Foot Locker (FL) Q2 Earnings In Focus: What's In Store?

Foot Locker, Inc. (NYSE:FL) is slated to release second-quarter fiscal 2016 results on Aug 19. The question lingering in investors’ minds is whether this retailer of athletic shoes and apparel will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 7.8%. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Foot Locker is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Foot Locker has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 91 cents. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, its ESP of 0.00% makes surprise prediction difficult.

Factors Influencing this Quarter

We believe that Foot Locker is likely to gain by continually exploiting opportunities like kids’ and women’s business, shop-in-shop expansion in collaboration with its vendors, store banner.com business, store refurbishment and enhancement of assortments. The company is also well positioned to reap the benefits from the so-called “athleisure” trend that has been sweeping the retail sector as consumers are now opting for more comfortable and athletic style products.

However, fashion obsolescence remains the main concern for Foot Locker’s business model, which involves a sustained focus on product and design innovation. The company’s pioneering position may be hurt by delays in its product launches. Moreover, Foot Locker generates a significant amount of net sales outside the U.S. Due to high exposure to international markets, the company remains prone to currency fluctuations.

FOOT LOCKER INC Price, Consensus and EPS Surprise

FOOT LOCKER INC Price, Consensus and EPS Surprise | FOOT LOCKER INC Quote

Stocks Poised to Beat Earnings Estimates

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:

Hibbett Sports, Inc. (NASDAQ:HIBB) has an Earnings ESP of +7.14% and a Zacks Rank #2 (Buy).

Lowe's Companies, Inc. (NYSE:LOW) has an Earnings ESP of +2.13% and a Zacks Rank #2.

Best Buy Co., Inc. (NYSE:BBY) has an Earnings ESP of +7.14% and a Zacks Rank #2.