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Will Foot Locker's (FL) Efforts Help Lift Its Q2 Earnings?
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Foot Locker, Inc. (FL - Free Report) is slated to release second-quarter fiscal 2018 results on Aug 24. Well the obvious question that comes to mind is whether this retailer of athletic shoes and apparel will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing three quarters, the company has outperformed the Zacks Consensus Estimate.
The Zacks Consensus Estimate for the quarter under review has increased by a penny in the past 30 days and is pegged at 71 cents. This reflects an increase of roughly 14.5% from the year ago period. Let’s analyze the factors influencing the company’s performance.
Factors at Play
Foot Locker is trying to improve performance through operational and financial initiatives. The company is focusing on development of supply chain, improvement of mobile and web platforms, implementation of new point-of-sale software worldwide, and expansion of data analytics capabilities.
Analysts polled by Zacks expect second-quarter revenue to come in at $1,764 million, up 3.7% year over year. This follows an increase of 1.2% witnessed in the first quarter. Management had earlier guided that comparable-store sales (comps) during the second quarter are likely to be flat to up marginally. Comps fell 2.8% during the first quarter of fiscal 2018.
The company also plans to spend a major portion of the capital on its fleet of stores, including revamping and remodeling of the same. Further, it is exploring off-mall retail formats opportunities and executing shop-in-shop spaces in collaboration with vendors.
However, higher SG&A expenses and challenging European business owing to promotional environment are concerns. Foot Locker had earlier forecast SG&A expense to increase as a percentage of sales by 110-140 basis points during the second quarter. The increase is due to higher digital investments.
Foot Locker, Inc. Price, Consensus and EPS Surprise
Our proven model shows that Foot Locker is likely to beat estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Foot Locker has a Zacks Rank #2 and an Earnings ESP of +3.55%. This makes us reasonably confident of an earnings beat.
3 More Stocks Poised to Beat Earnings Estimates
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post earnings beat.
Kohl's Corporation (KSS - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #2.
Ross Stores (ROST - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3.
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Will Foot Locker's (FL) Efforts Help Lift Its Q2 Earnings?
Foot Locker, Inc. (FL - Free Report) is slated to release second-quarter fiscal 2018 results on Aug 24. Well the obvious question that comes to mind is whether this retailer of athletic shoes and apparel will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing three quarters, the company has outperformed the Zacks Consensus Estimate.
The Zacks Consensus Estimate for the quarter under review has increased by a penny in the past 30 days and is pegged at 71 cents. This reflects an increase of roughly 14.5% from the year ago period. Let’s analyze the factors influencing the company’s performance.
Factors at Play
Foot Locker is trying to improve performance through operational and financial initiatives. The company is focusing on development of supply chain, improvement of mobile and web platforms, implementation of new point-of-sale software worldwide, and expansion of data analytics capabilities.
Analysts polled by Zacks expect second-quarter revenue to come in at $1,764 million, up 3.7% year over year. This follows an increase of 1.2% witnessed in the first quarter. Management had earlier guided that comparable-store sales (comps) during the second quarter are likely to be flat to up marginally. Comps fell 2.8% during the first quarter of fiscal 2018.
The company also plans to spend a major portion of the capital on its fleet of stores, including revamping and remodeling of the same. Further, it is exploring off-mall retail formats opportunities and executing shop-in-shop spaces in collaboration with vendors.
However, higher SG&A expenses and challenging European business owing to promotional environment are concerns. Foot Locker had earlier forecast SG&A expense to increase as a percentage of sales by 110-140 basis points during the second quarter. The increase is due to higher digital investments.
Foot Locker, Inc. Price, Consensus and EPS Surprise
Foot Locker, Inc. Price, Consensus and EPS Surprise | Foot Locker, Inc. Quote
What the Zacks Model Unveils?
Our proven model shows that Foot Locker is likely to beat estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Foot Locker has a Zacks Rank #2 and an Earnings ESP of +3.55%. This makes us reasonably confident of an earnings beat.
3 More Stocks Poised to Beat Earnings Estimates
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post earnings beat.
Best Buy (BBY - Free Report) has an Earnings ESP of +1.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kohl's Corporation (KSS - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #2.
Ross Stores (ROST - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>