Factors to Watch Ahead of Foot Locker's (FL) Q3 Earnings

Foot Locker, Inc. FL is scheduled to release third-quarter fiscal 2019 results on Nov 22. This athletic shoes and apparel retailer’s earnings matched the Zacks Consensus Estimate in the last reported quarter. Also, its earnings have outperformed the consensus mark by 2.6% on average in the trailing four quarters.

The Zacks Consensus Estimate for third-quarter earnings has been stable over the past 30 days at $1.07 per share. This suggests an increase of 12.6% from the year-ago period’s reported figure. The consensus mark for revenues is $1,940 billion, indicating a rise of 4.3% from the figure reported in the year-ago quarter.

Key Factors to Note

Foot Locker has been gaining from initiatives like managing inventory, investing in digital platforms and improving supply-chain efficiencies, among others. Further, the company’s focus on kids’ and women’s business, shop-in-shop expansion in collaboration with vendors, store banner.com business, and store refurbishment and enhancement of assortments have been yielding results.

The company is also benefiting from its robust brand portfolio, solid e-commerce platform and growing direct-to-consumer operations. Further, the company’s focus on international expansion, particularly in Europe, has been a driver. We note that such upsides have been aiding the company’s comparable store sales (comps). In its last earnings call, management guided a mid-single-digit increase for third-quarter comps.

However, volatile foreign currency movements have been a concern. Additionally, high SG&A costs have been a deterrent to an extent, though Foot Locker’s margin expansion efforts bode well.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Foot Locker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Foot Locker has an Earnings ESP of +0.64% and a Zacks Rank #3.

Other Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General DG has an Earnings ESP of +2.34% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lowe’s Companies LOW has an Earnings ESP of +1.62% and a Zacks Rank #2.

Ross Stores ROST has an Earnings ESP of +4.03% and a Zacks Rank #2.

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