- Telsey Advisory Group analyst Cristina Fernández reiterated the Market Perform rating on Foot Locker Inc FL with a price target of $31.
- The analyst said the company’s Q2 FY22 is likely to reflect sales and operating margin pressure due to lapping a strong increase last year driven by the reopening economy and the benefit from stimulus.
- The analyst sees a more likely scenario that Foot Locker remains within its guidance range.
- She added that Foot Locker is in the early stages of a transitional period away from an outsized reliance on Nike, Inc. NKE toward a more diversified vendor mix.
- The company is diversifying its banner mix with the recent acquisitions of WSS and atmos, creating uncertainty around the sales trajectory over the next 12-24 months and the operating margin profile of the business.
- The analyst expects the company’s earnings call to address the health of the consumer given inflationary pressures and the impact of the war in Ukraine on European sales, inventory levels, and quality of inventory.
- Price Action: FL shares are trading lower by 1.35% at $31.10 on the last check Monday.
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