FBR Affirms Foot Locker (FL) at 'Market Perform'; Q1 Comps Miss, but Profit at Record Levels
FBR affirms Foot Locker (NYSE: FL) at Market Perform with a price target of $71 following Q1 results release earlier Friday.
Analyst Susan Anderson commented today, FL reported adjusted 1Q EPS of $1.39, versus FBR/consensus of $1.41/$1.39. Management noted in the press release that 1Q16 was the most profitable quarter in company history. Comps were +2.9%, versus FBR/consensus of +5.0%/+4.5% and +7.8% LY.
Recall that when FL reported 4Q earnings on Feb 26, comps were running +LSD [low single-digits]. Management noted that in Feb FL cycled the strong sales associated with LY's NBA All-Star game in New York, and expectations were for comps to be +MSD for the remainder of the quarter. It appears that a slowing basketball market could be starting to weigh on FL's top line given that it has the most exposure to basketball. We would note though that FL has done a good job of moving into other popular categories, such as casual running, which could help to offset basketball weakness.
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