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Press release from PR Newswire

Foot Locker, Inc. Reports 2011 Fourth Quarter Results

Thursday, March 01, 2012

Foot Locker, Inc. Reports 2011 Fourth Quarter Results17:00 EST Thursday, March 01, 2012-- Net Income of $0.53 Per Share, 47 Percent Above Last Year -- Comparable-Store Sales Increased 7.5 Percent -- Eighth Consecutive Quarter of Sales and Profit GrowthNEW YORK, March 1, 2012 /PRNewswire/ -- Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its fourth quarter and full year ended January 28, 2012. Fourth Quarter ResultsThe Company reported net income of $81 million, or $0.53 per share, for the fourth quarter of 2011.  These results included an after-tax charge of $3 million, or $0.02 per share, for the impairment of certain intangible assets.  In the year-ago period, the Company reported net income of $57 million, or $0.36 per share, which included an after-tax charge of $4 million, or $0.03 per share, for the impairment of certain intangible assets, net of the partial recovery of a short-term investment that was written down in 2008.Excluding the net charges in both years, fourth quarter non-GAAP net income was $84 million, or $0.55 per share, in 2011 versus $61 million, or $0.39 per share, in 2010.  This represents a 41 percent increase in the adjusted net income per share amounts.Fourth quarter comparable-store sales increased 7.5 percent.  Total fourth quarter sales increased 7.9 percent, to $1,502 million this year, compared with sales of $1,392 million for the corresponding prior-year period.  Excluding the effect of foreign currency fluctuations, total sales for the fourth quarter increased 8.2 percent. "The strategies our team identified and began implementing two years ago have elevated our financial and operational performance to new heights," said Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker, Inc.  "As a result of the efforts of our entire team, we approached or surpassed many of the financial goals the organization set for ourselves in just the second year of our current five year plan." Fiscal Year ResultsFor the fiscal year, the Company reported net income of $278 million, or $1.80 per share.  These results included the fourth quarter after-tax charge of $3 million mentioned above.  Last year, the Company reported net income of $169 million, or $1.07 per share, including the net charge of $4 million after-tax. Excluding the net charges in both years, full year non-GAAP net income was $281 million, or $1.82 per share in 2011, an increase of 65 percent over the $1.10 per share recorded in 2010.  Comparable-store sales increased 9.8 percent in 2011, and total sales increased 11.4 percent to $5,623 million, compared with sales of $5,049 million last year. Excluding the effect of foreign currency fluctuations, total sales for the full year increased 9.7 percent. Financial PositionThe Company's merchandise inventory at year end was $1,069 million, which was $10 million, or 0.9 percent higher than at the end of last year.                              During the fourth quarter of 2011, the Company repurchased 289,100 shares of its common stock for approximately $7 million.  For the full year, the Company repurchased approximately 4.9 million shares for $104 million.  Last month, the Company announced a new, three-year $400 million share repurchase program extending through January 2015.   At the same time, the Company announced a 9 percent increase in its quarterly dividend, to 18 cents per quarter.At year end 2011, the Company's cash and short-term investments totaled $851 million, while the debt on its balance sheet was $135 million.  The Company's total cash position, net of debt, was $157 million higher than the same time last year.Store Base UpdateThe Company opened 70 new stores, remodeled or relocated 182 stores, and closed 127 stores during fiscal 2011.  At January 28, 2012, the Company operated 3,369 stores in 23 countries in North America, Europe, Australia, and New Zealand.  In addition, 34 franchised stores were operating in the Middle East and South Korea.  The Company is hosting a live conference call at 9:00 a.m. (EST) on Friday, March 2, 2012 to discuss these results and provide comments on the current business environment and our outlook for 2012.  