Head to Head Analysis: Tilly’s (TLYS) & Foot Locker (FL)

Foot Locker (NYSE: FL) and Tilly’s (NYSE:TLYS) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

93.5% of Foot Locker shares are held by institutional investors. Comparatively, 39.6% of Tilly’s shares are held by institutional investors. 2.9% of Foot Locker shares are held by company insiders. Comparatively, 53.4% of Tilly’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Foot Locker has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.43, meaning that its stock price is 143% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Foot Locker and Tilly’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foot Locker 1 11 13 0 2.48
Tilly’s 0 3 3 0 2.50

Foot Locker presently has a consensus target price of $71.14, suggesting a potential upside of 106.91%. Tilly’s has a consensus target price of $10.83, suggesting a potential upside of 24.38%. Given Foot Locker’s higher probable upside, analysts clearly believe Foot Locker is more favorable than Tilly’s.

Profitability

This table compares Foot Locker and Tilly’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foot Locker 8.39% 23.87% 16.90%
Tilly’s 2.46% 7.86% 4.91%

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 3.6%. Tilly’s does not pay a dividend. Foot Locker pays out 25.4% of its earnings in the form of a dividend. Tilly’s has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Foot Locker and Tilly’s’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foot Locker $7.78 billion 0.58 $1.13 billion $4.89 7.03
Tilly’s $569.68 million 0.44 $47.93 million $0.48 18.15

Foot Locker has higher revenue and earnings than Tilly’s. Foot Locker is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Summary

Foot Locker beats Tilly’s on 12 of the 17 factors compared between the two stocks.

Foot Locker Company Profile

Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).

Tilly’s Company Profile

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

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