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Foot Locker (FL)
NYSE:FL
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Foot Locker
(NYSE:FL)
55Neutral
Positive Factors
Brand growth
Strong growth from Footlocker's portfolio brands like Adidas, New Balance, ASICS, On, HOKA, UGG, and Timberland is encouraging.
Digital enhancements
The new mobile app launch in November boosted digital comps by 12.4% and increased digital penetration by 230bps to 21.8%, showing strong traction.
Partnership
The partnership between Nike and Footlocker, with initiatives like 'Home Court' and 'The Clinic' experiences, is seen as encouraging.
Negative Factors
Consumer environment
Management acknowledged an environment that has become increasingly challenging, as the company works through the coalescing headwinds of a more selective consumer and Nike's marketplace reset.
Earnings guidance
The uncertain consumer environment is leading to lower-than-expected earnings guidance for the first half of the year, although a recovery is expected in the second half.
Inventory and markdowns
Nike's continued inventory clearance and higher markdowns could negatively impact Footlocker's short-term performance.
Foot Locker (FL) vs. S&P 500 (SPY)
Market Cap
$1.53B
Dividend YieldN/A
Average Volume (3M)4.25M
Price to Earnings (P/E)131.4
Beta (1Y)1.53
Revenue Growth-2.20%
EPS GrowthN/A
CountryUS
Employees14,335
SectorConsumer Cyclical
Sector Strength48
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.12
Shares Outstanding94,888,860
10 Day Avg. Volume4,352,612
30 Day Avg. Volume4,254,287
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.19
Price to Cash Flow (P/CF)-13.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.27Price Target Upside26.45% Upside
Rating ConsensusHold
Number of Analyst Covering16
Foot Locker Business Overview & Revenue Model
Company DescriptionFoot Locker, Inc., through its subsidiaries, operates as an athletic footwear and apparel retailer. The company engages in the retail of athletic footwear, apparel, accessories, equipment, and team licensed merchandise under the Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, atmos, WSS, Footaction, and Sidestep brand names. As of January 29, 2022, it operated 2,858 retail stores in 28 countries across the United States, Canada, Europe, Australia, New Zealand, and Asia; and 142 franchised Foot Locker stores located in the Middle East and Asia. The company also offers its products through various e-commerce sites and mobile apps. Foot Locker, Inc. was founded in 1879 and is headquartered in New York, New York.
How the Company Makes MoneyFoot Locker makes money primarily through the sale of athletic footwear and apparel. The company's revenue model is based on retail sales across its physical stores and online platforms. Key revenue streams include direct sales from its branded stores and e-commerce websites. Foot Locker also benefits from strategic partnerships with major sportswear brands, which allow them to offer exclusive products and limited-edition releases that drive consumer demand. Additionally, the company leverages its global presence to capitalize on emerging markets and expand its customer base, contributing to its overall earnings.
