01:50 PM EDT, 06/12/2024 (MT Newswires) -- Foot Locker's ( FL ) management expressed strong confidence in the so-called "Lace Up Plan" aimed at enhancing sales and profitability, anticipating a turning point in H2, Wedbush said in a note Wednesday.

Wedbush conducted a series of meetings with the company's Chief Executive Mary Dillon, Chief Financial Officer Mike Baughn, Chief Commercial Officer Frank Bracken, and the Investor Relations team. "We believe that they do have a credible path towards fundamental improvement (particularly margins, which are well below pre-COVID levels)," Wedbush said.

The management is optimistic about boosting performance with initiatives like loyalty programs, store refreshes, and brand scaling, despite macro challenges, Wedbush said. "One of the key reasons why management is excited about their prospects is the potential for Nike to inflect back to positive territory in Q4," the brokerage said

Despite challenges, management is committed to medium-term margin targets, aiming for high single-digit margins by 2028, expecting significant gross margin expansion this year, aided by improved product allocations, Wedbush said.

Wedbush kept its neutral rating on Foot Locker ( FL ) with a price target of $25.

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