Foot Locker (FL) Stock Forecast & Price Target

Foot Locker Inc has demonstrated improved merchandise margins, reflecting a year-over-year increase of 300 basis points due to reduced promotional activities, which positively impacted gross margins and operating margins, now at 5.2%. The company anticipates revenue growth for FY26 in the mid-single digits, driven by a resurgence of the Nike brand coupled with strong performance from other brands in its diverse portfolio. Additionally, refreshed stores have shown promising performance with low to mid-single-digit lifts in revenue and a notable increase in profit dollars, underscoring the effectiveness of their omnichannel strategies.

Foot Locker's financial outlook is negatively impacted by ongoing challenges such as declining total sales and increased selling, general, and administrative (SG&A) expenses, leading to a projected operating margin of only 2.6% to 3.1%. Additionally, the company's reliance on Nike as its primary supplier raises concerns as expectations for revenue recovery from Nike have not materialized, contributing to modest revenue declines anticipated for FY26. The forecast for FY25 indicates potential sales and earnings per share (EPS) may fall below expectations, with EPS remaining significantly lower than pre-pandemic levels of $4.50 to $5.00 seen in 2018-2019.