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Here's Why Foot Locker (FL) Stock Appears Promising Now
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Foot Locker, Inc. (FL - Free Report) seems to be a lucrative pick now, thanks to its robust business strategies. Management is focused on reinforcing its digital presence and direct-to-consumer (DTC) operations. FL is effectively managing inventory and improving supply-chain efficiencies to boost growth. Its FLX membership program appears encouraging too.
Impressively, shares of this athletic footwear and apparel company have appreciated 42.8% over the past six months compared with the industry’s 13.4% rise.
Let’s Delve Deeper
Foot Locker has been augmenting its e-commerce platform and tapping into underpenetrated markets for a while. We note that the company remains on track to bolster the omnichannel capabilities by adding new functionalities. The company has activated a Shop My Store feature on its website. Moreover, the company added Apple Pay and Google Pay to digital payment options for providing greater flexibility, as well as convenience to customers. Apart from these, the company is enhancing buy online and pickup in-store capabilities as well as elevating its mobile app experience. During third-quarter fiscal 2022, the company’s digital sales penetration rate was 16.3%, up from 15.3% recorded in fiscal 2019.
Image Source: Zacks Investment Research
In addition, Foot Locker is trying to improve its performance through operational and financial initiatives. FL is focused on boosting customer experience, investing in long-term growth and driving productivity. In this regard, management will accelerate efforts, including greater diversification of merchandise and vendor mix, acceleration of the shift to off-mall and rollout of the important growth banners, advancement of omnichannel endeavors and implementation of the cost-savings program.
International expansion is another catalyst. Management continues to progress with its expansion strategy within Asia. Additionally, Foot Locker is progressing well with the membership program FLX, which inspires customers to remain within the Foot Locker portfolio of banners. The FLX program continues to exhibit momentum and help the company serve customers in an efficient manner. Management remains encouraged to continue refining FLX globally.
Furthermore, Foot Locker’s investments are directed toward community-based power stores in the markets worldwide. Management plans to spend a major portion of the capital on its fleet of stores, including revamping and remodeling the same. During the fiscal third quarter, it opened 24 stores and remodeled or relocated 23 outlets. The company closed 29 stores during the aforementioned period. Management had anticipated opening roughly 20 stores for the fourth quarter of fiscal 2022. It has plans to shut down nearly 85 stores in the aforementioned period. Foot Locker anticipates capEx to be approximately $275 million in capital expenditures for fiscal 2022.
What Else?
Analysts look quite optimistic about the stock. The Zacks Consensus Estimate for earnings per share (EPS) of $4.49 for fiscal 2022 and $4.36 for fiscal 2023 suggests an increase of 6.3% and 4.9%, respectively, over the past 60 days.
Wrapping up, Foot Locker appears to be well-poised well for growth, based on all the aforementioned strengths. An impressive long-term expected earnings growth rate of 32.3% coupled with a VGM Score of B speaks of the inherent potential of this current Zacks Rank #2 (Buy) stock.
Other Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Chico's FAS and Boot Barn (BOOT - Free Report) .
Tecnoglass manufactures and sells architectural glass,windows and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests growth of 19.6% and 127.5%, respectively, from the year-ago reported figures.
Boot Barn, a fashion retailer of apparel and accessories, currently carries a Zacks Rank of 2. The company has a trailing four-quarter earnings surprise of 11.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 11.8% from the year-ago reported figure.
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Here's Why Foot Locker (FL) Stock Appears Promising Now
Foot Locker, Inc. (FL - Free Report) seems to be a lucrative pick now, thanks to its robust business strategies. Management is focused on reinforcing its digital presence and direct-to-consumer (DTC) operations. FL is effectively managing inventory and improving supply-chain efficiencies to boost growth. Its FLX membership program appears encouraging too.
Impressively, shares of this athletic footwear and apparel company have appreciated 42.8% over the past six months compared with the industry’s 13.4% rise.
Let’s Delve Deeper
Foot Locker has been augmenting its e-commerce platform and tapping into underpenetrated markets for a while. We note that the company remains on track to bolster the omnichannel capabilities by adding new functionalities. The company has activated a Shop My Store feature on its website. Moreover, the company added Apple Pay and Google Pay to digital payment options for providing greater flexibility, as well as convenience to customers. Apart from these, the company is enhancing buy online and pickup in-store capabilities as well as elevating its mobile app experience. During third-quarter fiscal 2022, the company’s digital sales penetration rate was 16.3%, up from 15.3% recorded in fiscal 2019.
Image Source: Zacks Investment Research
In addition, Foot Locker is trying to improve its performance through operational and financial initiatives. FL is focused on boosting customer experience, investing in long-term growth and driving productivity. In this regard, management will accelerate efforts, including greater diversification of merchandise and vendor mix, acceleration of the shift to off-mall and rollout of the important growth banners, advancement of omnichannel endeavors and implementation of the cost-savings program.
International expansion is another catalyst. Management continues to progress with its expansion strategy within Asia. Additionally, Foot Locker is progressing well with the membership program FLX, which inspires customers to remain within the Foot Locker portfolio of banners. The FLX program continues to exhibit momentum and help the company serve customers in an efficient manner. Management remains encouraged to continue refining FLX globally.
Furthermore, Foot Locker’s investments are directed toward community-based power stores in the markets worldwide. Management plans to spend a major portion of the capital on its fleet of stores, including revamping and remodeling the same. During the fiscal third quarter, it opened 24 stores and remodeled or relocated 23 outlets. The company closed 29 stores during the aforementioned period. Management had anticipated opening roughly 20 stores for the fourth quarter of fiscal 2022. It has plans to shut down nearly 85 stores in the aforementioned period. Foot Locker anticipates capEx to be approximately $275 million in capital expenditures for fiscal 2022.
What Else?
Analysts look quite optimistic about the stock. The Zacks Consensus Estimate for earnings per share (EPS) of $4.49 for fiscal 2022 and $4.36 for fiscal 2023 suggests an increase of 6.3% and 4.9%, respectively, over the past 60 days.
Wrapping up, Foot Locker appears to be well-poised well for growth, based on all the aforementioned strengths. An impressive long-term expected earnings growth rate of 32.3% coupled with a VGM Score of B speaks of the inherent potential of this current Zacks Rank #2 (Buy) stock.
Other Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Chico's FAS and Boot Barn (BOOT - Free Report) .
Tecnoglass manufactures and sells architectural glass,windows and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests growth of 19.6% and 127.5%, respectively, from the year-ago reported figures.
Boot Barn, a fashion retailer of apparel and accessories, currently carries a Zacks Rank of 2. The company has a trailing four-quarter earnings surprise of 11.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 11.8% from the year-ago reported figure.