This shoe retailer beat estimates last quarter and 20 analysts have raised their 2016 earnings forecasts for the company.
Foot Locker, Inc. (FL 76)
From Dow Theory Forecasts
In the six weeks leading up to its October-quarter report, Foot Locker’s (FL) stock had dipped on mixed results and guidance from Nike (NKE), Adidas, and Under Armour (UA). But the retailer eased investor concerns by delivering yet another solid quarter and reaffirming its outlook.
Foot Locker grew earnings per share 13% to $1.13 excluding special items, topping the consensus by $0.03. Revenue increased 5% to $1.89 billion, while same-store sales advanced 4.7%. Strong U.S. results offset some weakness in Southern Europe and Germany. Operating profit margin has expanded in 28 straight quarters.
Looking ahead to the January quarter, management said the favorable schedule of product launches should cause same-store sales to rise by mid-single-digits and per-share profits to grow by double-digits, as gross profit margin continues to widen. Shares rallied on the results and currently hover near an all-time high.
Foot Locker is a Buy and a Long-Term Buy.
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, November 28, 2016