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Foot Locker, Inc. (NYSE:FL), the New York-based specialty athletic retailer, has announced at the beginning of the month that it had signed a definitive agreement to acquire Runners Point Warenhandelsges mbH ("RPG"), a specialty athletic store and online retailer based in Recklinghausen, Germany, for total cash consideration of 72 million euros (approximately $94 million). This latest acquisition of FL highlights where the company probably thinks growth of earnings will come from in the future; and it is not US-based. Let's step back a bit from this acquisition and see the context of it as it applies to FL.

There has been much activity in FL of late, perhaps due to anticipation about its 1Q financial report that will come out on May 24, before the markets open. A conference call is scheduled the same day to discuss the results. Their press release states that during the conference call "the Company will comment on the status of its current initiatives, and discuss trends in its business and the athletic industry." If you are interested in hearing this conference call, it may be accessed live by dialing 888-446-3850 (U.S. and Canada) or 630-691-2739 (International) using the passcode 34835217, or via the Investor Relations section of the Foot Locker website. If you can't make it, a replay of the call will also be available via webcast from the same Investor Relations section of the Foot Locker website through June 4, 2013.

No doubt that this call will give management's view of what is going on at the company, but the savvy investor will already know that management's view should be positive. The 2012 results for the company may support this.

The Company reported in March that net income was $104 million, or $0.68 per share, for the 14 weeks ended February 2, 2013. These results included some bad news for FL. There was an after-tax charge of $7 million, or $0.05 per share, for the "impairment of certain tangible and intangible assets related to the Company's CCS division". In the same 13-week period a year ago, FL reported net income of $81 million, or $0.53 per share, which included an after-tax charge of $3 million, or $0.02 per share, for the impairment of certain intangible assets.

FY 2012 was 53 weeks longs, compared to the 52 weeks of FY2011, so direct comparison of the year-to-year results will be a bit misleading. Excluding the impairment charges that occurred in both years, one-time tax benefits totaling $0.07 per share in 2012, and the benefit from the additional 53rd week, full-year non-GAAP net income was $380 million in 2012, or $2.47 per share, an increase of 36 percent over the $1.82 per share recorded in 2011. Total sales reported by the company increased 9.9 percent in 2012 to $6,182 million, compared with sales of $5,623 million last year. Excluding the effect of foreign currency fluctuations, total sales for the full year increased 11.4 percent. Comparable-store sales increased 9.4 percent in 2012.

These are decent results leading into the upcoming 1Q report this Friday. The growth in business is not so outrageous as to be unsustainable. Ken C. Hicks, Chairman of the Board and Chief Executive Officer of FL said about their 2012 earnings that "We believe that we can continue to build on this momentum and deliver a double digit percentage earnings per share gain for full-year 2013, compared to our 2012 non-GAAP results of $2.47 per share." Now, if they don't announce in the upcoming 1Q results that they are on the path for this kind of double-digit growth, guidance will be suspect for the rest of the year.

And there seem to be problems in the brand. The CCS write down for the asset "impairment" casts a shadow on the entire CCS strategy. CCS is the biggest provider of hockey related equipment, especially to professional teams. Weakness in hockey sales around the world may have lead to the write down, but will that kind of underperformance continue forward looking?

Another recent problem has been performance of its e-commerce tools. A site redesign that resulted in a mobile home page that is "heavier" and more complex than its predecessor. A mobile tracking site (Keynote) had given FL's mobile commerce site the number one position in its rankings in October 2012. However that ranking no longer stands. reported that Keynote's Herman Ng found that "the newly designed site has double the number of page objects and triple the amount of kilobytes. Another factor that appears to be slowing down its mobile home page is that it now has multiple objects coming from third-party domains, and some of them have a much slower average load time compared with page objects hosted on the Foot Locker domain."

All of this has not deterred analysts at Canaccord Genuity on May 17 from seeing a higher price target of $41 (13% upside to current levels) and higher earnings estimates. And it is true that the stock is up +12.89% year-to-date.

UBS has also given the stock a thumbs up as it sees the long-term EPS growth forecast at about 11 percent, and notes the P/E ratio is less than the industry average. The operating margin is less than the industry average too, though the return on equity is more than 17 percent. Short interest is more than one percent of the float.

FL has also already announced its capital expense plans for 2013, and will undoubtedly speak to this in the Friday conference call. We see what it is currently spending money on (RPG) but need to see if it will mesh into the FL universe. Perhaps more important to their bottom line will be the soon-upcoming restock of the Air Jordan sneaker. The restock is being administered by a lottery for customers which gives them a buying opportunity. The right momentum with a hot new shoe could continue to keep sales strong and help same store numbers improve. Even though Foot Locker is just a dollar off its 52-week high a big quarter could see it set a new high and even bigger returns heading into the second half of 2013.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.