The company indicated that comparable-store sales in Q2/19 increased 0.80% over Q2/18. Total Q2/19 sales decreased 0.40% to $1,774 million, compared to $1,782 million for Q2/18. Excluding the effect of foreign exchange rate fluctuations, total sales for the Q2/19 increased 0.80%. The company's gross margin rate decreased to 30.1% from 30.2% a year ago. SG&A expense rate increased to 22.2% from 21.3% in Q2/19, largely reflecting the ongoing investments the company is making in its digital capabilities and infrastructure.
The company reported that net income for Q2/19 was $60 million, or $0.55 per share, compared to$88 million, or $0.75 per share in Q2/18. Included in the Q2/19 results are a $13 million charge related to the lease termination costs incurred in connection with the closure of certain SIX: 02 locations, a $1 million charge recorded in connection with the firm's pension matter, and a $2 million tax charge in connection with U.S. tax reform. Excluding these items, non-GAAP earnings were $72 million, or $0.66 per share for Q2/19 versus $0.75 per share in Q2/18.
Net income for H2/19 decreased to $232 million, or $2.08 per share on a GAAP basis, compared to $253million, or $2.14 per share for H2/18. On a non-GAAP basis, earnings per share for H2/19 totaled $2.20, compared to $2.21 per share in H1/18. Year-to-date sales in H2/19 were $3,852 million, an increase of 1.2% compared to $3,807 million in H1/18. Year-to-date, comparable store sales in H2/19 increased 2.8%, while total year-to-date sales, excluding the effect of foreign currency fluctuations, increased by 2.9%.
Richard Johnson, president and CEO of the company commented, "While our results in the second quarter did come in at the low end of our expectations, we saw improvement in our performance as we moved through each month of the quarter...We remain deeply connected with sneaker and youth culture, and believe this positive momentum exiting the quarter has us well positioned for the back-to-school period and beyond. Further, our team continues to make meaningful progress against our long-term strategic imperatives."
The company provided a store base update indicating that during Q2/19, the company opened 10 new stores, remodeled or relocated 35 stores, and closed 37stores, and as of August 3, 2019 operated 3,174 stores in 27 countries. Additionally, 123 franchised Foot Locker stores were operating in the Middle East, as well as 10 franchised Runners Point stores in Germany.
As of August 3, 2019, the company's merchandise inventories were $1,227 million, 2.2% lower than at the end of the second quarter last year. Using constant currencies, inventory decreased 1.0%. Lauren Peters, the company's EVP and CFO stated, "In addition to making meaningful investments in our stores and digital capabilities during the quarter, we maintained our disciplined approach to inventory management and are set-up to continue flowing fresh, exciting product offerings for the back-half of 2019...We remain optimistic that we can deliver a mid-single digit comparable sales gain for the full year and high-single digit adjusted EPS growth."
Headquartered in New York City, Foot Locker describes itself as a leading global retailer of athletically inspired shoes and apparel. The company operates approximately 3,200 athletic retail stores in 27 countries, as well as websites and mobile apps, under the brand names Foot Locker, Champs Sports, Eastbay, Kids Foot Locker, Footaction, Lady Foot Locker, Runners Point and Sidestep. With its various marketing channels and experiences across North America, Europe, Asia, Australia and New Zealand, the company's purpose is to inspire and empower youth culture around the world, by fueling a shared passion for self-expression and creating unrivaled experiences at the heart of the sport and sneaker communities.
Foot Locket shares opened lower today on the news at $37.01 (-$4.92, -11.73%) compared to the prior day's close of $41.93. This morning in greater than five-times average daily volume the stock slid to a 52-week low intraday price trading between $34.41 and $38.15/share, and closed at $34.00 (-$7.93, -18.91%).[NLINSERT]
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