Foot Locker, Inc. (FL Quick QuoteFL - Free Report) appears good on the back of its robust business strategies and sound fundamentals. FL is trying to improve its performance through its operational and financial initiatives. Prudent inventory-management strategies and efforts to enhance assortments are helping FL meet customer demand effectively. We note that FL is on track to convert its Footaction stores into other existing banner concepts to fuel growth.

Shares of this New York-based retailer have increased 5.7% in a year against the industry’s 15.2% decline. This stock is further backed by sturdy earnings estimate revisions. The Zacks Consensus Estimate for earnings currently stands at $7.51 for fiscal 2021, indicating growth of 4% in the past 30 days. In fact, the Zacks Consensus Estimate for FL’s current financial-year sales and earnings per share suggests growth of 18.4% and 167.3%, respectively, from the prior year’s corresponding figures.

Let’s Delve Deeper

Foot Locker constantly makes solid efforts to strengthen its product assortments. Recently, management announced the launch of FL’s first proprietary womenswear brand Cozi, designed to offer a trendy collection at affordable prices. The latest brand follows the successful launch of LCKR, and capsule collections by Melody Ehsani and Don C.

This holiday season, the Cozi collection is available globally in-store and online at Foot Locker, Foot Locker Canada, Foot Locker Europe and Champs Sports. The collection, ranging between $35 and $50, offers exclusive styles and colors available at select locations.

Nearly a couple of months ago, Foot Locker launched its private label apparel line LCKR. The line’s initial collection was introduced to FL stores and online with more collections set to release ahead. Management is focused on expanding the collection into Canada.

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Management continues to progress well with its membership program FLX that inspires customers to remain in the Foot Locker portfolio of banners. At the end of the third quarter of fiscal 2021, FLX program members exceeded 28 million, including more than 3 million joining in the reported quarter. Management remains encouraged to continue refining FLX, globally.

Foot Locker has also been making prudent and strategic agreements to enhance its footprint for a while. Management completed the acquisition of the U.S.-based footwear and apparel retailer Eurostar, Inc. (WSS) for $750 million. It also concluded the buyout of atmos, a Japan-based digitally-led global retailer. Through this acquisition, Foot Locker will be able to enhance its global footprint in the Asia-Pacific market and establish a critical entry point in Japan. Management is quite impressed with atmos' innovative offerings and understanding of sneakerhead culture.

International expansion is another catalyst. Management continues to progress with its expansion strategy within Asia. Coming to store-growth endeavors, Foot Locker trasnsformed 18 locations while nine are under construction. More than half of these stores are being rebranded as Foot Locker. About 40% is Champs Sports while the rest 10% represents Kids Foot Locker. FL is experiencing higher productivity gains from these stores exceeding expectations.

What’s More?

Despite the aforesaid tailwinds, Foot Locker remains prone to industry-wide supply-chain issues, including port congestions and factory shutdowns. Also, pandemic-related temporary closures across certain markets where the company operates might act as headwinds. Higher freight expenses are added deterrents.

Nevertheless, management is steadily taking initiatives to maneuver through pandemic-induced challenges. Foot Locker expects to keep gaining from robust consumer demand and inventory levels, keeping it well-equipped for the holiday season. For fiscal 2021, management expects to deliver sales growth in the high-teens bracket, with comp sales in mid-teens. Adjusted earnings are envisioned in the bracket of $7.53-$7.60 per share, indicating growth from $2.81 earned last fiscal year. The stock currently has a Zacks Rank #3 (Hold).

Key Picks in Retail

Some better-ranked stocks are Boot Barn Holdings (BOOT Quick QuoteBOOT - Free Report) , Home Depot (HD Quick QuoteHD - Free Report) and Tractor Supply Company (TSCO Quick QuoteTSCO - Free Report) .

Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy) at present. The stock has jumped 166.7% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period’s corresponding figures. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average.

Home Depot, a renowned home-improvement retailer, presently carries a Zacks Rank #2 (Buy). HD has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has rallied 49% in the year-to-date period.

The Zacks Consensus Estimate for Home Depot’s current-year sales and EPS suggests growth of 13.6% and 28.7%, respectively, from the corresponding year-ago levels. HD has an expected EPS growth rate of 12.6% for three-five years.

Tractor Supply Company, a rural lifestyle retailer in the United States, currently has a Zacks Rank of 2. TSCO has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of TSCO have surged 61.7% year to date.

The Zacks Consensus Estimate for Tractor Supply Company’s current-year sales and EPS suggests growth of 19% and 23.9%, respectively, from the year-ago corresponding readings. TSCO has an expected EPS growth rate of 10.2% for three-five years.