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With two weeks left in Foot Locker’s fiscal fourth quarter, we present an update of our proprietary index of weekly athletic footwear and apparel data.  And, we like what we’re seeing.  With two weeks to go, quarter-to-date trends accelerated over the past two weeks suggesting that same store sales are tracking up at least 5.4%. This marks an acceleration of about 50 bps from our last update on 1/6.  We also note that comparisons over the next few weeks should ease, given extremely weak industry trends observed at this time last year. 


  •  Street looking for 5.5% comps, we’re modeled at 6%.  However, we note that last quarter’s predicted comps came in light by about 200 bps.  We believe the index is still understating the company’s top line through 4Q as well.
  •  Categories that actually matter most to FL are accelerating, i.e. Basketball and Apparel.   Apparel, while still a small part of the FL story, is becoming a key source of upside and will continue to be an incremental driver throughout 2011.
  •  Reminder on reporting dates/catalysts.  FL won’t report until 1st week of March.  They have no history of pre-announcing positively (or at all!) under the new management team.   Therefore there may be increased speculation/volatility in the near-term as the name trades with the rest of retail in the absence of reported data.
  •  The overall industry bifurcation between performance and non-performance footwear trends remains at its widest spread in over 2 years.  We believe the running and basketball acceleration coupled with a lower than avg. reliance on toning are key to FL’s solid top line results. (see chart below)

FL:  Sales Uptick Observed - FL CompTrack 1 19 11


FL:  Sales Uptick Observed - FW Perf v NonP 1 19 11


Eric Levine