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Press release from PR Newswire

Foot Locker, Inc. Reports First Quarter Financial Results

Friday, May 18, 2012

Foot Locker, Inc. Reports First Quarter Financial Results07:00 EDT Friday, May 18, 2012-- Earnings Per Share of $0.83, a Record Quarterly Result -- Comparable-Store Sales Increase 9.7 Percent -- Gross Margin Rate Increases 130 Basis PointsNEW YORK, May 18, 2012 /PRNewswire/ -- Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended April 28, 2012.Financial ResultsNet income for the Company's first quarter ended April 28, 2012 was $128 million, or $0.83 per share, compared with net income last year of $94 million, or $0.60 per share, an increase of 38 percent.  First quarter sales increased 8.7 percent to $1,578 million, as compared with sales of $1,452 million for the corresponding prior-year period.  First quarter comparable-store sales increased 9.7 percent.  Excluding the effect of foreign currency fluctuations, total sales for the first quarter increased 9.8 percent.  "2012 has gotten off to an outstanding start, with our first quarter results representing the highest level of quarterly earnings in the Company's history as an athletic business," said Ken C. Hicks, Chairman of the Board and Chief Executive Officer of Foot Locker, Inc.  "The first quarter continued our recent track record of meaningful sales and profit increases over the comparable prior-year periods.  We remain focused on executing the initiatives of our updated strategic plan and objectives in order to continue to drive our strong financial performance."Financial PositionMerchandise inventory at the end of the first quarter was $1,146 million, which was $13 million, or 1.1 percent, lower than at the end of the same period last year. During the first quarter of 2012, the Company repurchased 878,700 shares of its common stock for approximately $27 million under the Company's $400 million share repurchase program which, as previously announced, its Board of Directors authorized earlier this year.  At the end of the first quarter, the Company's cash and short-term investments totaled $909 million. The Company's total cash position, net of debt, was $774 million, a $111 million increase over the same time last year.  "Our strong financial position will enable us to increase our investment in what we believe will be high-return growth opportunities, as we pursue the elevated financial goals of our updated long range plan," stated Lauren B. Peters, Executive Vice President and Chief Financial Officer.Store Base UpdateDuring the first quarter, the Company opened 25 new stores, remodeled or relocated 53 stores, and closed 34 stores.  As of April 28, 2012, the Company operated 3,360 stores in 23 countries in North America, Europe, Australia, and New Zealand.  In addition, 36 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) today, May 18, 2012 to discuss these results and provide comments on the current business environment and trends.  This conference call may be accessed live by dialing 888-446-3850 (U.S. and Canada) or 630-691-2739 (International) using the passcode 32393768, or via the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com.  Please log on to the website 15 minutes prior to the call in order to download any necessary software.  A replay of the call will be available via webcast from the same Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com through May 25, 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, 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 global product 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 28, 2012 and April 30, 2011 (In millions, except per share amounts)First Quarter2012First Quarter2011Sales$    1,578$    1,452Cost of sales1,041977Selling, general and administrative expenses306298Depreciation and amortization2927Interest expense, net12Other Income, net-(1)1,3771,303Income before income taxes 201149Income tax expense7355Net income$      128$        94Diluted EPS:Net income$     0.83$     0.60Weighted-average diluted shares outstanding154.3155.7 FOOT LOCKER, INC.Condensed Consolidated Balance Sheets(unaudited)(In millions)April 28, 2012April 30, 2011AssetsCURRENT ASSETSCash, cash equivalents and short-term investments$    909$    799Merchandise inventories1,1461,159Other current assets1961822,2512,140Property and equipment, net438400Deferred tax assets 288297Other assets261283$  3,238$  3,120Liabilities and Shareholders' EquityCURRENT LIABILITIESAccounts payable $    357$    346Accrued and other liabilities278260635606Long-term debt and obligations under capital leases135136Other liabilities255244SHAREHOLDERS' EQUITY2,2132,134$  3,238$  3,120 FOOT LOCKER, INC.Store and Estimated Square Footage(unaudited)(Square footage in thousands)April 28,2012April 30,2011May 1,2010Foot Locker U.S.   Number of stores1,1001,1391,162   Gross square footage4,4004,5834,688   Selling square footage2,5742,7102,776Footaction   Number of stores290307317   Gross square footage1,3401,4171,467   Selling square footage840890923Lady Foot Locker   Number of stores326367405   Gross square footage728815894   Selling square footage421469512Kids Foot Locker   Number of stores290292306   Gross square footage696698731   Selling square footage406407427Champs Sports   Number of stores539539549   Gross square footage2,8622,8742,928   Selling square footage1,8781,9071,944CCS   Number of stores22123   Gross square footage51319   Selling square footage34206Foot Locker International   Number of stores793764743   Gross square footage2,3152,2002,161   Selling square footage1,1671,1191,095Total Stores Operated   Number of stores3,3603,4203,485   Gross square footage12,39212,61812,878   Selling square footage7,3207,5227,683Total Franchised Stores   Number of stores362722   Gross square footage878878   Selling square footage595853 SOURCE Foot Locker, Inc.For further information: John A. Maurer, Vice President, Treasurer and Investor Relations, Foot Locker, Inc., +1-212-720-4092