With Foot Locker reporting 3Q results tomorrow, it bears repeating that we remain bullish on the name both into the print as well as over the intermediate term. None of this is new if you’ve been reading our posts since the beginning of 2010 focused on FL’s turnaround prospects. What it is new, however, is the latest monthly athletic footwear data point depicting category performance. If one thing stands out more than than anything, it’s that basketball is on the “rebound.”
While the trend below is clear, it’s even more pronounced on a year-over-year basis with sales improving: +19%, +20% and +53% in August, September, and October respectively (this differs from the chart below which is based on a trailing 3-month data set). No other retailer is more levered to the category than FL.
Expect to hear enthusiasm on Friday’s call regarding the resurgence of hoops, especially as it relates to all four key brands (NKE, UA, Adi, and Reebok) pumping new products supported by major marketing efforts. Beyond the commentary, continued strength in hoops will be a key contributor to same store sales throughout the remainder of the year and into the Spring, or about the same time Nike drops its re-launched “Free” platform.
For reference the current category market share at retail in the specialty athletic channel based on NPD is:
Running = 31%
Basketball = 21%
XTraining = 3%
Classics (originally designed for performance at launch e.g. Shoxx now in this category) = 18%