Foot Locker, Inc.
Thesis
Foot Locker is facing significant challenges due to its reliance on Nike, which accounts for 73% of its sales. A decline in Nike's average selling prices (ASPs) and market share will directly impact Foot Locker's gross margins and profitability. Additionally, the proposed border adjustment tax could further erode profits, making it difficult for Foot Locker to sustain growth in a mature retail environment.
Did it work?
No price data is available, so the verdict rests on whether the thesis events occurred. The core dynamics largely materialized: Nike lost U.S. sneaker market share (notably to Adidas) and shifted toward direct-to-consumer channels, and Foot Locker subsequently posted negative comparable sales, gross margin compression, and a steep share price decline beginning in early 2017. The proposed border adjustment tax never took effect, but it was a secondary risk rather than the central driver. Given the absence of actual price performance data, confidence is low.