What Is Foot Locker’s Fundamental Value Based On Expected FY’19 Results?
Foot Locker (NYSE:FL) reported mixed results through fiscal 2018 ended January, with limited growth from athletic store sales. The company shut down some stores through the year, ending the year with a total of 3,331 stores, down from 3,363 at the end of the prior year. Revenue per square foot (implied metric for gross area) also fell from around $514 in fiscal 2017 to $503 in FY’18. Comparatively, direct-to-consumer sales continued to impress – a trend consistent in recent years.
$48 Price Estimate For Foot Locker
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Strong growth in direct-to-consumer revenues is expected to continue through FY’19 and help drive overall revenue growth, as shown below. On the other hand, store revenue could continue to witness some pressure – a trend consistent in recent quarters.
We have summarized our full year expectations for Foot Locker, based on the company’s guidance and our own estimates, on our interactive dashboard platform. We have used our forecasts for the full year to arrive at our $48 price estimate, which is nearly 10% ahead of the current market price. Using our dashboard, you can change expected segment revenue, operating metrics, EBITDA, margins and price-to-earnings multiple figures for Foot Locker to gauge how changes will impact its valuation.
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