Jul 6, 2009
Foot Locker stock could rally in next year
Jul 6, 2009
NEW YORK, July 5 (Reuters) - Foot Locker Inc's (FL.N) shares could rise up to 50 percent in the next year as a reorganization of the athletic shoe retailer positioned it to sprint when the U.S. economy starts to recover, Barron's said.
Michael Jordan sneakers at Foot Locker - Photo: www.footlocker.com
Foot Locker has been reshuffling its merchandise, closing stores and slashing costs over the last two years anticipating a downturn in the U.S. economy.
Now, the company -- that is trading below its book value of $12.58 per share -- could see its stock jump to $15 from $10 in the next year if the U.S. economy starts to grow, the weekly business publication said in its July 6 edition.
Foot Locker's price-to-earnings multiple of 14 times its fiscal 2009 estimated earnings is below the 15.1 times of Finish Line (FINL.O) and the 17.3 times of Dick's Sporting Goods (DKS.N), leaving Foot Locker in a more attractive position than its rivals.
Foot Locker, which operates more than 3,600 stores around the world, reported a better-than-expected profit in the first quarter as improved margins from recent the cost cuts helped offset a decline in sales.
(Reporting by Juan Lagorio; Editing by Maureen Bavdek)
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