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Why Foot Locker's (FL) Q2 Earnings Are Likely to Rise Y/Y
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Foot Locker, Inc. (FL - Free Report) is slated to release second-quarter fiscal 2020 results on Aug 21, before market open. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 69 cents, improving from a loss of 62 cents seven days ago. The consensus mark also suggests growth of more than 4% from the prior-year quarter’s tally. Further, the consensus mark for quarterly revenues stands at $1,982 million, indicating an improvement of over 11% from the year-ago quarter.
However, the athletic shoes and apparel retailer has a trailing four-quarter negative earnings surprise of 71.3%, on average.
Key Factors to Note
In a recent update on second-quarter fiscal 2020, management highlighted the huge response to the company’s assortment as stores started reopening. This could be attributed to pent-up demand and the effect of the fiscal stimulus that aided in-store sales and drove continued momentum across the digital channel. Notably, comparable-store sales jumped nearly 18% for second-quarter fiscal 2020.
Management further cited that significant sales coupled with disciplined cost control aided the company to revert to positive earnings per share despite gross margin being stressed by a channel mix shift and elevated promotional backdrop. Apparently, management envisions adjusted earnings per share in the range of 66-70 cents for the quarter ended Aug 1.
Including pre-tax charges of about $19 million associated with winding down of the Runners Point banner and the restructuring of Eastbay, as well as costs of $18 million incurred for the social unrest, earnings per share are likely to fall in the band of 38-42 cents per share compared with 55 cents recorded in the year-ago period.
Meanwhile, Foot Locker’s focus on development of its supply chain, improvement of mobile and web platforms and expansion of data-analytics capabilities are worth mentioning. Aforementioned factors, along with the strength in its brands, are likely to have boosted Foot Locker’s performance in the quarter to be reported.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Foot Locker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. 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 #3 but an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are a few companies worth considering from the same sector as our model shows that these have the right combination of elements to beat on earnings:
Big Lots (BIG - Free Report) currently has an Earnings ESP of +5.04% and a Zacks Rank #3.
Lowe's (LOW - Free Report) has an Earnings ESP of +4.41% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Why Foot Locker's (FL) Q2 Earnings Are Likely to Rise Y/Y
Foot Locker, Inc. (FL - Free Report) is slated to release second-quarter fiscal 2020 results on Aug 21, before market open. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 69 cents, improving from a loss of 62 cents seven days ago. The consensus mark also suggests growth of more than 4% from the prior-year quarter’s tally. Further, the consensus mark for quarterly revenues stands at $1,982 million, indicating an improvement of over 11% from the year-ago quarter.
However, the athletic shoes and apparel retailer has a trailing four-quarter negative earnings surprise of 71.3%, on average.
Key Factors to Note
In a recent update on second-quarter fiscal 2020, management highlighted the huge response to the company’s assortment as stores started reopening. This could be attributed to pent-up demand and the effect of the fiscal stimulus that aided in-store sales and drove continued momentum across the digital channel. Notably, comparable-store sales jumped nearly 18% for second-quarter fiscal 2020.
Management further cited that significant sales coupled with disciplined cost control aided the company to revert to positive earnings per share despite gross margin being stressed by a channel mix shift and elevated promotional backdrop. Apparently, management envisions adjusted earnings per share in the range of 66-70 cents for the quarter ended Aug 1.
Including pre-tax charges of about $19 million associated with winding down of the Runners Point banner and the restructuring of Eastbay, as well as costs of $18 million incurred for the social unrest, earnings per share are likely to fall in the band of 38-42 cents per share compared with 55 cents recorded in the year-ago period.
Meanwhile, Foot Locker’s focus on development of its supply chain, improvement of mobile and web platforms and expansion of data-analytics capabilities are worth mentioning. Aforementioned factors, along with the strength in its brands, are likely to have boosted Foot Locker’s performance in the quarter to be reported.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Foot Locker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Foot Locker, Inc. Price and EPS Surprise
Foot Locker, Inc. price-eps-surprise | Foot Locker, Inc. Quote
Foot Locker has a Zacks Rank #3 but an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are a few companies worth considering from the same sector as our model shows that these have the right combination of elements to beat on earnings:
Dollar General (DG - Free Report) presently has an Earnings ESP of +6.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots (BIG - Free Report) currently has an Earnings ESP of +5.04% and a Zacks Rank #3.
Lowe's (LOW - Free Report) has an Earnings ESP of +4.41% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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