New York-based footwear and athletic apparel retailer Foot Locker, Inc. announced its capital allocation program for 2021 on Wednesday, revealing plans to invest $275 million over the course of the year, compared to approximately $155 million in 2020.
According to the company, the plans signal a return to pre-Covid levels of investment, progress which will help the business as it works to achieve its long-term strategic imperatives.
A large part of the funds will be put towards improving Foot Locker’s digital capabilities and infrastructure and enhancing the digital customer experience. Streamlining its business’ global supply chain is also a major focus of the company’s investment projects.
Other areas in which the group plans to invest this year include the acceleration of the rollout of community-based off-mall stores in markets around the world and the elevation of the customer experience in core stores.
In addition, Foot Locker announced that as well as approving the capital allocation program for 2020, the company’s board of directors has declared a quarterly cash dividend on the company’s common stock of $0.20 per share. This represents a 33% increase from the previous dividend of $0.15 per share.
“These actions demonstrate our Board of Directors’ confidence in resuming higher levels of investment into the business as we continue to build our strategic omnichannel position at the center of youth culture, while also returning more cash to shareholders through a significant dividend increase,” said Foot Locker Chairman and CEO Richard Johnson in a release.
“Of course, given the lingering unknowns of the ongoing pandemic, we will retain flexibility and discipline with respect to our capital deployment,” he added.
In the nine months ended October 31, 2020, Foot Locker posted net income of $200 million, or $1.91 per share, on sales of $5.36 billion, which fell 7.3% compared to $5.78 billion in the same period in the previous year.
Following a difficult first half of the year, the company’s third-quarter began to show signs of recovery, with net income rising from $125 million in the prior-year period to $265 million. Quarterly sales increased 9.0% year over year, from $1.93 billion to $2.11 billion.
The company, which currently operates approximately 3,000 stores in 28 countries, intends to report its fourth-quarter and full-year financial results on Friday, February 26, 2021.