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Foot Locker (FL)
NYSE:FL

Foot Locker (FL) AI Stock Analysis

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FL

Foot Locker

(NYSE:FL)

Rating:56Neutral
Price Target:
Foot Locker faces significant challenges in profitability and valuation, reflected in a low financial performance score and stretched P/E ratio. Although the earnings call provided some positive insights, technical indicators suggest caution. Recent corporate events introduce both opportunities and risks. Overall, the stock is under pressure but holds potential for recovery if strategic initiatives succeed.
Positive Factors
Acquisition
Foot Locker has entered into an agreement to be acquired by Dick's Sporting Goods for $24 per share, translating to a 66% premium to FL's 60-day volume weighted average price.
Cost Synergies
The transaction is expected to be accretive to EPS in the first full fiscal year post-close and sees $100-$125M in cost synergies in the medium-term through procurement and direct sourcing efficiencies.
Shareholder Value
The expensive purchase price represents a positive outcome for FL shareholders.
Negative Factors
Financial Performance
Foot Locker's 1Q25 results were well below the consensus estimates.
Global Traffic Trends
The company cited softer traffic trends globally that impacted performance.
International Exposure
Foot Locker's international exposure is a new challenge for Dick's Sporting Goods, especially with the weakness of the EMEA business.

Foot Locker (FL) vs. SPDR S&P 500 ETF (SPY)

Foot Locker Business Overview & Revenue Model

Company DescriptionFoot Locker, Inc. is a leading global retailer specializing in athletic footwear and apparel. Headquartered in New York City, the company operates several retail brands including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, and Eastbay. Foot Locker is renowned for offering a wide selection of premium products from popular brands such as Nike, Adidas, and Puma, focusing primarily on the sportswear and streetwear sectors. The company's retail presence spans across North America, Europe, Asia, and Oceania, positioning it as a key player in the athletic retail industry.
How the Company Makes MoneyFoot Locker generates revenue primarily through the sale of athletic footwear, apparel, and accessories across its various retail brands. The company operates a network of physical stores globally and also offers its products via online platforms, catering to a broad customer base. Significant revenue streams include direct sales to consumers in stores and through e-commerce channels. Foot Locker partners with major sports brands to offer exclusive and limited-edition products, which can drive higher sales volumes and margins. The company also engages in strategic collaborations and sponsorships to enhance brand visibility and attract diverse customer segments. Key factors contributing to Foot Locker's earnings include its extensive brand portfolio, strong supplier relationships, and the ability to adapt to changing consumer trends in the sports and lifestyle markets.

Foot Locker Key Performance Indicators (KPIs)

Any
Any
Store Count
Store Count
Indicates the number of retail locations, reflecting the company's physical presence and potential market reach. A growing store count can signal expansion, while a decline might suggest consolidation or strategic shifts.
Chart InsightsFoot Locker's store count has been on a declining trend, reflecting a strategic shift towards optimizing store performance rather than expansion. Despite this reduction, the company has successfully driven comp sales growth and improved gross margins, as highlighted in the latest earnings call. The focus on store refreshes and digital advancements, along with strong brand partnerships, has bolstered performance. However, challenges in apparel and certain international markets persist, indicating a need for targeted strategies in these areas to sustain growth momentum.
Data provided by:Main Street Data

Foot Locker Earnings Call Summary

Earnings Call Date:Mar 05, 2025
(Q4-2024)
|
% Change Since: 38.28%|
Next Earnings Date:Aug 15, 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.
Q4-2024 Updates
Positive Updates
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.
Negative Updates
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 Financial Statement Overview

Summary
Foot Locker's financial performance reveals challenges in growth and profitability. The income statement shows declining revenue and profitability margins, although the balance sheet maintains moderate stability with reasonable leverage. Cash flow management has improved with positive free cash flow, but overall profitability remains a concern.
Income Statement
55
Neutral
Foot Locker's income statement reveals a concerning trend in revenue and profitability. The gross profit margin is 29.07% for the latest fiscal year, but net profit margin has fallen sharply to 0.15% due to a significant decrease in net income. Revenue has declined over the past two years, indicating challenges in sales growth. The EBIT margin has decreased to 1.29%, reflecting pressure on operational efficiency. EBITDA margin is 4.86%, also showing a decline from previous years. These trends suggest weakening profitability and growth prospects.
Balance Sheet
60
Neutral
The balance sheet indicates a balanced financial structure with a debt-to-equity ratio of 0.96, which is reasonable for the retail industry. Return on Equity (ROE) is low at 0.41%, reflecting reduced profitability. The equity ratio stands at 43.11%, showing a stable base of equity financing. Overall, the balance sheet suggests moderate financial stability but highlights the need to improve returns on equity.
Cash Flow
65
Positive
Foot Locker's cash flow statement shows improvement in free cash flow, which grew from negative to $105 million, indicating better cash management. The operating cash flow to net income ratio is 28.75, reflecting strong cash flow generation despite low net income. The free cash flow to net income ratio is 8.75, suggesting that while cash flow is improving, profitability needs attention. Overall, the cash flow situation has improved but remains a concern due to low profitability.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
7.99B8.17B8.76B8.96B7.55B
Gross Profit
2.32B2.27B2.80B3.08B2.18B
EBIT
103.00M142.00M581.00M1.43B537.00M
EBITDA
277.00M-200.00M859.00M1.25B606.00M
Net Income Common Stockholders
12.00M-330.00M342.00M893.00M323.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
401.00M297.00M536.00M804.00M1.68B
Total Assets
6.75B6.87B7.91B8.14B7.04B
Total Debt
2.78B2.94B3.23B3.39B3.19B
Net Debt
2.38B2.65B2.69B2.59B1.51B
Total Liabilities
3.84B3.98B4.61B4.89B4.26B
Stockholders Equity
2.91B2.89B3.29B3.24B2.78B
Cash FlowFree Cash Flow
105.00M-151.00M-112.00M457.00M903.00M
Operating Cash Flow
345.00M91.00M173.00M666.00M1.06B
Investing Cash Flow
-240.00M-222.00M-162.00M-1.38B-168.00M
Financing Cash Flow
-7.00M-120.00M-279.00M-152.00M-126.00M

