Foot Locker Earnings Preview

Watch Foot Locker's (NYSE: FL  ) earnings report to see if it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday. Foot Locker operates as a global retailer of athletic footwear and apparel.

What analysts say:

• Buy, sell, or hold?: Half of analysts think investors should stand pat on Foot Locker while the remaining half rate the stock as a buy half of analysts think investors should stand pat on Foot Locker. Analysts don't like Foot Locker as much as competitor DSW overall. Eight out of eight analysts rate DSW a buy compared to six of 12 for Foot Locker. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $1.37 billion in revenue this quarter. That would represent a rise of 7% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.39 per share. Estimates range from $0.37 to $0.41.

What our community says:
The majority of CAPS All Stars see Foot Locker as a good bet, with 71.4% giving it an outperform rating. The majority of the Fools are in agreement with the All-Stars as 67% give it an outperform rating. Fools are bullish on Foot Locker, though the message boards have been quiet lately with only 98 posts in the past 30 days. Foot Locker's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Foot Locker's income has fallen year over year by an average of 57% over the past five quarters. Revenue has now gone up for three straight quarters. The company boosted its gross margin by 2.6 percentage points in the last quarter. Revenue rose 16.3% while cost of sales rose 12.1% to $887 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q2	Q1	Q4	Q3
Gross Margin	30.4%	32.7%	30.9%	30.3%
Operating Margin	4.6%	10.3%	5.8%	5.8%
Net Margin	2.9%	6.5%	4.1%	4.1%

One final thing: If you want to keep tabs on Foot Locker movements, and for more analysis on the company, make sure you add it to your watchlist.

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Earnings estimates provided by Zacks