Shares of Foot Locker Inc. dropped Friday as an analyst said inventory levels are a short-term problem for the athletic footwear retailer during an already-difficult time for the industry.
The stock decline coincided with a broad market sell-off as Wall Street was rattled by surging oil prices and a higher-than expected jump in unemployment in May.
Foot Locker shares fell 73 cents, or 5 percent, to $13.97. The stock has traded between $9.05 and $23.60 during the past 52 weeks.
Sterne Agee analyst Sam Poser initiated coverage of the company with a "Hold" rating and $12 price target. The analyst said Foot Locker's "bloated" inventory levels need to be reduced by about $180 million in 2008. A representative for the company was not immediately available to respond.
Poser does not expect a significant improvement in the athletic footwear business until at least 2009, noting that mall shoppers seem to be spending discretionary income on technology instead of footwear.
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