Nike announced that it was cutting off Foot Locker and focusing on its DTC business (https://www.forbes.com/sites/warrenshoulberg/2022/03/01/swoosh-why-nikes-foot-locker-exit-could-devastate-other-retailers/?sh=3e4b29de6d6d) and FL stock plunged from 40.50 to 28.90 (28% drop).
After last week's earnings call with Nike, John Donahoe stated that Nike will continue to supply FL with product. (https://www.complex.com/sneakers/nike-foot-locker-not-cutting-ties-wholesale-retailers). This means that FL is a great buying opportunity because 70% of FL revenue is Nike and by the next earnings report FL will provide earning that are not as bad as the street anticipates. Over the long run FL should be back up trading in the 40's.
What are your thoughts?
Transcript: https://www.fool.com/earnings/call-transcripts/2022/03/21/nike-nke-q3-2022-earnings-call-transcript/
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