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Takeaway: FW numbers definitely look sufficiently beared-up for FL this week. The flag is still yellow – not red. But we’re watching.

Footwear numbers definitely look sufficiently beared-up for FL this week. Total footwear dollars were down 6% for the week – marking the fifth consecutive deceleration in top-line on a trailing 3-week basis. We usually delineate between performance and non-performance, but even these numbers are ugly, with the weakest Performance sales trends since April. The spread between Performance and Non-Performance is also at its lowest range since September.

These numbers matter given that December accounts for about 12% of annual sales for Foot Locker and ~50% of Q4. It’s going to take a lot more than this for us to turn the yellow flag to red, as inventories – at least for the time being – are very clean. But given the pervasive view that the ‘sneaker cycle’ is going against us, this data is hardly comforting to the bull case.

FL: Bear Growls - FW Mo SalesPerc

We think that ultimately in this space ‘the tail wags the dog’ and that that the R&D cycle will fuel earnings upside. But we need to continue to see this in weekly sales results to be proved correct.

FL: Bear Growls - FW App 1yr trends


FL: Bear Growls - FL TTT