Is Foot Locker a Value Trap or a "Shoe-In" for Recovery?
Foot Locker (NYSE: FL) has fallen more than 60% from its 52-week high as the last two earnings reports and a dividend suspension sent discouraged investors fleeing. The sell-off has taken the stock to lows last seen in 2010, leaving investors wondering what to do next. Are the recent lows a reason to buy Foot Locker stock at a bargain price, or is the company so troubled that investors should assume it's cheap for a reason?
In the first half of 2023, Foot Locker reported $3.8 billion in sales, a decline of 11% from the same period in 2022. CEO Mary Dillon blamed shoppers who were "cautious with their discretionary dollars." In the most recent quarter, comparable store sales fell by more than 9% year over year.
The lower sales have left the company with a negligible operational profit. For this reason, net income for the first two quarters of 2023 fell to $31 million versus $227 million in the year-ago period. That also included a $5 million loss in the second quarter.
Source Fool.com
