Foot Locker Boosts 2021 Capital Allocation, Hikes Dividend By 33%

Foot Locker has increased its capital expenditures program for 2021 to $275 million, compared to $155 million last year, and announced the approval of a dividend increase.

Foot Locker (FL) stated that, “A meaningful portion of funds will be invested into its digital capabilities and infrastructure, enhancement of the digital customer experience, as well as initiatives to further streamline global supply chain.”

Furthermore, the new plan would entail “investments to accelerate the Company’s community-based off-mall store rollout in markets across the world, as well as to elevate the customer experience in core stores.” (See Foot Locker stock analysis on TipRanks)

Additionally, Foot Locker announced a 33% hike in its quarterly dividend to $0.20 per share from the previous dividend of $0.15.

Foot Locker said that the new quarterly dividend will be paid on April 30 to shareholders of record as of April 16. Its annual dividend of $0.80 per share now reflects a dividend yield of 1.6%.

On Feb. 16, Cowen & Co. analyst John Kernan raised the stock’s price target to $66 (31% upside potential) from $55 and maintained a Buy rating citing the company’s low valuation.

Overall, the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy consensus rating based on 9 Buys, 5 Holds and 1 Sell. The average analyst price target of $49.23 implies downside potential of about 3% to current levels. Shares have gained about 28% over the last year.

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