Can Foot Locker's Strategic Efforts Retain Growth Trend?

Appealing stocks are those which continue with their momentum and remain investors’ favorite. Foot Locker, Inc. (NYSE:FL) is one such stock that looks quite promising on the back of its strong brand recognition, sturdy fundamentals and strategic initiatives.

Foot Locker has exhibited a bullish run in the index. So far in 2016, this Zacks Rank #2 (Buy) stock has increased roughly 17% compared with the Zacks categorized Retail–Apparel/Shoe industry that has declined 5.6%. Yesterday, the stock hit a 52-week high of $76.06 and we believe there still much momentum left in the stock, which is quite evident from its VGM Score of “A” and long-term earnings growth rate of 9.9%.

Growth Catalysts

Foot Locker is one of the most widely recognized names in the athletic footwear and apparel industry. The company boasts a solid portfolio of leading brands under a variety of store banners, which helps it to target specific markets and effectively meet consumer demand. We believe that continuous exploitation of opportunities, such as children’s business, shop-in-shop expansion, store refurbishment and enhancement of assortments, are likely to benefit the company, going forward.

Expanding its global footprint, particularly in Europe, also constitutes as a growth catalyst. Further, Foot Locker is focused on improving its eCommerce platform, growing direct-to-consumer business, margin expansion and tapping underpenetrated markets.

The strategic endeavors have aided Foot Locker to post positive earnings surprise for the second straight quarter, as it reported third-quarter fiscal 2016 results. In addition, both earnings and revenues increased year over year. Results were backed by sturdy comparable-store sales performance, cost containment efforts and effective implementation of its operational and financial initiatives. (Read more: Foot Locker Posts Positive Q3 Earnings Surprise)

Consequently, management reaffirmed its projection of a mid-single-digit increase in comps in fiscal 2016. Further, it continues to expect double-digit growth in earnings per share for fiscal 2016.

Stocks to Consider

Other favorably placed stocks in the retail space include Best Buy Co., Inc. (NYSE:BBY) , The Children's Place, Inc. (NASDAQ:PLCE) and Tilly’s Inc. (NYSE:TLYS) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Best Buy, with a long-term earnings growth rate of 11.9%, has jumped 53.8% year to date.

The Children's Place, with a long-term earnings growth rate of 10.3%, has gained roughly 91.8% year to date.

Tilly’s, with a long-term earnings growth rate of 15.5%, has surged a whopping 125.2% in the past six months.

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