Foot Locker Is Set to Report Earnings in Tough Week for Retailers

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Nearly three-quarters of Foot Locker’s business is domestic.

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Daniel Pockett/Getty Images

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During a wild week for the market—and retail in particular—there were few havens for investors. Foot Locker was one of them. The question remains whether that holds true when the sneaker seller reports fiscal first-quarter results on Friday morning.

Foot Locker (ticker: FL) is up over 7% in the past five days, and at a recent $30.93, it’s gained nearly 6% since Barron’s recommended it on March 4. By contrast, the S&P 500 has tumbled just under 10% over the same time frame.

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Analysts are still largely wary of the stock, with roughly two-thirds of those tracked by FactSet rating it a Hold or the equivalent. There are five bearish calls on the Street, compared with just three Buy ratings, a rarity as the analyst community tends to lean bullish.

Consensus estimates call for earnings per share of $1.54 on revenue of $2.2 billion. That would mark a slight acceleration on the top line, compared with $2.15 billion in the year ago period, but a decline from EPS $1.96.

Of course, there has been little in the way of guarantees in terms of retailer earnings this week, with big box players like Walmart (WMT) and Target (TGT) warning of shifting consumer appetites—particularly away from discretionary categories—and ongoing supply chain and transportation cost headaches. A downbeat quarter from athletic footwear and apparel maker Under Armour (UAA) was another concern, as are the continuing lockdowns in China that have hurt Nike (NKE) and others.

The good news is that Foot Locker has been actively working to diversify away from Nike,
and nearly three-quarters of its business is domestic. That doesn’t mean that it won’t be impacted by supply chain and freight woes, but it does mean less direct impact to restricted movement in Asia.

Nonetheless the results could shed some light on Nike’s highly anticipated earnings, due out June 30. Given how rapidly the retail landscape has shifted, investors will be eager for any clues.

Write to Teresa Rivas at [email protected]

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Credit: www.marketwatch.com /

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