Shares of the American sportswear and footwear retailer, Foot Locker, plunged more than 16% on Friday after the shoe retailer reported fiscal first-quarter earnings that missed Wall Street profit and revenue estimates.
Company’s adjusted earnings per share for Q1 stood at $1.53 compared to Wall Street’s estimate of $1.60. While the revenue for the quarter stood at $2.08 billion against the expectation of $2.11 billion, despite the net sales increasing by 2.62% during the quarter.
On an unadjusted basis, Foot Locker reported fiscal first-quarter net income of $172 million, or $1.52 per share, up from $165 million, or $1.38 per share a year earlier.
The main reason for such an unsatisfactory performance of the company is its excessive dependence on major shoe companies like Nike (NKE) who are increasingly bypassing the retailers by directly selling its product to their customers. According to analysts, Foot Locker is excessively dependant on Nike for its sales as the manufacturer accounted for nearly 66% of its sales in fiscal 2018.
The overall situation further worsened as more and more shoppers continued avoiding the retailer, majority of Foot Lockers stores are located in malls, for online shopping.
During the quarter the company also undertook the repurchase of 32,100 shares worth $1.8 million, but which again fell short of the analyst expectations.
With the broader shoe industry facing its own set of challenges, as President Trump has threatened to levy more tariffs on footwear imported from China, the shoe retailers are set for a tough time ahead.
Taking into count the overall situation the company said it now expects its earnings per share to be “up high-single digits” for the year, rather than double-digit growth.
FL moved above its 50-day moving average on February 08, 2024 date and that indicates a change from a downward trend to an upward trend. In of 44 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on February 06, 2024. You may want to consider a long position or call options on FL as a result. In of 103 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for FL just turned positive on February 09, 2024. Looking at past instances where FL's MACD turned positive, the stock continued to rise in of 43 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for FL crossed bullishly above the 50-day moving average on February 14, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where FL advanced for three days, in of 312 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 221 cases where FL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for FL moved out of overbought territory on February 28, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 33 similar instances where the indicator moved out of overbought territory. In of the 33 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 13 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
FL broke above its upper Bollinger Band on February 20, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.017) is normal, around the industry mean (4.009). P/E Ratio (39.770) is within average values for comparable stocks, (103.009). FL's Projected Growth (PEG Ratio) (0.000) is very low in comparison to the industry average of (1.330). Dividend Yield (0.035) settles around the average of (0.030) among similar stocks. P/S Ratio (0.404) is also within normal values, averaging (2.052).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. FL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a company which sells athletic footwear and apparels
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A.I.dvisor indicates that over the last year, FL has been loosely correlated with DBI. These tickers have moved in lockstep 53% of the time. This A.I.-generated data suggests there is some statistical probability that if FL jumps, then DBI could also see price increases.