Shares of Foot Locker, Inc. (FL - Free Report) touched a 52-week high of $61.36, before closing the session a tad lower at $60.01 on Feb 21. The upside in the price performance can be attributed to the recently announced capital spending plans.
Recently, Foot Locker rewarded shareholders with a hike of 10% in quarterly dividend. Also, the company revealed a capital expenditure program of $275 million for fiscal 2019, up from $200 million assigned for the prior year’s program. Moreover, the board announced a new 3-year share buyback program worth $1.2 billion.
Apart from these, focus on supply chain development, improvement of mobile and web platforms, execution of new point-of-sale software as well as data analytics growth bode well. Also, the company boasts a strong portfolio of leading brands under a variety of store banners that enables it to target specific markets and efficiently cater to consumers’ demand.
Clearly, these tailwinds have lifted the investors’ optimism in the stock. In the past three months, this Zacks Rank #2 (Buy) stock has gained 13.3%, against the industry’s decline of 7.8%. Further, the company has a Value Score of A, which indicates that Foot Locker has more room to run.
Foot Locker is trying to improve performance through operational and financial initiatives. Management expects to benefit by consistently capitalizing on opportunities like kids’ and women’s business, shop-in-shop expansion in collaboration with vendors, store banner.com business, store refurbishment and enhancement of assortments. Also, the company has undertaken initiatives like better price, omni-channel capabilities and unique products to stay competitive.
Furthermore, international expansion, especially in Europe, is another growth catalyst. The company is focusing on augmenting e-commerce platform, expanding direct-to-consumer operations, driving margin, tapping underpenetrated markets and opening Power Stores.
We believe that such efforts will continue to driving the company’s performance and maintain its position in the good books of investors.
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