UBS Cuts Price Target on Foot Locker (FL) to $69 Following 1Q; Reiterates Buy

UBS maintained a Buy rating on Foot Locker (NYSE: FL), and cut the price target to $69.00 (from $74.00), following the company's 1Q earnings report.

Analyst Michael Binetti commented, "Unfavorable optics around FL's 1Q print were fairly in line with our expectation: 1) softlines industry deceleration that could leave FL's SSS below Street expectations (FL reported +3% vs our +3%, but buyside ~+4-5%); 2) lack of EPS upside due to 1x costs ($4m for HQ relo); and 3) May-to-date SSS below +MSD 2Q guidance given impactful b'ball launches at end of May. That said, details on 2Q guidance leave less visibility than we expected. FL noted that 2 NYC flagship stores will be closed for renovation (one reopening by BTS, one by holiday)—potentially weighing on 2Q SSS and margins (dead rent). We're maintaining our FY16E EPS of $4.77 but trimming our 2QE EPS to $0.91 (from $0.93) based on B&O and SG&A deleverage amid store investments."

For an analyst ratings summary and ratings history on Foot Locker click here. For more ratings news on Foot Locker click here.

Shares of Foot Locker closed at $54.77 yesterday.

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