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Brian HuenFoot LockerFLBUYNov 01, 2013

Would Christmas be the catalyst to move the share price up? Had a disappointing quarter and the stock traded down to a level where he aggressively added more. Likes the athletic trends and their exposure to it. This area will continue to grow and improve with new exciting products. Mainly exposed to running and basketball, which are 2 trends that have been driving the growth of the shoe market. Well managed company that focuses not just on store growth, but on fixing up stores that don’t work and the return of capital. Generating 12%-15% returns on all the stores they are fixing. Expecting a reacceleration of earnings going forward. Trades at 12-13 times earnings. $1 billion of cash on the balance sheet and doesn’t know what to do with it.

Brian Huen

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Stock price when the opinion was issued

$24.03

As of Sep 05, 2025. Market Open.

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BUY

Today, they reported a terrific quarter. The CEO's turnaround plan is taking hold as Nike repairs relations with shoe stores. So are Deckers, New Balance and Adidas. Though shares jumped 5.12% today, FL remains undervalued.

BUY ON WEAKNESS

They reported a great quarter two weeks ago, but shares tumbled 10%. The sellers don't believe the CEO's full-year earnings forecast. Is a buying opportunity.

DON'T BUY

Is holding on, since he bought this early, but won't recommend it. Stock has been a poor performer. Reports Thursday.

SELL

In late 2022, he believed too much in a CEO who couldn't turn around an awful company. The CEO had a great track record and warned the turnaround could take a long time. So, he was patient and bought a small position. A big mistake. His mistake. Hubris. A turnaround can take a very long time.

DON'T BUY

2023 review

She had great faith in the new CEO whom he interviewed last March and bought a small position. The CEO came with a strong track record. He knew that turning around FL was a giant job, but it was impossible. He blew this call. FL was a flailing mall-based retailer. They reported ugly quarters in May and August, the latter reporting that sales sank 10% YOY and earnings -96% YOY. Lots of excess inventory. Awful. FL also halted their dividend, which is why many bought this stock. He was blinded by the CEO's great track record (and still believes in her), but the company had no chance for a turnaround. He should have known better.

BUY

Today it reported same-store sales of -8%, but the beat the street's expected -10%, so shares jumped 16%. The CEO transformed Ulta Beauty from a dog into a success. He expects upgrades tomorrow.

DON'T BUY

It once looked good: great CEO, fine dividend, but they cut that dividend and shares got hammered. His bad.

BUY

She also owns American Eagle Outfitters and Ross in the retail space. Ross is actually up only 1% year to date, but up 40% in the past month. AEO is -40% YTD, up 50% in the last month, and Foot Locker is 15% YTD and 15% past month. The theme for all these--and why should bought them--was that the street punished these stocks so severely, expecting them to lay down and DIE and customers will never spend money again. Well, American consumers are very resilient and continue to spend. Yes, you should be in discount retailing, but this share has already shot up this month. The low-hanging fruit, the time to buy, was last summer--and people missed it. Forget 40% moves, but there will be some movement. She's holding onto Ross and Foot Locker, because there's still upside. Foot Locker remains cheap and still buying back shares. Do your homework in the retail space. Problem is that all the retail ships have risen in recent weeks and we won't see those gains again.

BUY

It beat earnings and shares are rising today. She bought this in February when they announced horrible earnings, but were planning to buyback half their shares and raise their dividend. There was so much bad news, things could not get worse. They have potential upside. Expectations got some horrible, that it's easy to buy.

DON'T BUY

It reports Friday. This used to be a crucial indicator of how Nike was doing, but no longer.

COMMENT

It reports Friday. He didn't like in their last quarter their manufacturing problems in China. They have a fantastic set up for a mall-based shoe store, so if they can't blow out their next quarter, he doesn't know when they can.

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PAST TOP PICK

(A Top Pick Aug 09/21, Down 15.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK has triggered its stop at $47.50. We recommend covering the position at this time. We will look for better opportunities elsewhere.

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TOP PICK

Stockchase Research Editor: Michael O'Reilly We are again recommending FL as a TOP PICK. It has shown a support base technically and it trades at good value here. Recent earnings of $1.96 per share blew away expectations of $1.09. Online sales have grown over 40% and the company is managing inventory despite pandemic logistical challenges. It trades at 9x earnings compared to peers at 41x and continues to build cash reserves. It pays a dividend backed by a payout ratio under 30% of cash flow. We would buy with a stop loss at $47.50, looking to achieve $70 -- upside over 23%. Yield 1.46% (Analysts’ price target is $70.05)

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PAST TOP PICK

(A Top Pick Aug 25/20, Up 92.1%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with FL has triggered its stop at $57. We recommend covering the balance of the position at this time. Combined with the previous recommendation to cover 50% of the position, this results in a net investment return over 55%.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Aug 25/20, Up 106%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with FL is progressing well. We recommend trailing up the stop (from $52) to $57. This would all but guarantee a minimum return on investment of 55%, including the previous recommendation to cover 50% of the position.

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Brian HuenFoot LockerFLBUYNov 01, 2013

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