Foot Locker is worth 3.1 billion dollars currently.
7.5 billion in revenue for 2021.
323 million in profit.
4.3% margin
Foot Locker also has also been a poor performing stock for the last five years, having lost 59% of its value.
Despite that, the company actually has on the financials done well the last ten years.
Revenue is up 49% since 2011, going from 5 billion to 7.5 billion, meaning it outpaced inflation.
They have 2,900 stores, which makes them the largest shoe retailer in the US.
So why is the stock doing so bad?
Two reasons
Almost every retail stock has fallen, with the expectation they lose long term to e-commerce.
Nike recently announced that they’d focus on direct to consumer sales, skipping retailers and distributors.
The first one seems like something Foot Locker has beaten.
28% of Foot Locker sales are direct to consumer, which is growing so fast, the company will eventually have more online sales than retail.
The second one may be a bigger issue.
Nike is 39% of all athletic footwear sold globally and a much larger company, making 17.3 billion in 2021.
So, does Foot Locker live?
I think so.
I don’t think Nike going direct to consumer will be a good thing long term.
Foot Locker, Amazon, Walmart and countless other companies still want to sell sneakers and if Nike limits distribution to them for their own site, other brands will pop up.
Kobe Bryant invested six million into Body Armor in 2014 and despite Gatorade and Powerade being around for decades owned by big companies, Body Armor in seven years took 8% market share, before the Coke buyout.
If all of these companies begin to be able to not sell sneakers from Nike, they’ll have free space for other brands and some startup maybe getting an athlete like Kobe behind it can surge up.
The stock though, not so good.
Foot Locker could become a 70% online company, versus the nearly 30% it is now and still be seen as a retailer. There’s really no reason to suggest it’ll get a major boost in revenue and nobody will see it as some innovative up and comer to boost the price.
So it’s not investable unless some nuts begin trolling Reddit to try and pump it up.