Foot Locker Financial Statement Overview
Summary
Foot Locker's financial performance reflects challenges with a negative net income and profitability hurdles, alongside a high debt-to-equity ratio. However, slight improvements in cash flow provide some liquidity, though overall financial health remains strained.Income Statement
Foot Locker's income statement reflects significant challenges, with a negative net income of -$426 million for TTM, resulting in a concerning net profit margin of -5.24%. The revenue has decreased from $8.758 billion in 2023 to $8.124 billion TTM, indicating a negative revenue growth rate. The gross profit margin stands at 26.96%, which shows decent margin retention amidst declining revenues. However, the EBITDA margin is negative, highlighting underlying operational inefficiencies.40
Negative
Balance Sheet
The balance sheet presents a mixed picture with a relatively high debt-to-equity ratio of 0.99, indicating significant leverage. Stockholders' equity has decreased to $2.868 billion, impacting the equity ratio, which stands at 41.81%. Despite these challenges, Foot Locker maintains a moderate level of cash and cash equivalents, providing some liquidity cushion.55
Neutral
Cash Flow
Cash flow analysis shows that Foot Locker's free cash flow has improved to $25 million TTM from a negative -$151 million in 2024, but remains weak overall. The operating cash flow to net income ratio is unfavorable due to negative net income, complicating cash flow sustainability. Free cash flow to net income ratio is also constrained by the negative net income.45
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.12B | 8.17B | 8.76B | 8.96B | 7.55B | 8.01B | Gross Profit |
| 2.19B | 2.27B | 2.80B | 3.08B | 2.18B | 2.54B | EBIT |
| 89.00M | 142.00M | 581.00M | 1.43B | 537.00M | 659.00M | EBITDA |
| -319.00M | -200.00M | 859.00M | 1.25B | 606.00M | 892.00M | Net Income Common Stockholders |
| -426.00M | -330.00M | 342.00M | 893.00M | 323.00M | 491.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 891.00M | 297.00M | 536.00M | 804.00M | 1.68B | 907.00M | Total Assets |
| 3.83B | 6.87B | 7.91B | 8.14B | 7.04B | 6.60B | Total Debt |
| 124.00M | 2.94B | 3.23B | 3.39B | 3.19B | 3.32B | Net Debt |
| -767.00M | 2.65B | 2.69B | 2.59B | 1.51B | 2.41B | Total Liabilities |
| 1.32B | 3.98B | 4.61B | 4.89B | 4.26B | 4.12B | Stockholders Equity |
| 2.51B | 2.89B | 3.29B | 3.24B | 2.78B | 2.48B |
| Cash Flow | Free Cash Flow | ||||
| 25.00M | -151.00M | -112.00M | 457.00M | 903.00M | 509.00M | Operating Cash Flow |
| 287.00M | 91.00M | 173.00M | 666.00M | 1.06B | 696.00M | Investing Cash Flow |
| -262.00M | -222.00M | -162.00M | -1.38B | -168.00M | -235.00M | Financing Cash Flow |
| -10.00M | -120.00M | -279.00M | -152.00M | -126.00M | -493.00M |
Foot Locker Technical Analysis
Negative
16.03
Price Trends
18.62
Negative
20.79
Negative
23.68
Negative
Market Momentum
-0.78
Negative
37.88
Neutral
47.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FL, the sentiment is Negative. The current price of 16.03 is below the 20-day moving average (MA) of 16.89, below the 50-day MA of 18.62, and below the 200-day MA of 23.68, indicating a bearish trend. The MACD of -0.78 indicates Negative momentum. The RSI at 37.88 is Neutral, neither overbought nor oversold. The STOCH value of 47.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FL.
Foot Locker Risk Analysis
Foot Locker disclosed 40 risk factors in its most recent earnings report. Foot Locker reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Foot Locker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $5.86B | 6.94 | 57.76% | ― | 3.53% | 24.55% | |
67 Neutral | $605.17M | 8.03 | 11.97% | 2.51% | 2.30% | 0.88% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
55 Neutral | $1.53B | 131.35 | 0.62% | ― | -2.20% | ― | |
53 Neutral | $382.88M | ― | -1.52% | ― | -7.84% | 88.34% | |
50 Neutral | $6.38B | ― | -16.13% | 2.20% | -8.42% | 57.91% |
* Consumer Cyclical Sector Average
Performance Comparison
FL
Foot Locker
16.03
-9.84
-38.04%
FLWS
1-800 Flowers
6.02
-5.07
-45.72%
CROX
Crocs
110.92
-30.33
-21.47%
SCVL
Shoe Carnival
22.27
-12.71
-36.34%
VFC
VF
17.00
2.83
19.97%
Foot Locker Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -7.71% | Next Earnings Date: May 16, 2025
Earnings Call Sentiment Neutral
Foot Locker demonstrated positive momentum through consecutive quarters of comp sales growth and gross margin expansion, driven by strong brand partnerships and successful store and digital initiatives. However, challenges remain in segments such as apparel, WSS, and certain international markets, which reflect cautious consumer behavior and regional market dynamics.Highlights
Positive Comp Sales Growth
Foot Locker reported three consecutive quarters of positive comp sales, with a total comp increase of 2.6% in the fourth quarter, driven by strong performance in the Foot Locker and Kids Foot Locker banners.