Foot Locker Technical Analysis

Technical Analysis Sentiment
Positive
Last Price24.02
Price Trends
50DMA
17.12
Positive
100DMA
17.46
Positive
200DMA
20.77
Positive
Market Momentum
MACD
1.93
Positive
RSI
77.08
Negative
STOCH
66.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FL, the sentiment is Positive. The current price of 24.02 is above the 20-day moving average (MA) of 23.93, above the 50-day MA of 17.12, and above the 200-day MA of 20.77, indicating a bullish trend. The MACD of 1.93 indicates Positive momentum. The RSI at 77.08 is Negative, neither overbought nor oversold. The STOCH value of 66.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FL.

Foot Locker Risk Analysis

Foot Locker disclosed 41 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VCVC
83
Outperform
$2.45B8.4125.15%-1.35%-39.06%
76
Outperform
$1.67B9.9219.51%3.65%10.17%-4.71%
AEAEO
64
Neutral
$1.61B9.5312.19%5.37%-0.95%-10.51%
62
Neutral
$6.82B11.052.80%4.32%2.67%-24.92%
KSKSS
59
Neutral
$909.78M7.523.19%6.16%-7.03%-56.59%
SPSPB
58
Neutral
$1.29B24.742.79%3.63%1.46%-95.70%
FLFL
56
Neutral
$2.29B194.63-12.85%-2.62%0.93%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FL
Foot Locker
24.02
-0.30
-1.23%
AEO
American Eagle
9.31
-10.91
-53.96%
KSS
Kohl's
8.12
-11.78
-59.20%
SPB
Spectrum Brands Holdings
51.73
-35.83
-40.92%
SHOO
Steven Madden
23.02
-19.57
-45.95%
VC
Visteon
89.86
-15.50
-14.71%

Foot Locker Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Foot Locker Shareholders Approve Key Proposals at Meeting
Neutral
May 23, 2025

On May 21, 2025, Foot Locker, Inc. held its annual meeting of shareholders, where several key proposals were voted on. Shareholders approved an amendment to the 2007 Stock Incentive Plan and ratified the appointment of KPMG LLP as the independent registered public accounting firm for fiscal year 2025. However, a shareholder proposal to adopt a goal for reducing greenhouse gas emissions in line with the Paris Agreement was not approved. These decisions reflect Foot Locker’s ongoing strategic priorities and stakeholder engagement, impacting its operational and environmental strategies.

The most recent analyst rating on (FL) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Foot Locker stock, see the FL Stock Forecast page.

Delistings and Listing ChangesM&A Transactions
Foot Locker Announces Merger with DICK’S Sporting Goods
Neutral
May 15, 2025

On May 15, 2025, Foot Locker, Inc. entered into a merger agreement with DICK’S Sporting Goods, Inc., where Foot Locker will be acquired by DICK’S, with the merger subject to approval by shareholders and regulatory conditions. The merger will result in Foot Locker’s shares being delisted from the NYSE, and shareholders will have the option to receive cash or shares of DICK’S stock. The agreement includes provisions for the treatment of equity awards and conditions for closing, such as shareholder approval and regulatory clearances. Termination fees are outlined should the merger not proceed under specific circumstances.

The most recent analyst rating on (FL) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Foot Locker stock, see the FL Stock Forecast page.

M&A TransactionsFinancial Disclosures
Foot Locker Announces Merger with DICK’S Sporting Goods
Negative
May 15, 2025

On May 15, 2025, Foot Locker and DICK’S Sporting Goods announced a definitive merger agreement under which DICK’S will acquire Foot Locker for approximately $2.4 billion in equity value. This transaction, subject to shareholder and regulatory approval, is expected to close in the second half of 2025. Additionally, Foot Locker reported preliminary financial results for the first quarter of 2025, showing a net loss of $363 million compared to a net income of $8 million in the previous year. The company experienced a 2.6% decrease in comparable sales, with North America sales down by 0.5%, and attributed these results to softer global traffic trends and an uncertain macroeconomic environment.

The most recent analyst rating on (FL) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Foot Locker stock, see the FL Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Foot Locker Appoints Franklin Bracken as President
Positive
Mar 26, 2025

On March 25, 2025, Foot Locker, Inc. announced the appointment of Franklin R. Bracken as President, effective March 26, 2025. Bracken, who has been with the company since 2010, will continue to report to CEO Mary Dillon and will work to accelerate the company’s Lace Up Plan, focusing on enhancing the omni-retail experience and creating long-term shareholder value. Bracken’s extensive experience in brand management and retail operations positions him to further strengthen Foot Locker’s market position and drive meaningful business results.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.