Here's Why Foot Locker Stock Went Up 22% Last Month
Shares of shoe retailer Foot Locker (NYSE: FL) went up 22.3% during February, according to data provided by S&P Global Market Intelligence. It was a mostly quiet month for the company, but there was some vague chatter of interest from activist investors. And indeed, this is the kind of situation that would likely appeal to them.
Generally speaking, activist investors believe a company is undervalued or not living up to its potential due to mismanagement. So, they buy large stakes in the business to influence improvements. Perhaps the rumors regarding activist investors for Foot Locker gave the market hope that a turnaround was on the horizon, leading to gains in February.
It seems investors have longer to wait. On March 6, shares of Foot Locker plunged after it reported completed financial results for its fiscal 2023 (the fiscal year ended on Feb. 3). It doesn't seem like a so-called turnaround is close. The company's sales only increased 2% this past year. But its gross margin has plunged due to how much management is relying on markdowns.
Source Fool.com
