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Here's Why You Should Hold on to Foot Locker (FL) Stock Now
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Foot Locker, Inc. (FL - Free Report) seems well poised for growth in the future, thanks to its robust business strategies. Management has been effectively managing inventory, improving supply-chain efficiencies and enhancing the omnichannel capabilities for a while. FL’s FLX membership program also appears encouraging. Shares of this athletic footwear and apparel company have gained 25.6% over the past three months against the industry’s 6.9% decline.
Let’s Take a Closer Look
Foot Locker’s digital business is performing well. Management remains committed to the omnichannel progress, including the expansion of its direct-to-consumer (DTC) operations. In second-quarter fiscal 2022, FL’s digital sales penetration rate was 16.9%, up from 14.3% recorded in the same period of fiscal 2019. In the first week of the fiscal third quarter, FL completed the global rollout of the new Foot Locker e-commerce platform via implementations in Singapore and Malaysia.
Management had earlier activated a Shop My Store feature on its website. It also added Apple Pay and Google Pay to digital payment options to provide greater flexibility and convenience to customers. Besides, FL is enhancing its buy online and pickup in-store capabilities, and elevating its mobile app experience.
International expansion is another catalyst. Foot Locker continues to advance with its expansion strategy in Asia by foraying into untapped markets via new licensing arrangements. It is also progressing well with the membership program FLX, inspiring customers to remain within the Foot Locker portfolio of banners.
In the fiscal second quarter, the FLX program continues to exhibit momentum and help Foot Locker serve customers efficiently. On its last earnings call, management informed that FL is steadily capturing above 70% of sales through its members in the United States, up from 50% seen two years ago. Management remains encouraged to continue expanding FLX, globally.
In addition, Foot Locker remains committed to its store-expansion efforts. During the fiscal second quarter, FL opened 34 stores, and remodeled or relocated 24 outlets, while it shuttered 50 stores. FL anticipates its capEx to be approximately $275 million in fiscal 2022 for store openings as well as technology and omni-channel investments. In fiscal 2022, management expects to open roughly 100 stores, including 40 community and power outlets, 20 WSS stores and two atmos stores, and close down nearly 190 stores.
Overall, Foot Locker has been accelerating its efforts, including greater diversification of merchandise, the rollout of its important growth banners, advancement of omnichannel endeavors and implementation of the cost-saving program. FL announced a cost-optimization initiative, which is likely to deliver $200 million of annual savings after being completely executed. An expected long-term earnings growth rate of 32.3% coupled with a Value Score of A speaks volumes for this currently Zacks Rank #3 (Hold) stock.
The Zacks Consensus Estimate for Ulta Beauty’s fiscal 2022 sales suggests growth of 13.7% from the corresponding year-ago level. ULTA has a trailing four-quarter earnings surprise of 32.8%, on average.
Buckle, a leading retailer of apparel, footwear and accessories has a Zacks Rank #2 (Buy) at present. BKE has a trailing four-quarter earnings surprise of 12.7%, on average.
The Zacks Consensus Estimate for Buckle’s fiscal 2022 sales and earnings per share (EPS) suggests growth of 6.8% and 4.5%, respectively, from the year-ago corresponding figures.
Designer Brands, the leading footwear and accessories designer, presently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Designer Brands’ fiscal 2022 sales and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago levels. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.
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Here's Why You Should Hold on to Foot Locker (FL) Stock Now
Foot Locker, Inc. (FL - Free Report) seems well poised for growth in the future, thanks to its robust business strategies. Management has been effectively managing inventory, improving supply-chain efficiencies and enhancing the omnichannel capabilities for a while. FL’s FLX membership program also appears encouraging. Shares of this athletic footwear and apparel company have gained 25.6% over the past three months against the industry’s 6.9% decline.
Let’s Take a Closer Look
Foot Locker’s digital business is performing well. Management remains committed to the omnichannel progress, including the expansion of its direct-to-consumer (DTC) operations. In second-quarter fiscal 2022, FL’s digital sales penetration rate was 16.9%, up from 14.3% recorded in the same period of fiscal 2019. In the first week of the fiscal third quarter, FL completed the global rollout of the new Foot Locker e-commerce platform via implementations in Singapore and Malaysia.
Management had earlier activated a Shop My Store feature on its website. It also added Apple Pay and Google Pay to digital payment options to provide greater flexibility and convenience to customers. Besides, FL is enhancing its buy online and pickup in-store capabilities, and elevating its mobile app experience.
International expansion is another catalyst. Foot Locker continues to advance with its expansion strategy in Asia by foraying into untapped markets via new licensing arrangements. It is also progressing well with the membership program FLX, inspiring customers to remain within the Foot Locker portfolio of banners.
In the fiscal second quarter, the FLX program continues to exhibit momentum and help Foot Locker serve customers efficiently. On its last earnings call, management informed that FL is steadily capturing above 70% of sales through its members in the United States, up from 50% seen two years ago. Management remains encouraged to continue expanding FLX, globally.
In addition, Foot Locker remains committed to its store-expansion efforts. During the fiscal second quarter, FL opened 34 stores, and remodeled or relocated 24 outlets, while it shuttered 50 stores. FL anticipates its capEx to be approximately $275 million in fiscal 2022 for store openings as well as technology and omni-channel investments. In fiscal 2022, management expects to open roughly 100 stores, including 40 community and power outlets, 20 WSS stores and two atmos stores, and close down nearly 190 stores.
Overall, Foot Locker has been accelerating its efforts, including greater diversification of merchandise, the rollout of its important growth banners, advancement of omnichannel endeavors and implementation of the cost-saving program. FL announced a cost-optimization initiative, which is likely to deliver $200 million of annual savings after being completely executed. An expected long-term earnings growth rate of 32.3% coupled with a Value Score of A speaks volumes for this currently Zacks Rank #3 (Hold) stock.
Key Picks in Retail
Some better-ranked stocks are Ulta Beauty (ULTA - Free Report) , Buckle (BKE - Free Report) and Designer Brands (DBI - Free Report) .
Ulta Beauty, the leading beauty retailer, presently 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 Ulta Beauty’s fiscal 2022 sales suggests growth of 13.7% from the corresponding year-ago level. ULTA has a trailing four-quarter earnings surprise of 32.8%, on average.
Buckle, a leading retailer of apparel, footwear and accessories has a Zacks Rank #2 (Buy) at present. BKE has a trailing four-quarter earnings surprise of 12.7%, on average.
The Zacks Consensus Estimate for Buckle’s fiscal 2022 sales and earnings per share (EPS) suggests growth of 6.8% and 4.5%, respectively, from the year-ago corresponding figures.
Designer Brands, the leading footwear and accessories designer, presently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Designer Brands’ fiscal 2022 sales and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago levels. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.