FL’s Uniform Adjusted EPS’ has not been growing, and the drop last week is just the market recognizing what was already apparent

• FL’s profitability is materially distorted by accounting for operating leases under GAAP

• As such, their UAFRS EPS’ only grew 9% last year, and is expected to remain roughly flat this upcoming year

• After making the appropriate UAFRS adjustments, FL is trading at a 15.0x Uniform P/E post-drop, which is a discount to averages, but FL is only expected to grow EPS’ by 0%-1% annually, suggesting these valuations are warranted

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Submitted June 13, 2017 at 08:30PM by Valens_Research http://ift.tt/2slZjqN