Analyst: Foot Locker boosted by basketball shoes
NEW YORK (AP) — A Sterne Agee analyst on Friday encouraged investors to buy shares of Foot Locker Inc., saying that unlike its major competitors, the retailer benefits from continued strong demand for basketball shoes.
THE BACKGROUND: A significant part of New York-based Foot Locker's revenue comes from the sale of popular basketball shoes made by Nike and other top sneaker makers.
The shoes, endorsed by NBA stars such as LeBron James, often cost more than $200, but still draw crowds to many Foot Locker stores when they first hit the market.
Fellow athletic shoe and apparel retailer Finish Line Inc. on Friday reported a surprise fiscal third-quarter loss, blaming a slowdown in demand for running shoes and a shift in consumer preferences toward basketball shoes. The company also cut its full-year forecast.
The company said Friday that it planned to improve its basketball product assortment in stores and online.
THE OPINION: "The poor results at Finish Line are specific to Finish Line due to having too many balls in the air," Analyst Sam Poser wrote in a note to investors.
"Foot Locker's focus on basketball continues to help increase market share. The overall improved in-store merchandise presentations are also helping Foot Locker to take share in other categories such as running."
THE SHARES: Up 55 cents to $33.05 in midday trading.