Foot Locker (FL) Stock Tumbling Today as Nike's Futures Orders Disappoint

NEW YORK (TheStreet) -- Shares of Foot Locker (FL) are tumbling, down 6.95% to $53.86 on heavy volume in late morning trading Friday, after Nike's (NKE)  global "futures orders" for the end of the second quarter showed the slowest growth in four quarters.

Nike said worldwide futures orders -- a metric that shows how much merchandise the company expects to ship in the coming months -- at the end of the second quarter was 11% higher, excluding currency changes, than a year ago. Analysts were expecting a 11.3%, according to Reuters.

In Western Europe, futures orders rose 13%, below the 15% growth analysts expected.

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Also, rival company Finish Line (FINL) posted lower than expected third quarter earnings results this morning, and expects non-GAAP earnings to be flat in fiscal year ending February 28.

New York City-based Foot Locker is a global retailer of athletic shoes and apparel, operating 3,460 stores, including 74 franchised stores.

About 2.72 million shares of Foot Locker traded hands as of 11:11 a.m. Friday, compared to its average volume of about 2.6 million shares a day.

Separately, TheStreet Ratings team rates FOOT LOCKER INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FOOT LOCKER INC (FL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.27% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FOOT LOCKER INC has improved earnings per share by 17.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FOOT LOCKER INC increased its bottom line by earning $2.85 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($3.49 versus $2.85).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FL's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • You can view the full analysis from the report here: FL Ratings Report

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