Is Foot Locker, Inc. FL part of your portfolio? If not, then this is the right time to add the stock as it looks very promising. Moreover, the underlying factors are capable of carrying the momentum further. The stock carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 12.1%, which highlight its inherent strength. Also, its stock price has surged 18% year to date. We believe that Foot Locker offers a sound investment opportunity.
The company’s stellar performance is backed by effective implementation of its operational and financial initiatives. Management believes that by continually exploiting opportunities like children’s business, shop-in-shop expansion in collaboration with its vendors, store banner.com business, store refurbishment and enhancement of assortments, the company can benefit in the long run. International expansion, especially in Europe, is another growth catalyst. The company is also focused on augmenting its E-commerce platform, growing direct-to-consumer operations, margin expansion and tapping underpenetrated markets.
Foot Locker appears compelling from the earnings perspective, as it continued with its positive earnings surprise streak for the ninth straight quarter. In the trailing four quarters, Foot Locker outperformed the Zacks Consensus Estimate by an average of 11.2%, including a positive surprise of 6.4% in the last concluded quarter.
Solid comparable-store sales growth and cost-containment efforts helped the company to post better-than-expected third-quarter fiscal 2015 results, wherein its earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 94 cents and surged 20% from 83 cents earned in the prior-year quarter. Total sales also increased 3.6% year over year to $1,794 million and outpaced the Zacks Consensus Estimate of $1,782 million. Management now expects to attain double-digit growth in earnings per share in the final quarter.
Following Foot Locker’s sturdy performance and encouraging outlook, the Zacks Consensus Estimate witnessed an uptrend as analysts raised their estimates. Analysts polled by Zacks are convinced about the stock’s upbeat performance. Over the past 30 days, the Zacks Consensus Estimate of $4.26 and $4.74 per share for fiscal 2015 and fiscal 2016 rose 5 cents and 3 cents, respectively. Clearly, a positive sentiment is palpable among analysts covering the stock.
Stocks to Consider
Investors interested in the retail space may also consider other well-ranked stocks such as Abercrombie & Fitch Co. ANF, American Eagle Outfitters, Inc. AEO, both sporting a Zacks Rank #1, and Express Inc. EXPR, carrying a Zacks Rank #2.
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