Foot Locker Hits 52-Week High - Analyst Blog

Shares of Foot Locker, Inc. FL hit a 52-week high of $48.16 and eventually closed at $47.30 on Apr 1. The stock's share price has been rising ever since it reported strong fourth quarter fiscal 2013 results on Mar 7. In fact, shares of this specialty athletic retailer have risen 1.7% since it reported fourth quarter results. Average volume of shares traded over the last three months came in at approximately 2,476K.

Better-Than-Expected Results

Foot Locker reported better-than-expected fourth quarter 2013 numbers. Adjusted earnings were 82 cents, up 28% year over year and substantially ahead of the Zacks Consensus Estimate of 75 cents. The upswing was driven by top-line growth and strong expense management.

For the full year, the company's earnings increased in a double digit range for the fourth year in a row. In fact, this Zacks Rank #2 (Buy) stock has delivered an average positive earnings surprise of 21.6% over the past 14 quarters, making investors positive on the stock's performance.

The company's sales escalated 4.6% year over year to $1.791 billion in the fourth quarter. Category-wise, footwear business was the main driver of higher sales in the quarter, with a mid-single digit gain. Both average selling prices and unit sales increased in the quarter. The sales benefited from a 5.3% rise in comparable store sales, mainly contributed by direct-to-customer business, which generated a 13% comparable sales increase.

Apart from delivering strong top and bottom line numbers, the company is also known for its shareholder-friendly moves. In 2013, the company bought back 6.4 million shares worth $229 million, of which 1.6 million shares were repurchased in the fourth quarter.

Additionally, management hiked its quarterly dividend by 10% to 22 cents a share and also approved capital expenditure of $220 million for 2014. This further instills confidence in the stock as dividend hikes reflect a company's sound financial position and healthy cash flows.

We are encouraged by the company's performance over the years, driven by strong fundamentals, impressive financials and significant initiatives undertaken towards achieving its long-term goals.

Other Stock to Consider

Some other stocks worth considering in the retail sector include Kroger Company KR, Companhia Brasileira de Distribuicao CBD and Dunkin' Brands Group, Inc. DNKN. All these stocks carry a Zacks Rank #2 (Buy).