Foot Locker's Weak Q1 Performance Was Due to Company-Specific Issues, Says Analyst

• Oppenheimer analyst Brian Nagel offered an insight into Foot Locker Inc’s (NYSE: FL) weak first quarter FY23 earnings.
• The analyst said while macro-conditions are now more challenging, at least somewhat, recent sales and profit issues at Foot Locker appeared largely company-specific and self-inflicted.
• On average, thus far in 2023, shares of leading athletic brands and retailers were down 2% versus a gain of 9% in the S&P 500, noted the analyst.
• Upon the analyst’s view that while macro-challenges persist, incremental fundamental weakness at Foot Locker appeared to reflect primarily issues specific to the operator.
• A weaker guidance, the analyst believed is a further weakening of top-line trend at the company.
• The analyst highlighted Foot Locker CEO Mary Dillion’s reason that sales and margin trends have worsened lately due to incremental economic pressures on core, lower-income consumers, effects of a significant merchandise reset with Nike Inc (NYSE: NKE) and disruptions related to re-positionings within the Foot Locker collection of brands.
• A Foot Locker/Nike merchandise reset could lend to improved market share opportunities, particularly for Dick’s Sporting Goods Inc (NYSE: DKS) and, to a lesser extent, Academy Sports and Outdoors Inc (NASDAQ: ASO), said the analyst.
• For select, leading, well-positioned operators, the analyst believed depressed valuations likely discount for near-term fundamental choppiness.
• Also, improved strategic positioning and enhanced digital tool sets could allow for more profitable, stronger market share gains, as sector malaise abates, concluded the analyst.
• FL Price Action: Foot Locker shares are trading lower by 6.19% at $28.34 at publication Monday.

Read Next: 10 Short Squeeze Stocks To Watch: Toro Corp, Greenidge Generation, Getty Images And More

Photo: Shutterstock