Foot Locker named a ‘Fresh Pick’ based on Nike improvement
Foot Locker Inc. FL, +2.90% was given Baird’s "Fresh Pick" designation based on gains at Nike Inc. NKE, +0.14% Analyst Jonathan Komp forecasts better same-store sales at Foot Locker in the second half as Nike’s performance in North America has improved. "While a significant portion of Nike’s total growth is being driven by the Nike digital business, importantly for Foot Locker, the wholesale business is back to growth (had been flat/negative prior six quarters) and Nike’s Consumer Direct Offense is consolidating volume to its most strategically important retail partners (including Foot Locker)," the note said. Komp expects cost pressures from things like rent and labor to persist in the near term, but with a boost from Nike and a same-store sales bump, "the stock can work through year-end." Still, Baird maintained its neutral stock rating due to sales and margin questions through fiscal 2019. Baird moved Foot Locker’s price target up to $55 from $52. Foot Locker shares are up 4.5% for the year to date, Nike shares are up 28.3% for the period, and the S&P 500 index SPX, -0.04% has gained nearly 8% for 2018 so far.
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