Foot Locker Unveils Capital Spending Plan Before Q4 Earnings

Just few days to go for its fourth-quarter fiscal 2017 earnings release, and Foot Locker, Inc. (NYSE:FL) has already played smart. This New York-based company, which is slated to announce financial results on Mar 2, unveiled a capital allocation plan and rewarded shareholders with a hike of 11% in quarterly dividend to 34.5 cents.

Foot Locker revealed a capital expenditure program of $230 million for 2018. The company plans to spend the capital strategically with primary focus being on developing digital competencies and supply chain. The company’s digital endeavors comprise improvement of mobile and web platforms, implementation of new point-of-sale software worldwide, and expansion of data analytics capabilities.

Apart from these, this Zacks Rank #2 (Buy) company plans to spend a major portion of the capital on its fleet of stores, including revamping and remodeling of the same. Further, it is exploring off-mall retail formats opportunities and executing shop-in-shop spaces in collaboration with vendors.

In the recent past, Foot Locker made a strategic investment in Carbon38. Following, the $15 million Series A funding, the retailer of athletic shoes and apparel has taken a minority stake in the world’s major women's luxury active apparel firm.

The company is certainly trying to improve performance through operational and financial initiatives. Management believes that by continually capitalizing on opportunities like kids’ and women’s business, shop-in-shop expansion in partnership with its vendors, store banner.com business, store refurbishment and enhancement of assortments, is likely to benefit the company in the long run. The company is focusing on augmenting e-commerce platform, growing direct-to-consumer operations and tapping underpenetrated markets.

Shares of the company have surged a whopping 45.2% in the past six months, considerably outperforming the industry’s growth of 35.7%.

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