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Foot Locker, Inc. Reports First Quarter Financial Results

May 19, 2011

NEW YORK, May 19, 2011 /PRNewswire/ — Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended April 30, 2011.

Financial Results

Net income for the Company’s first quarter ended April 30, 2011 was $94 million, or $0.60 per share, compared with net income last year of $54 million, or $0.34 per share, an increase of 76 percent. First quarter sales increased 13.3 percent to $1,452 million, as compared with sales of $1,281 million for the corresponding prior-year period. First quarter comparable-store sales increased 12.8 percent. Excluding the effect of foreign currency fluctuations, total sales for the first quarter increased 12.0 percent.

“Our team of associates worldwide delivered an outstanding first quarter on top of what was a good first quarter last year,” stated Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker, Inc. “We continue to focus on the key initiatives of our strategic plan, which resulted in a strong sales gain, a gross margin improvement of 200 basis points, and, by managing our expenses effectively, a 38 percent flow-through of incremental sales to increased pre-tax profit compared to the first quarter of last year. We believe this strong focus on our strategic initiatives also positioned us well to take advantage of the ongoing strong athletic cycle and really drive both our top- and bottom-line results.”

Financial Position

Merchandise inventory at the end of the first quarter was $1,159 million, which was $13 million, or 1.1 percent, higher than at the end of the same period last year.

During the first quarter of 2011, the Company repurchased 1,510,000 shares of its common stock for $30 million under the Company’s $250 million share repurchase program. At the end of the first quarter, the Company’s cash and short-term investments totaled $799 million. The Company’s total cash position, net of debt, was $663 million, a $184 million improvement from the same time last year.

Store Base Update

During the first quarter, the Company opened 18 new stores, remodeled or relocated 48 stores and closed 24 stores. At April 30, 2011, the Company operated 3,420 stores in 22 countries in North America, Europe, Australia, and New Zealand. In addition, 27 Foot Locker franchised stores were operating in the Middle East and South Korea.

The Company is hosting a live conference call at 9:00 a.m. (EDT) on Friday, May 20, 2011 to discuss these results and the Company’s near-term outlook. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 p.m. on Friday, May 27, 2011.

Disclosure Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues, and earnings, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors which are detailed in the Company’s filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company’s merchandise mix and retail locations, the Company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), pandemics and similar major health concerns, unseasonable weather, further deterioration of global financial markets, economic conditions worldwide, further deterioration of business and economic conditions, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business and strategic plans effectively with regard to each of its business units, and risks associated with foreign global sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.

                                 FOOT LOCKER, INC.
                  Condensed Consolidated Statements of Operations
                                    (unaudited)
                   Periods ended April 30, 2011 and May 1, 2010
                      (In millions, except per share amounts)
                                                 First Quarter  First Quarter
                                                 -------------  -------------
                                                          2011           2010
                                                          ----           ----
    Sales                                               $1,452         $1,281

    Cost of sales                                          977            888
    Selling, general and administrative expenses           298            280
    Depreciation and amortization                           27             26
    Interest expense, net                                    2              3
    Other Expense/(Income)                                  (1)             -
                                                           ---            ---
                                                         1,303          1,197
                                                         -----          -----
    Income before income taxes                             149             84
    Income tax expense                                      55             30
                                                           ---            ---
    Net income                                             $94            $54
                                                           ===            ===

    Diluted EPS:
    ------------
    Net income                                           $0.60          $0.34
                                                         =====          =====

    Weighted-average diluted shares outstanding          155.7          157.3
    -------------------------------------------          -----          -----

                                FOOT LOCKER, INC.
                      Condensed Consolidated Balance Sheets
                                   (unaudited)
                                  (In millions)
                                          April 30,  May 1,
                                          ---------  ------
                                                2011     2010
                                                ----     ----
    Assets

    CURRENT ASSETS
    Cash, cash equivalents and short-term
     investments                                $799     $616
    Merchandise inventories                    1,159    1,146
    Other current assets                         182      169
                                                 ---      ---
                                               2,140    1,931
                                               -----    -----

    Property and equipment, net                  400      378
    Deferred tax assets                          297      358
    Other assets                                 283      293
                                                 ---      ---
                                              $3,120   $2,960
                                              ======   ======

    Liabilities and Shareholders' Equity

    CURRENT LIABILITIES
    Accounts payable                            $346     $359
    Accrued and other liabilities                260      213
                                                 ---      ---
                                                 606      572
                                                 ---      ---

    Long-term debt and obligations under
     capital leases                              136      137
    Other liabilities                            244      301
    SHAREHOLDERS' EQUITY                       2,134    1,950
                                               -----    -----
                                              $3,120   $2,960
                                              ======   ======

                          FOOT LOCKER, INC.
                 Store and Estimated Square Footage
                             (unaudited)
                    (Square footage in thousands)
                                 April 30,      May 1,        May 2,
                                 ---------      ------        ------
                                       2011          2010          2009
                                       ----          ----          ----
    Foot Locker U.S.
       Number of stores               1,139         1,162         1,217
       Gross square footage           4,583         4,688         4,943
       Selling square footage         2,710         2,776         2,936

    Footaction
       Number of stores                 307           317           329
       Gross square footage           1,417         1,467         1,545
       Selling square footage           890           923           960

    Lady Foot Locker
       Number of stores                 367           405           480
       Gross square footage             815           894         1,061
       Selling square footage           469           512           606

    Kids Foot Locker
       Number of stores                 292           306           302
       Gross square footage             698           731           725
       Selling square footage           407           427           427

    Champs Sports
       Number of stores                 539           549           568
       Gross square footage           2,874         2,928         3,050
       Selling square footage         1,907         1,944         2,039

    CCS
       Number of stores                  12             3           ---
       Gross square footage              31             9           ---
       Selling square footage            20             6           ---

    Foot Locker
     International
       Number of stores                 764           743           737
       Gross square footage           2,200         2,161         2,144
       Selling square footage         1,119         1,095         1,096

    Total Stores Operated
       Number of stores               3,420         3,485         3,633
       Gross square footage          12,618        12,878        13,468
       Selling square footage         7,522         7,683         8,064

    Total Franchised
     Stores
       Number of stores                  27            22            19
       Gross square footage              88            78            73
       Selling square footage            58            53            49
       ----------------------           ---           ---           ---

SOURCE Foot Locker, Inc.


Source: newswire



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