Indra Bhattacharjee's Avatar
published in Blogs
May 28, 2019

Shares of Foot Locker (FL, $44.02) plummet after missing Street estimates

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.

Related Tickers: FL
John Jacques's Avatar
published in Blogs
May 16, 2022
A.I. Stock Market Predictions: Head & Shoulders

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Edward Flores's Avatar
published in Blogs
Apr 29, 2022
How to Become the Millionaire Next Door

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Sergey Savastiouk's Avatar
published in Blogs
May 16, 2022
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Sergey Savastiouk's Avatar
published in Blogs
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Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Dmitry Perepelkin's Avatar
published in Blogs
Mar 14, 2023
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Sergey Savastiouk's Avatar
published in Blogs
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Sergey Savastiouk's Avatar
published in Blogs
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Sergey Savastiouk's Avatar
published in Blogs
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Edward Flores's Avatar
published in Blogs
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What's the Difference Between Tokens and Altcoins?

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John Jacques's Avatar
published in Blogs
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