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Why Foot Locker Stock Gained 15% in April

By Demitri Kalogeropoulos - May 7, 2020 at 10:20AM

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Investors got a bit more optimistic about the business last month.

What happened

Foot Locker (FL 0.36%) shareholders outperformed a strong market last month. The stock rose 15% compared to a 13% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The broader trend has been lower, though, with shares down roughly 40% so far in 2020 compared to a 10% decline in the market.

A customer picks out new shoes.

Image source: Getty Images.

So what

Foot Locker shares moved in concert with other hard-hit retailing peers as investors celebrated signs that the Federal Reserve had forestalled a potential financial crisis last month, and that the COVID-19 threat might lessen enough to allow the reopening of parts of the economy by early May.

Now what

The sports apparel retailer's stores have been closed since March 17, but customers have had uninterrupted access to its products through the e-commerce channel. Investors will have to wait until the next quarterly report, likely in late May, before getting a clearer idea of the financial impact on the business. CEO Richard Johnson and his team will also make comments at that time about the company's liquidity position, which has been strained by the crisis, as well as the path they see for a potential growth rebound ahead.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Foot Locker, Inc. Stock Quote
Foot Locker, Inc.
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