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Its Time To Buy Foot Locker (FL) stock is taking another leg lower today, 7/24, after fellow sporting goods store Hibbett (HIBB) gave a really weak Q2 sales update. At HIBB, comps are expected to drop 10% while gross margins are under "significant pressure". The market is interpreting this as a negative read for all sporting goods retailers. FL stock is down nearly 5% on the news. It is now more than 35% lower since its most recent earnings report, which was a huge disappointment. FL data by YCharts This sort of drop isn't normal for FL. Looking at the 5 year chart, it becomes apparent that FL stock has just fallen off of a cliff since May. At 9x trailing earnings, the valuation is at a 5 year low while the stock is at its lowest level since early 2014. FL data by YCharts Clearly, investors are pricing in cataclysmic change for FL. Nike is "deliberately transforming or transitioning away from. less differentiated and less productive points of distribution", implying a supply squeeze for sporting goods retailers. For the sporting goods marketplace, this roughly translates into sub out "random sporting goods store", sub in Amazon. Hibbett is just another random sporting goods store. That is likely why the Q2 sales update was so ugly. Hibbett is being Amazon ed as Nike moves onto more productive and more differentiated points of distribution. But Foot Locker is not just another random sporting goods store. Here's the difference. Foot Locker is a global, go to name for athletic footwear. Unless you live in one of the 35 states Hibbett operates in, you probably haven't ever heard of it unless you follow nike untouchable the stock market. Here are the numbers. Foot Locker operates over 3,300 stores across the globe. Sales over the last twelve months are just under $8 billion. Hibbett operates about 1,000 stores in just 35 states. Sales over the last twelve months are under $1 billion. Just nike youth football cleats look at Google (GOOG) (NASDAQ:GOOGL) Trends to understand the paramount difference between Foot Locker and Hibbett. Everyone knows Foot Locker. No one knows Hibbett. Of course Nike wants to reduce the sale of products in "less differentiated multi brand distribution" channels and build out its own nike 1972 DTC channel in order to maximize its potential in an e commerce dominated retail world, but that doesn't mean cutting out all of its wholesale partners who together represent 2/3 of NKE's business. It means pushing out the little guys like Hibbett. As for Foot Locker, not much will change because it is a differentiated multi brand distribution channel with huge reach, tremendous scale, a trendy vibe, and positive comparable sales growth. From this standpoint, we like FL stock here because we think the valuation is significantly depressed and see the upcoming Q2 ER as a potential catalyst to shoot shares higher. Disclosure: I am/we are long FL, AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.