Foot Locker (FL) Stock Forecast & Price Target

Foot Locker Inc. has demonstrated a positive financial outlook, highlighted by a significant improvement in merchandise margin, which rose by 300 basis points year-over-year, driven by a strategic reduction in promotional activity. The company is experiencing growth momentum, with projections of revenue increasing at a mid-single-digit percentage in FY26, supported by a resurgence in sales from the Nike brand and a variety of other brands showing strong performance. Additionally, the operating margin expanded by 298 basis points to 5.2%, which further underscores the company's effective management of costs and inventory, suggesting a strong operational foundation for future growth.

Foot Locker Inc. is facing significant financial challenges, with operating margin guidance reduced to 2.6%-3.1% amid lower total sales, foreign exchange pressures, and increased selling, general, and administrative expenses as the company continues its investments. Expectations for flat year-over-year earnings per share (EPS) in the first half of the fiscal year, compounded by modest revenue declines forecasted for FY26 and disappointing performance in Nike sales, further highlight the company's struggles. Additionally, the downward revision of sales and EPS projections for FY25, alongside earnings remaining substantially below levels achieved in the pre-COVID years, suggests a persistent negative outlook for Foot Locker's stock.