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Foot Locker (FL) Gains But Lags Market: What You Should Know

In the latest trading session, Foot Locker (FL) closed at $32.27, marking a +1.35% move from the previous day. This move lagged the S&P 500's daily gain of 3.06%. Meanwhile, the Dow gained 2.8%, and the Nasdaq, a tech-heavy index, added 0.19%.

Coming into today, shares of the shoe store had lost 10.91% in the past month. In that same time, the Retail-Wholesale sector lost 6.55%, while the S&P 500 lost 6.15%.

Investors will be hoping for strength from Foot Locker as it approaches its next earnings release. On that day, Foot Locker is projected to report earnings of $1.10 per share, which would represent a year-over-year decline of 43.01%. Our most recent consensus estimate is calling for quarterly revenue of $2.11 billion, down 3.55% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.38 per share and revenue of $8.38 billion. These totals would mark changes of -43.63% and -6.4%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Foot Locker. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. Foot Locker currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Foot Locker currently has a Forward P/E ratio of 7.27. Its industry sports an average Forward P/E of 11.15, so we one might conclude that Foot Locker is trading at a discount comparatively.

Investors should also note that FL has a PEG ratio of 0.23 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Apparel and Shoes stocks are, on average, holding a PEG ratio of 1.21 based on yesterday's closing prices.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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