Foot Locker Has Plenty of Game Left Despite Its Recent Dominating Performance

NEW YORK (TheStreet) -- With worse-than-expected results already released by several key retailers, it would make perfect sense if investors were to consider exiting the retail sector altogether. After all, who knows what's around the corner?

That said, it would be a mistake to sell a winner like Foot Locker (FL) solely based on fears about weak retail sales in general. The New York-based athletic gear retailer reports first-quarter earnings Friday before the opening bell, and if my suspicions prove correct, Foot Locker stock will go on a run shortly after the numbers are made public. 

One month or even one quarter's worth of uninspiring consumer spending data mean little for Foot Locker. Athletic-wear is hot right now. And as long as sports remain popular, they will drive growth for brands like Nike (NKE) and Under Armour (UA). And Foot Locker, which carries a large selection of both brands, will continue to prosper.

Think of Foot Locker like a chip company that has its components in all the major smartphone makers. Regardless of which device sells the most, the chip company benefits regardless. In this case, whether Nike or Under Armour prevails in their sneaker/athletic gear battle, Foot Locker benefits. And that's exactly what's been driving the stock, which has a consensus buy rating and an average analyst price target of $69 -- 9% higher than current levels of around $63. And this is even with the stock already up some 13% on the year, dominating the broader averages.

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