What to Expect When Foot Locker (FL) Reports Earnings Friday Morning

NEW YORK (TheStreet) -- Shares of Foot Locker Inc  (FL) closed up 0.8% to $64 on heavy volume in Thursday's regular trading session, one day ahead of the specialty athletic retailer's first quarter fiscal 2015 earnings release before the market opens Friday.

For the quarter ended April, the company is expected to earn $1.23 per share on revenue of $1.914 billion, according to analysts surveyed by Thomson Reuters.

In the same period a year ago, Foot Locker posted earnings of $1.11 per share on revenue of $1.87 billion.

The retailer carries a large selection of various athletic brands including Nike (NKE) and Under Armour  (UA).

On Wednesday, Foot Locker announced that its board declared a quarterly cash dividend on the company's common stock of 25 cents per share, which will be payable on July 31 to shareholders of record on July 17, 2015.

About 3.07 million shares have exchanged hands as of 4:05 p.m. ET today, compared to its average trading volume of about 1.66 million shares a day.

New York City-based Foot Locker is a specialty athletic retailer that operates roughly 3,419 stores in 23 countries in North America, Europe, Australia, and New Zealand.

The company is a provider of athletic footwear and apparel.

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, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel its 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 25.58% 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 24.7% 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 $3.56 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($3.94 versus $3.56).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 20.7% when compared to the same quarter one year prior, going from $121.00 million to $146.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. 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. To add to this, FL has a quick ratio of 1.50, which demonstrates the ability of the company to cover short-term liquidity needs.
  • You can view the full analysis from the report here: FL Ratings Report

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