Shares of Foot Locker are soaring upon news that Ulta CEO Mary Dillon will step in as the new chief executive.
- My play today though, is Foot Locker, ticker symbol FL. Shares are soaring today as the footwear retailer reported better than expected second quarter results. But the big news driving that stock today, CEO Richard Johnson will be retiring on September 1. Mary Dillon, the former CEO of Ulta Beauty, is going to be taking Johnson's place.
Earlier today, we were talking to Jay Soule over at UBS. He highlighted to us that Dillon's experience is going to be the key piece here, Seana. And so Dillon spent more than 20 years at Pepsi and was the global CMO at McDonald's. She's going to be crucial to kind of pushing Foot Locker into that next step because, frankly, it seems like they might need it. I mean, sales are down 9.2% year over year, same store sales down about 10%.
I'm curious, that CMO background, can they change how we view Foot Locker a little bit? Because personally, it's brick and mortar, it's mall. Can they get into sneaker culture a little bit more, kind of get that angle into it? Because I think that'd be kind of an interesting space to see Foot Locker go.
SEANA SMITH: Yeah, well, that is a very good idea. I mean, at least as far as the Street is concerned, it looks like the street believes that maybe the change at the top is what Foot Locker has needed, at least for this time. I mean, the pop in shares today is just incredible. It was up just over 25%, the biggest intraday jump that we've seen in the stock in about five years. The Street's very excited about it.
Evercore was out calling it a huge win for the company. Bank of America upgrading it to neutral from underperform. It does need to switch up its strategy, right? So maybe a former CMO is the right person to come in and shake things up.
I think that Foot Locker has been struggling now for quite some time. It's not really in the conversation nearly as much as it has been. But Dave, I don't know. What do you think?
DAVE BRIGGS: Well, look, just real quickly on the personal story, I highly recommend you read the "Journal" piece on Mary Dillon. Talks about how she grew up the daughter of a steelworker, five siblings, one bathroom, really a grinder. And that's what you love to see, in addition to having a female CEO. Only 6% of S&P CEOs are female. So that's nice.
Now, the big question for Foot Locker is, how do they go on without Nike? That was 70% of their business in 2021. And the large goal moving forward is to move away on Nike reliance. And that is going to be a really tough thing to pull off, given Nike's importance in the sector. They say no company should have more than 60% of their sales moving forward. So that's what it's going to be all about for Foot Locker moving forward is trying to move away from the king.