Analyst Susan Anderson said in a note to investors that she was also raising her price target on the New York-based company from $62 to $73.
"Our upgrade is driven by improving trends in Foot Locker's core footwear business, as well as in their international channels," Anderson wrote. "In a challenging retail environment, we believe FL has done an excellent job of re-aligning their store fleet and creating an in-store experience that is relevant to their customers."
Anderson said her weekly store checks "have shown very clean store inventory levels, with relatively few clearance racks each week." She also noted expanded space for Nike, as well as smaller brands, such as Vans and Fila.
"We believe a solid footwear pipeline and easy compares will continue to drive solid performance for the rest of 2019," she wrote. "We have also seen improvement in the Foot Locker Europe and Foot Locker Pacific results in 2H18, which we believe is encouraging, particularly in the Pacific region which is a core element of FL's long-term growth strategy."
Foot Locker is scheduled to report first-quarter earnings before the market opens on May 24. Anderson said she is expecting earnings of $1.61 a share, consistent with Wall Street.
In March, the retailer posted stronger-than-expected fourth quarter earnings and same-store sales. Earnings totaled $1.56 a share, up 23.8% from the same period a year earlier, and beating analysts' forecasts of $1.40 a share. Group sales rose 2.8% to $2.27 billion and beat Wall Street's consensus estimate of $2.18 billion. Same-stores sales rose 9.7% over the fourth quarter, the company said, ahead of the 4.6% forecast from Refinitiv.