Following a two-day, 32% freefall this summer, Hedgeye’s Retail team led by Brian McGough added Foot Locker (FL) as a long recommendation on August 23. Since then, FL has soared 40% to six-month highs.
“When the stock was about $16.50, we added it to our ‘Best Idea’ Long list,” Jeremy McLean said of FL, which is now priced at $27.84. On The Retail Show this week, McLean flagged that FL had hit all-time worst sentiment on the sell-side.
“The last time we hit this bottoming sentiment was right before the stock went from the mid-20s to the mid-40s,” McLean said Monday.
Today, FL addressed any concerns by exceeding expectations in its Q3 earnings report, leading to a single-day 16% increase.
There’s still upside from here, as FL announced a marketing partnership with the NBA, which will help the retailer’s product flow in 2024.
“This type of partnership is investment in the FL core offering and core consumer,” Retail analyst Brian McGough wrote in a recent note. “And it is EXACTLY the type of spending Nike would want to see to support an increased product penetration rate into FL.”
Watch the full clip above, and CLICK HERE to get access to more of the Retail team’s “Best Idea” Long and Short lists.
