Foot Locker Has Been Thrown on the Clearance Rack -- Is It Now a Buy?

Investors are tossing shares of Foot Locker (NYSE: FL) onto the clearance rack. Shares of Foot Locker have fallen sharply based on a disappointing outlook on its earnings call (the company expects sales to fall by 4% to 6% in 2022) , growing concerns that Nike's direct-to-consumer (DTC) business is cutting out the middleman, and a slew of analyst downgrades and are now down more than 50% from their 52-week high.

On its latest earnings call, Foot Locker revealed that it will be diversifying its product mix so that no one vendor will make up more than 55% of its supplier spending . Historically, Nike has made up an overwhelming percentage of Foot Locker's inventory, which has been good for Foot Locker since Nike has incredible brand strength and has been in demand for years. For example, in 2020 Nike made up about 75% of Foot Locker's inventory.

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Source Fool.com