Foot Locker (NYSE:FL) is getting slammed after its recently reported earnings. We are compelled to respond today because we are of the opinion that the results are not as dire as the selling would imply, and expectations for a strong second half of 2018 are being ignored.

We will make comparisons relative to what we projected and were looking for in 2018. We will start by discussing valuation, which we feel is cheap, to be it plainly.

We shall describe what we perceive as the impetus for the selling. Specifically, we are going to discuss sales, and hone in on what we feel was the weakest component of the report, comparable sales.

Finally, we discuss what it is we believe investors should be looking for on this vital metric going forward, in conjunction with ongoing risks, and how that impacts our long thesis.

Valuation after this selloff

At the time of this writing, shares are down 16.5% to $38.30. Just one month ago, shares were comfortably back above $50.

The market is nervous, and that is the result of some of the items we will discuss momentarily. That said, it is hard to argue against the fact that the stock is still cheap.

With very little debt, and trading at both a trailing-twelve month, and future-twelve month price-to-earnings ratio below 10 and an enterprise value-to-EBITDA ratio of 5, Foot Locker appears to offer value. The market is baking in risk that the company will fail to execute right now.

That said, investors are….READ FULL COLUMN NOW

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