Foot Locker
Shares of Foot Locker Inc. (NYSE: FL) have trailed downward for the past 12 months and have lost about 51% of their value in that time. The stock reached a 52-week low in late February, after reporting quarterly earnings and warning the full-year revenue for 2022 would be lower than the year before. Mall-based businesses like Foot Locker are struggling, and rising prices for everything are likely to keep these stores starved for traffic and sales. Foot Locker reports quarterly results early Friday.
Of 21 analysts covering the company, 13 have moved to the sidelines with a Hold rating. Only three have a Buy or Strong Buy rating. At a share price of around $31.20, the stock trades slightly above its median price target of $31.00. At the high price target of $61, the upside potential is almost 96%.
Fiscal 2023 first-quarter revenue is forecast at $2.20 billion, down 6% sequentially and 2.3% lower year over year. Adjusted EPS are forecast at $1.52, down 8.9% sequentially and 22.4% year over year. For the full fiscal year ending in January 2023, Foot Locker is expected to report EPS of $4.43, down 42.9%, on revenue of $8.45 billion, down 5.7%.
The stock trades at 7.1 times expected 2023 EPS, 7.1 times estimated 2024 earnings of $4.19 and 7.0 times estimated 2025 earnings of $4.51 per share. Foot Locker’s 52-week range is $26.36 to $66.71. The company pays an annual dividend of $1.00 (yield of 5.10%). Total shareholder return for the past year was negative 49.4%.
Ross Stores
Off-price apparel retailer Ross Stores Inc. (NASDAQ: ROST), like Foot Locker, has seen its share price trail down for the entire past 12 months. The stock posted its 52-week high a year ago and its 52-week low in early March. Since that low, shares have added about 14%. Discount stores typically do well during periods of inflationary pressure and rising prices. Ross’s performance in the past few weeks was tied directly to inflation fears. The company reports quarterly results after markets close Thursday.
Analysts are bullish on the stock, with 13 of 23 having ratings of Buy or Strong Buy on the shares and the rest rating the stock at Hold. At a share price of around $97.70, the upside potential based on a median price target of $116.00 is 18.7%. At the high price target of $145.00, the upside potential is 48.4%.
For the first quarter of fiscal 2023, analysts expect Ross to report revenue of $4.54 billion, down 9.7% sequentially but up 0.4% year over year. Adjusted EPS are forecast at $1.00, down 3.9% sequentially and down 34% year over year. For the full fiscal year ending next January, analysts are forecasting EPS of $5.00, up 2.6%, on sales of $19.84 billion, up 4.9%.
The stock trades at 19.6 times expected 2023 EPS, 17.1 times estimated 2024 earnings of $5.73 and 15 times estimated 2025 earnings of $6.51 per share. The 52-week trading range is $84.44 to $129.14. The company pays an annual dividend of $1.14 (yield of 1.28%). Total shareholder return for the past year was negative 21.4%.
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