By Sam Boughedda
Foot Locker (NYSE:FL) is climbing Thursday after the company, in an 8-k filing, revealed three significant changes to the organization.
The sportswear retailer revealed that Andrew Gray, the company's executive vice president of Global Lockers and Champs Sports, has left the company effective January 23.
Foot Locker also confirmed that it would be winding down its Sidestep banner in Europe, and as part of streamlining the organization, it has eliminated a number of corporate and support roles.
The company stated that the winding down of its Sidestep banner in Europe is consistent with its broader efforts to focus on its core and growth banners, while the elimination of some corporate and support roles will result in cost savings of approximately $18 million per year beginning in fiscal 2023.
Reacting to the news, Wedbush analysts said Foot Locker's new CEO, Mary Dillon, is putting her stamp on the business. Nikic raised the firm's price target on Foot Locker to $40 from $37, maintaining a Neutral rating on the stock.
"FL was a business that clearly needed a shake-up, and Ms. Dillon (who we greatly admire) is clearly working diligently to streamline operations and upgrade the executive bench," wrote the analysts. "That said, our enthusiasm is tempered by the ongoing evolution of the Nike (NYSE:NKE) partnership (reduced allocations could be a 2023 headwind) and macro headwinds (high-ASP products sold primarily to moderate-income consumers). On the incremental cost savings announced today, we raise our FY23/24 EPS forecasts to $4.56/$4.80 (from $4.50/$4.66)."