How much more of a run does
Foot Locker, Inc.
(
FL
) have? Shares of this Zacks #1 Rank (Strong Buy) are near 5-year
highs. Yet there's still plenty of value as the company trades with
a forward P/E of just 12.6.
Foot Locker is a specialty athletic retailer with 3,360 stores in
23 countries in North America, Europe, Australia and New Zealand.
It also has 36 franchised stores in the Middle East and South
Korea.
Best Quarter Ever
On May 18, Foot Locker reported its fiscal first quarter results
and blew by the Zacks Consensus Estimate by 12.2%. Earnings were a
record 83 cents which was 38% higher than the year ago quarter,
which saw 60 cents per share.
It continued an impressive earnings surprise streak of 9 quarters
in a row going back to 2009.
Sales jumped 8.7% to $1.6 billion from $1.45 billion a year ago.
Same store sales were also hot, rising 9.7%.
Merchandise inventories were also under control, falling 1.1% to
$1.1 billion compared with a year ago.
Share Buy Back
During the quarter, Foot Locker repurchased 878,700 shares for
about $27 million under its previously announced $400 million share
repurchase plan.
It has plenty of cash. At the end of the quarter, net of debt, it
had a total cash position of $774 million, an increase of $111
million over the prior year.
It is already using some of that cash to reward shareholders. The
company pays a dividend currently yielding an attractive 2.4%.
2012 Zacks Consensus Estimate Jumps
7 estimates have moved higher since the first quarter earnings
report which has pushed the fiscal 2012 Zacks Consensus Estimate up
to $2.38 from $2.32 per share.
That is earnings growth of 31% as Foot Locker made just $1.81 last
year.
The growth is expected to slow a bit in fiscal 2013, with earnings
expected to rise another 9.6%.
Shares Soar, But There's Still Value
Shares have been on a tear since the 2009 recession.
They recently touched 5 year highs and are threatening that level
again.
Yet, there is still value in the shares. In addition to a P/E under
15, which is my cut-off for value, it has a price-to-book ratio of
2.1. A P/B ratio under 3.0 usually means there is value.
Foot Locker has other value fundamentals including a price-to-sales
ratio under 1.0, at 0.8. A P/S under 1.0 can indicate a company is
undervalued.
Shoes and athletic wear are still hot. Foot Locker is a rare growth
stock that still has plenty of value.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
@TraceyRyniec
.
FOOT LOCKER INC (FL): Free Stock Analysis
Report
FOOT LOCKER INC (FL): Free Stock Analysis
Report
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