The st onger-than-expected performance of Foot Locker in the past financial year has led Standard & Poor’s to upgrade its outlook for the company from negative to stable, while affirming its BB+ issuer credit rating. Foot Locker’s leverage reached a range in the mid-1x; which was much better than the expected debt/Ebitda ratio of more than 3 times. S&P projects a continued increase in revenues and Ebitda margin as the digital channel and store productivity improve. Higher investments will constrain cash flow generation, but S&P see the company generating cash of $800 million in 2022. On the positive side, the rating agency mentions increased e-commerce penetration, higher demand for casual/comfort footwear and basketball shoes and growth in Asia-Pacific. The negatives are Foot Locker’s strong reliance on Nike, volatile fashion cycles and short-term supply chain problems.