up and concentrate on what is best within each group" of sneakers and clothes, she said.
The company's profit growth is likely to continue, Schaadt said. She predicted earnings per share of 65 to 70 cents for the year ending Jan. 31, 2001, compared with 30 cents a year earlier. She rates the stock "attractive to accumulate," which is between "hold" and "buy." The difficult environment for retailers keeps her from ranking Venator higher, Schaadt said.
In addition to Foot Locker, the company owns Champs Sports.
