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Foot Locker, Inc. Reports Second Quarter Results

August 18, 2011

NEW YORK, Aug. 18, 2011 /PRNewswire/ — Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its second quarter ended July 30, 2011.

Second Quarter Results

Net income for the Company’s second quarter ended July 30, 2011 was $37 million, or $0.24 per share, compared with net income of $6 million, or $0.04 per share, last year. Second quarter sales increased 16.3 percent, to $1,275 million this year, compared with sales of $1,096 million for the corresponding prior-year period. Second quarter comparable-store sales increased 11.8 percent. Excluding the effect of foreign currency fluctuations, total sales for the second quarter increased 11.7 percent.

“Our associates worldwide are doing an excellent job executing the initiatives of our strategic plan,” said Ken C. Hicks, Chairman and Chief Executive Officer of Foot Locker, Inc. “As a result, we were able to deliver strong sales and profit results in the second quarter, including a comparable store sales gain of 11.8 percent and earnings of 24 cents per share. In addition to the outstanding second quarter results, I am also pleased to be reporting our sixth consecutive quarter of sales and profit growth, versus the comparable prior-year periods. The results over this longer time period encourage us to believe that we have the right strategies in place to create shareholder value on a sustained basis.”

Year-to-Date Results

Net income for the Company’s first six months of the year increased 121 percent to $131 million, or $0.84 per share, compared with net income of $60 million, or $0.38 per share, for the corresponding period last year. Year-to-date sales increased 14.7 percent, to $2,727 million, compared with sales of $2,377 million last year. Year-to-date comparable-store sales increased 12.3 percent. Excluding the effect of foreign currency fluctuations, total sales year-to-date increased 11.9 percent.

Financial Position

The Company’s merchandise inventory at the end of the second quarter was $1,269 million, or 4.1 percent, higher than at the end of the second quarter last year.

During the second quarter of 2011, the Company repurchased approximately 1.3 million shares of its common stock for $29 million under the Company’s $250 million share repurchase program. Year-to-date, the Company has repurchased approximately 2.8 million shares of its common stock for $59 million.

At July 30, 2011, the Company’s cash and short-term investments totaled $681 million, while the debt on its balance sheet was $136 million. The Company’s total cash position, net of debt, was $163 million higher than the same time last year.

Store Base Update

During the first six months of the year, the Company opened 35 new stores, remodeled/relocated 95 stores and closed 54 stores. At July 30, 2011, the Company operated 3,407 stores in 22 countries in North America, Europe, Australia, and New Zealand. In addition, 25 franchised stores were operating in the Middle East and South Korea.

The Company is hosting a live conference call at 9:00 a.m. (ET) on Friday, August 19, 2011 to discuss these results and provide comments on the current business environment and trends. 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, August 26, 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 July 30, 2011 and July 31, 2010
                       (In millions, except per share amounts)

                                                   Second           Second
                                                  Quarter          Quarter
                                                  -------          -------
                                                       2011             2010
                                                       ----             ----
    Sales                                            $1,275           $1,096

    Cost of sales                                       887              791
    Selling, general and administrative
     expenses                                           301              268
    Depreciation and amortization                        28               26
    Interest expense, net                                 1                2
    Other income                                        ---               (1)

                                                      1,217            1,086
                                                      -----            -----
    Income before income taxes                           58               10
    Income tax expense                                   21                4
                                                        ---              ---
    Net Income                                          $37               $6
                                                        ===              ===

    Diluted EPS:
    ------------
    Net Income                                        $0.24            $0.04
                                                      =====            =====

    Weighted-average diluted shares outstanding
                                                      155.2            156.9
                                                      -----            -----


                                        Year-To-Date   Year-To-Date
                                        ------------   ------------
                                                 2011           2010
                                                 ----           ----
    Sales                                      $2,727         $2,377

    Cost of sales                               1,864          1,679
    Selling, general and administrative
     expenses                                     599            548
    Depreciation and amortization                  55             52
    Interest expense, net                           3              5
    Other income                                   (1)            (1)
                                                  ---            ---
                                                2,520          2,283
                                                -----          -----
    Income before income taxes                    207             94
    Income tax expense                             76             34
                                                  ---            ---
    Net Income                                   $131            $60
                                                 ====            ===

    Diluted EPS:
    ------------
    Net Income                                  $0.84          $0.38
                                                =====          =====

    Weighted-average diluted shares
     outstanding                                155.4          157.1
    -------------------------------             -----          -----


                                FOOT LOCKER, INC.
                      Condensed Consolidated Balance Sheets
                                   (unaudited)
                                  (In millions)

                                               July 30,           July 31,
                                               --------           --------
                                                     2011              2010
                                                     ----              ----
    Assets

    CURRENT ASSETS
    Cash, cash equivalents and short-term
     investments                                     $681              $519
    Merchandise inventories                         1,269             1,219
    Other current assets                              189               161

                                                    2,139             1,899

    Property and equipment, net                       408               376
    Deferred tax assets                               298               351
    Other assets                                      274               287
                                                      ---               ---
                                                   $3,119            $2,913
                                                   ======            ======

    Liabilities and Shareholders' Equity

    CURRENT LIABILITIES
    Accounts payable                                 $365              $345
    Accrued and other liabilities                     255               236

                                                      620               581

    Long-term debt and obligations under
     capital leases                                   136               137
    Other liabilities                                 248               279
    SHAREHOLDERS' EQUITY                            2,115             1,916
                                                    -----             -----
                                                   $3,119            $2,913
                                                   ======            ======


                             FOOT LOCKER, INC.
                    Store and Estimated Square Footage
                                (unaudited)
                       (Square footage in thousands)

                                 July 30,      July 31,      August 1,
                                 --------      --------      ---------
                                       2011          2010          2009
                                       ----          ----          ----
    Foot Locker U.S.
       Number of stores               1,136         1,155         1,211
       Gross square footage           4,572         4,658         4,898
       Selling square footage         2,702         2,759         2,901

    Footaction
       Number of stores                 304           313           327
       Gross square footage           1,400         1,442         1,522
       Selling square footage           878           906           951

    Lady Foot Locker
       Number of stores                 353           400           469
       Gross square footage             785           883         1,034
       Selling square footage           454           506           592

    Kids Foot Locker
       Number of stores                 291           304           304
       Gross square footage             697           728           724
       Selling square footage           406           426           425

    Champs Sports
       Number of stores                 536           548           565
       Gross square footage           2,861         2,923         3,018
       Selling square footage         1,899         1,940         2,005

    CCS
       Number of stores                  16            12             2
       Gross square footage              40            31             6
       Selling square footage            26            20             4

    Foot Locker International
       Number of stores                 771           744           737
       Gross square footage           2,236         2,147         2,145
       Selling square footage         1,140         1,091         1,093

    Total Stores Operated
       Number of stores               3,407         3,476         3,615
       Gross square footage          12,591        12,812        13,347
       Selling square footage         7,505         7,648         7,971

    Total Franchised Stores
       Number of stores                  25            20            19
       Gross square footage              82            78            80
       Selling square footage            55            50            53
       ----------------------           ---           ---           ---

SOURCE Foot Locker, Inc.


Source: newswire



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