FL: Sales Uptick Observed

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



Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more