Foot Locker Inc (FL, Financial) has experienced a remarkable surge in its stock price, with a 27.40% gain over the past week and an impressive 52.43% gain over the past three months. The company's market capitalization now stands at $2.8 billion, with a current price of $29.71. When compared to the GF Value of $37.57, Foot Locker is currently considered modestly undervalued. This is a notable shift from three months ago when the stock was perceived as a possible value trap, with a past GF Value of $42.63, suggesting investors should think twice before investing.
Introduction to Foot Locker Inc
Foot Locker Inc is a prominent player in the retail - cyclical industry, operating a vast network of retail stores across various continents, including North America, Europe, and Oceania. The company's primary focus is on athletic shoes and apparel, with a significant portion of its merchandise sourced from leading suppliers like Nike. Foot Locker's retail presence is complemented by its e-commerce platforms, which include Footlocker.com, Eastbay, and Final-Score. The company's diverse brand portfolio, including Foot Locker, Champs, and Runners Point, caters to a wide range of consumer preferences.
Assessing Foot Locker's Profitability
Foot Locker's financial health is robust, as evidenced by its high Profitability Rank of 9/10. The company's operating margin stands at 3.81%, which is better than 52.88% of its peers in the industry. Additionally, Foot Locker's return on equity (ROE) is 2.40%, surpassing 38.93% of competitors, while its return on assets (ROA) at 1.02% and return on invested capital (ROIC) at 2.62% are also commendable, outperforming 41.39% and 44.55% of peers, respectively. These figures are a testament to Foot Locker's consistent profitability over the past decade.
Growth Trajectory of Foot Locker
The company's Growth Rank is equally impressive at 9/10. Foot Locker has demonstrated a solid 3-Year Revenue Growth Rate per Share of 7.70%, which is better than 62.2% of its industry counterparts. The 5-Year Revenue Growth Rate per Share is even higher at 8.10%, surpassing 69.31% of peers. However, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is estimated at -1.09%, which, while not as strong, still fares better than 13.64% of peers. The 3-Year EPS without NRI Growth Rate is modest at 0.10%, and the 5-Year EPS without NRI Growth Rate is healthier at 5.30%, both indicating the company's ability to grow earnings over time.
Notable Shareholders in Foot Locker
Foot Locker's shareholder base includes several prominent investors. Andreas Halvorsen (Trades, Portfolio) holds the largest share among them, with 2,235,456 shares, accounting for 2.37% of the company. Steven Cohen (Trades, Portfolio) follows with 413,800 shares, representing 0.44%, and Lee Ainslie (Trades, Portfolio) owns 81,874 shares, making up 0.09% of the company. These significant investments by well-known investors underscore confidence in Foot Locker's market position and future prospects.
Competitive Landscape
When compared to its competitors, Foot Locker maintains a strong market position. Boot Barn Holdings Inc (BOOT, Financial) has a market capitalization of $2.38 billion, Buckle Inc (BKE, Financial) is valued at $2.01 billion, and Carter's Inc (CRI, Financial) stands at $2.59 billion. Foot Locker's market cap of $2.8 billion indicates its competitive edge and leadership within the retail - cyclical sector.
Conclusion
In summary, Foot Locker Inc's recent stock performance has been stellar, with significant gains over the past week and three months. The company's current valuation suggests it is modestly undervalued, presenting a potential opportunity for investors. Foot Locker's strong profitability and growth metrics, coupled with the backing of notable shareholders, position it well in the competitive retail landscape. As the company continues to adapt and grow in a dynamic market, investors will be watching closely to see if this positive trend continues.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
