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Foot Locker, Inc. (FL) Q4 Earnings Preview: Back To Its Winning Ways?

 March 06, 2014 10:29 AM
 


Foot Locker, Inc. (NYSE:FL) plans to report financial results for its fourth quarter and full year ended February 1, 2014 before the U.S. markets open on Friday, March 7, 2014. A conference call is scheduled for the same day at 9:00 a.m. EST, during which the Company will discuss these results. The Company will also comment on the current status of its strategic initiatives and provide an initial outlook for 2014. 

Wall Street anticipates that the specialty retailer will earn $0.76 per share for the quarter, which $0.03 more than last year's profit of $0.73 per share. iStock expects FL to run past Wall Street's consensus number. The iEstimate is $0.80, four cents more than expected.

[Related -Foot Locker, Inc. (FL) Put Options Active As Stock Gets Stomped]

Meanwhile, Revenue is forecasted to climb by 2.8% in Q4 2013 versus Q4 2012. The consensus sales estimate is $1.76 billion with a range of $1.68 billion to $1.81 billion. Last year, Foot Locker earned $1.71 billion in the fourth quarter.

Foot Locker operates as a retailer of athletic footwear and apparel. The company operates in two segments, Athletic Stores and Direct-to-Customers. The Athletic Stores segment retails athletic footwear, apparel, accessories, and equipment under various formats, including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Footaction, and CCS. As of February 2, 2013, it operated 3,335 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand.

[Related -Foot Locker (FL) To Acquire Runners Point In European Push]

The Direct-to-Customers segment includes CCS and Footlocker.com, Inc. that sell athletic footwear, apparel, equipment, team licensed products, and private-label merchandise through catalogs, mobile devices, and Internet Websites.

Until recently, Foot Locker had no problem pole vaulting over Wall Street's consensus EPS estimates. The company has fallen short of expectation two of the last three quarterly announcements but ran off 11 consecutive bullish surprises prior to that.

In the last four years, FL has delivered 12 positive surprise, three negative surprises, and an on-target result. On average, the bullish surprises averaged 30.55% more than the consensus while the trifecta of misses averaged 12.78%.

We think there is a reasonable chance the athletic retailer could get back to its winning EPS ways. According to Google Trends, search volume intensity (SVI) for the keyword "Foot Locker" increased 26% year-over-year (YoY) for the November through January timeframes. "Lady Foot Locker's" SVI increased 6.5%, "Kids Foot Locker" jumped 58% and "Champs Sports" was flat YoY.

Based on those numbers, iStock would expect sales to be stronger than the current consensus outlook and closer to the top of that range at $1.81 billion, which would translate to EPS of $0.78 using Wall Street's expected net-margin of 6.34%.

Overall: Google Trends and the iEstimate suggest Foot Locker, Inc. (NYSE:FL) will return to it bullish EPS surprise ways. In the past four year, shares have risen 75% of the time in the three days surrounding better than expected results, with an average gain of 5.71%. 

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