Foot Locker Q3 Results Top Estimates


Foot Locker (FL) delivered stronger-than-expected Q3 2021 results, characterized by impressive top- and bottom-line growth. Revenue and earnings landed above consensus estimates, as the company benefited from a robust back to school season. Nonetheless, FL shares fell 11.95% to close at $50.68 on November 19.

Foot Locker is a U.S. retailer that specializes in athletic shoes and apparel. It operates through its Athletic Store and Direct-to-Customer segments.

Q3 Results

Total sales in the quarter increased 3.9% to $2.19 billion, compared to $2.11 billion delivered the same quarter last year and above consensus estimates of $2.12 billion. Comparable store sales grew 2.2% in the quarter.

Adjusted Diluted EPS landed at $1.93, an improvement from $1.21 a share delivered the same quarter last year. Earnings also topped consensus estimates of $1.34 a share. Gross margin expanded 3.8% to 34.7%, attributed to robust demand and fresh inventory.

Foot Locker exited the third quarter with $1.3 billion in merchandise inventories, up 9.1% year-over-year. Cash and cash equivalent totaled $1.34 billion, with debt on the balance sheet of $560 million.

During the quarter, Foot Locker bolstered its balance sheet with the issuance of $400 million of Senior Notes, due 2029. The company also completed the acquisition of WSS, a U.S.-based athletic footwear and apparel retailer. Additionally, it completed the purchase of atmos, a Japanese retailer. (See Top Smart Score Stocks on TipRanks)

Stock Rating

Last week, Jefferies analyst Janie Stichter reiterated a Buy rating on the stock and lowered the price target to $80 from $91, implying 57.85% upside potential to current levels. According to the analyst, sales and margin momentum are encouraging, and she believes the shares are still inexpensive at current levels.

Consensus among analysts is a Hold, based on 3 Buys, 7 Holds and 1 Sell. The average Foot Locker price target of $64.36 implies 26.99% upside potential to current levels.

Related News:
BMO Economics Publishes Report on Navigating Inflation
TD Named On Dow Jones Sustainability World Index
Understanding GrowGeneration’s Five New Risk Factors

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts