Shares of Foot Locker Inc. rose 19.8% in Friday trading, boosted by the sneaker retailer’s second-quarter results and CEO transition announcement.
Early Friday Foot Locker Inc.
FL,
+20.56%
announced that Chief Executive Officer Richard Johnson will retire on Sept. 1, when he will be replaced by former Ulta Beauty CEO Mary Dillon.
“Dillon brings an opportunity for positive change,” wrote B. of A. Securities analyst Lorraine Hutchinson, in a note. “This is a thesis changing move in our view given Dillon’s reputation in the industry.”
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A highly respected consumer executive, Dillon was CEO of Ulta Beauty for eight years, where she engineered a best-in-class loyalty program, and saw revenue increase at a CAGR of 16%, according to Hutchinson. The company’s stock price also tripled during her tenure, the analyst said.
B. of A. Securities upgraded Foot Locker to neutral, noting that the company’s risk/reward profile is now more balanced.
Foot Locker shares have fallen 12.2% this year, compared with the S&P 500 index’s
SPX,
-1.28%
decline of 11.2%.
Of 22 analysts surveyed by FactSet, two have a buy rating, 17 have a hold rating, and three have a sell rating for Foot Locker.