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, March 9, 2012.Disclosure Regarding Forward-Looking StatementsThis 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, 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 January 28, 2012 and January 29, 2011(In millions, except per share amounts)Fourth Quarter 2011Fourth Quarter 2010GAAPAdjustmentsNon-GAAP,As AdjustedGAAPAdjustmentsNon-GAAP,As AdjustedSales$  1,502$       -$  1,502$  1,392$       -$  1,392Cost of sales1,022-1,022962-962Selling, general and administrative expenses 325-325303-303Depreciation and amortization28-2827-27Impairment (1)5(5)-10(10)-Other (income) (2)(3)-(3)(2)2-Interest expense, net2-22-21,379(5)1,3741,302(8)1,294Income before income taxes                                                           123512890898Income tax expense (3)4224433437Net income$       81$        3$       84$      57$        4$       61Diluted EPS$    0.53$    0.02$    0.55$    0.36$    0.03$    0.39Weighted-average diluted shares outstanding153.1-153.1156.2-156.2Footnotes to explain adjustments(1)  2011 and 2010 amount reflects the write-down of CCS intangible assets.(2)  2010 amount reflects the partial recovery of a short-term investment that was written down in 2008.(3)  2011 and 2010 amounts reflect the income tax effect of the pre-tax adjustments highlighted in footnotes above.FOOT LOCKER, INC.Condensed Consolidated Statements of Operations(unaudited)Periods ended January 28, 2012 and January 29, 2011(In millions, except per share amounts)Fiscal 2011Fiscal 2010GAAPAdjustmentsNon-GAAP,As AdjustedGAAPAdjustmentsNon-GAAP, As AdjustedSales$5,623$           -$  5,623$5,049$           -$  5,049Cost of sales3,827-3,8273,533-3,533Selling, general and administrative expenses 1,244-1,2441,138-1,138Depreciation and amortization110-110106-106Impairment (1)5(5)-10(10)-Other (income) (2)(4)-(4)(4)2(2)Interest expense, net6-69-95,188(5)5,1834,792(8)4,784Income before income taxes                                                           43554402578265Income tax expense (3)157215988492Net income$   278$            3$     281$   169$            4$     173Diluted EPS$  1.80$       0.02$    1.82$  1.07$       0.03$    1.10Weighted-average diluted shares outstanding154.4-154.4156.7-156.7Footnotes to explain adjustments(1)  2011 and 2010 amount reflects the write-down of CCS intangible assets.(2)  2010 amount reflects the partial recovery of a short-term investment that was written down in 2008.          (3)  2011 and 2010 amounts reflect the income tax effect of the pre-tax adjustments highlighted in footnotes above.FOOT LOCKER, INC.Condensed Consolidated Balance Sheets(unaudited)(In millions)January 28,January 29,20122011AssetsCURRENT ASSETSCash and cash equivalents $           851 $           696 Merchandise inventories1,0691,059Other current assets1591792,0791,934Property and equipment, net427386Deferred tax assets 284296Other assets260280 $        3,050 $        2,896 Liabilities and Shareholders' EquityCURRENT LIABILITIESAccounts payable $           240 $           223 Accrued and other liabilities308266548489Long-term debt135137Other liabilities257245SHAREHOLDERS' EQUITY2,1102,025 $        3,050 $        2,896 FOOT LOCKER, INC.Stores and Estimated Square Footage(unaudited)(Square footage in thousands)January 28,January 29,January 30,201220112010Foot Locker U.S.   Number of stores1,1181,1441,171   Gross square footage4,4994,6004,744   Selling square footage2,6562,7262,812Footaction   Number of stores292307319   Gross square footage1,3511,4131,471   Selling square footage846888926Lady Foot Locker   Number of stores331378415   Gross square footage737838915   Selling square footage426482524Kids Foot Locker   Number of stores289294301   Gross square footage692706718   Selling square footage403411422Champs Sports   Number of stores534540552   Gross square footage2,8452,8802,946   Selling square footage1,8681,9101,953CCS   Number of stores22122   Gross square footage51316   Selling square footage34204Foot Locker International   Number of stores783751740   Gross square footage2,2762,1672,155   Selling square footage1,1481,1011,094Total Stores Operated   Number of stores3,3693,4263,500   Gross square footage12,45112,63512,955   Selling square footage7,3817,5387,735Total Franchised Stores   Number of stores342622   Gross square footage848478   Selling square footage575553SOURCE Foot Locker, Inc.For further information: John A. Maurer, Vice President, Treasurer and Investor Relations, Foot Locker, Inc., +1-212-720-4092