Gross Margin Expansion
The company achieved a 300 basis point improvement in gross margin year-over-year, attributed to merchandise margin recovery and cost savings, despite a promotional environment.
Successful Store Refresh Program
In 2024, Foot Locker completed over 400 store refreshes and plans to refresh about 300 more in 2025, with positive customer feedback and improved store performance.
Digital and Loyalty Program Advancements
Foot Locker launched a new mobile app in the US, increasing digital penetration by 100 basis points to 18.2%, and saw a significant increase in sales capture rate from its FLX Rewards Program.
Strong Brand Partnerships
Foot Locker strengthened its partnerships with brands such as Nike, Adidas, New Balance, and ASICS, with double-digit sales growth reported in those brands.
Lowlights
Apparel Business Challenges
The apparel segment faced comp declines down in the mid-teens, due to a lag in innovation compared to footwear.
WSS Segment Performance
WSS saw a comparable sales decline of 3.3%, with consumers being cautious with discretionary spending and the impacts of inflation and natural disasters in key markets.
Underperformance in Asia Pacific
Comps in the Asia Pacific region were down 7.6%, affected by competitive dynamics and the winding down of operations in South Korea.
Atmos Segment Decline
Atmos experienced an 8.7% decline in comps, partly due to a strategic shift away from less profitable third-party digital platforms.
Company Guidance
In Foot Locker's fourth quarter earnings call for fiscal year 2024, CEO Mary Dillon highlighted the company's robust performance and strategic advancements. The company reported a total comp sales increase of 2.6% for the quarter, with Foot Locker and Kids Foot Locker banners showing a comp growth of 3.6%, largely due to strong holiday sales. Champs Sports also marked a second consecutive quarter of positive comps with a 1.8% increase. Gross margins improved by 300 basis points year-over-year, driven by merchandise margin recovery and cost savings efforts, which generated $35 million in the fourth quarter alone. Non-GAAP earnings per share exceeded revised expectations at $0.86, compared to the guidance of $0.70 to $0.80. The company also made significant progress in its Lace Up Plan, completing over 400 store Refreshes in 2024 and planning 300 more in 2025. Digital advancements included a new mobile app rollout and increased digital penetration to 18.2%. The FLX Rewards Program saw strong adoption, with sales capture reaching 49% in North America, close to the 50% target for 2026. Foot Locker also achieved $100 million in cost savings in 2024, ahead of the expected $90 million, and is targeting additional savings of $60 million to $70 million in 2025. Despite consumer caution and external uncertainties, the company remains focused on driving profitable market share gains through continued strategic investments and cost management.Foot Locker Corporate Events
Business Operations and StrategyFinancial Disclosures
Foot Locker Reports Q4 2024 Financial Results
Neutral
Mar 5, 2025
Foot Locker, Inc. reported its financial results for the fourth quarter of 2024, showing a 5.8% decrease in total sales year-over-year, but a 2.6% increase in comparable sales. The company achieved a gross margin expansion of 300 basis points and a significant improvement in net income from continuing operations compared to the previous year. Foot Locker completed 160 store refreshes in the quarter and issued a cautious outlook for 2025, anticipating continued consumer and promotional pressures. The company plans to focus on customer-facing investments and brand partnerships to drive growth and shareholder value.
Executive/Board ChangesBusiness Operations and Strategy
Foot Locker Expands Board with New Appointments
Positive
Jan 14, 2025
On January 12, 2025, Foot Locker’s Board of Directors expanded to 11 members and elected Sonia Syngal and John Venhuizen. Syngal, with extensive experience from Gap, Inc., and Venhuizen, from Ace Hardware, were appointed to various board committees. The company emphasized the significance of their appointments for enhancing strategic initiatives and delivering shareholder value. Additionally, Guillermo G. Marmol will not stand for reelection at the 2025 Annual Meeting, aligning with the company’s retirement policy.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.