Foot Locker Is Stubborn – Part 2

Three months ago I wrote a post about Foot Locker,

Foot Locker Is Stubborn

Foot Locker’s business model of serving as the middle man to sneaker manufacturer is total opposite to Nike’s future strategy of direct to consumer shoe seller.

More importantly, the digital commerce push has allowed Foot Locker to announcement of its first digital entry to mainland China, along with a presence in Hong Kong and Singapore.

The issue with the expansionary moves is that it’s expensive and will squeeze margins. The trade war tariffs may also hurt Foot Locker’s margins and impeded their expansion in China.

If price breaks to the upside, the chart suggest to short price at the $60 level.

Foot Locker Inc. shares jumped as much as 10% to the highest after blowing away estimates late last week.


The highlight of the numbers was comparable-store sales rose 9.7%, more than twice what analysts’ expectations.  It wasn’t financial engineering, just a bit of common sense.  Foot Locker closed under performing stores and renovated and/or relocated other stores in the fourth quarter.

Also during the conference call the CEO said they see mid-single digit comparable sales gain and another double-digit percentage increase in earnings per share for 2019.   It appears that their digital efforts to improve their mobile and web platforms and data analytics capabilities for inventory purposes are working.

Needless to say, price broke through the weekly demand at $60.

Thus, the chart suggests price can move higher to the monthly supply at $76, before moving lower.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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