In an effort to enhance shareholder value and sustain robust level of investment to achieve long-term goal, the retailer of athletic shoes and apparel Foot Locker, Inc. (FL - Free Report) has approved three capital allocation initiatives.
Firstly, the company’s board of directors have declared a dividend hike in an attempt to bring investor focus back to the stock, which has witnessed a decline of 1.4% in the past three months, underperforming the Retail-Wholesale sector which has gained 3.6%. The company raised its quarterly dividend by 13% to 31 cents (or $1.24 annually) from 27.5 cents a share (or $1.1 annually). The increased dividend will be paid on Apr 28, 2016, to stockholders on record as of Apr 13. The dividend yield based on the new payout and the last closing market price is approximately 1.8%.
Secondly, the Board has also approved a fresh share repurchase program for three years, under which the company can repurchase shares worth $1.2 billion, replacing the earlier program of $1 billion. At the end of 2016, the company has repurchased $795 million of shares under the previous program since its announcement two year back.
Thirdly, for 2017, the board of directors has sanctioned $277 million capital expenditure program. In 2016, the company had invested $284 million. Foot Locker stated that the company will keep on spending capital to build on its key strategic initiatives. The company’s strategic initiatives include expansion of foot print in major cities globally, remodelling existing store fleet, building robust capabilities in direct-to-customer unit and upgrading technology as well as supply chain infrastructure.
However, fashion obsolescence, foreign currency headwinds, a competitive retail landscape and cautious consumer spending continue to pose concerns for this Zacks Rank #4 (Sell) company.
Stocks to Consider
Better-ranked stocks worth considering in the retail sector include The Children's Place, Inc. (PLCE - Free Report) , Genesco Inc. (GCO - Free Report) and Zumiez Inc. (ZUMZ - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place has an impressive long-term earnings growth rate of 10.3%. Moreover, the company has recorded earnings beat in the trailing four quarters, with an average surprise of 36.3%.
Genesco has a long-term earnings growth rate of 9.5%.
Zumiez has an impressive long-term earnings growth rate of 15%.
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In an effort to enhance shareholder value and sustain robust level of investment to achieve long-term goal, the retailer of athletic shoes and apparel Foot Locker, Inc. (FL - Free Report) has approved three capital allocation initiatives.
Firstly, the company’s board of directors have declared a dividend hike in an attempt to bring investor focus back to the stock, which has witnessed a decline of 1.4% in the past three months, underperforming the Retail-Wholesale sector which has gained 3.6%. The company raised its quarterly dividend by 13% to 31 cents (or $1.24 annually) from 27.5 cents a share (or $1.1 annually). The increased dividend will be paid on Apr 28, 2016, to stockholders on record as of Apr 13. The dividend yield based on the new payout and the last closing market price is approximately 1.8%.
Secondly, the Board has also approved a fresh share repurchase program for three years, under which the company can repurchase shares worth $1.2 billion, replacing the earlier program of $1 billion. At the end of 2016, the company has repurchased $795 million of shares under the previous program since its announcement two year back.
Thirdly, for 2017, the board of directors has sanctioned $277 million capital expenditure program. In 2016, the company had invested $284 million. Foot Locker stated that the company will keep on spending capital to build on its key strategic initiatives. The company’s strategic initiatives include expansion of foot print in major cities globally, remodelling existing store fleet, building robust capabilities in direct-to-customer unit and upgrading technology as well as supply chain infrastructure.
However, fashion obsolescence, foreign currency headwinds, a competitive retail landscape and cautious consumer spending continue to pose concerns for this Zacks Rank #4 (Sell) company.
Stocks to Consider
Better-ranked stocks worth considering in the retail sector include The Children's Place, Inc. (PLCE - Free Report) , Genesco Inc. (GCO - Free Report) and Zumiez Inc. (ZUMZ - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place has an impressive long-term earnings growth rate of 10.3%. Moreover, the company has recorded earnings beat in the trailing four quarters, with an average surprise of 36.3%.
Genesco has a long-term earnings growth rate of 9.5%.
Zumiez has an impressive long-term earnings growth rate of 15%.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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