Foot Locker (FL) Stock Forecast & Price Target

Foot Locker Inc has demonstrated a strong financial performance, highlighted by a 300 basis point improvement in merchandise margin year-over-year, contributing to an increase in gross margin. The company has experienced sales growth from a diverse range of brands, beyond its primary supplier Nike, suggesting a robust demand for its product offerings. Additionally, the successful execution of refurbished stores has led to a lift in sales and profit dollars, further supporting a positive outlook for revenue growth in the upcoming fiscal year.

Foot Locker Inc. is facing significant challenges as evidenced by lower total sales, ongoing store closures, and increased selling, general and administrative (SG&A) expenses, resulting in a projected operating margin of only 2.6% to 3.1%. Furthermore, the anticipated recovery in sales from Nike has not materialized, leading to modest revenue declines expected for fiscal year 2026, alongside a forecasted flat earnings per share (EPS) in the first half of the year. Additionally, EPS projections for fiscal year 2025 are expected to fall below the lower end of guidance, indicating a continued struggle for profitability compared to pre-pandemic levels, where EPS reached between $4.50 and $5.00.