Financial Results

Net income for the Company's first quarter ended May 2, 2009 was $31 million, or $0.20 per share, compared with net income of $3 million, or $0.02 per share, last year. First quarter results in 2008 included store closing expenses of $3 million, after-tax, or $0.02 per share, and a non-cash impairment charge of $15 million, after-tax, or $0.10 per share. Excluding those items, first quarter net income in 2008 was $21 million, or $0.14 per share.

First quarter sales decreased 7.1 percent to $1,216 million, as compared with sales of $1,309 million for the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales for the first quarter decreased 2.2 percent. First quarter comparable-store sales decreased 2.4 percent.

"The 43 percent increase in our earnings per share versus our adjusted results last year reflects our ability to improve our gross margin rate and reduce our operating expenses, as our sales were affected by the difficult economic environment," stated Matthew D. Serra, Foot Locker, Inc.'s Chairman and Chief Executive Officer. "The merchandise inventory repositioning strategy that we undertook over the past two years allowed us to achieve the 130 basis point increase in our gross margin rate versus the first quarter of last year. Our first quarter profit was also enhanced by our many expense initiatives that contributed to a $21 million decrease in our SG&A expenses compared to the prior-year comparable period."

Financial Position

At the end of the first quarter, the Company's cash and short-term investments totaled $431 million. The Company's total cash position, net of debt, was $289 million, a $6 million improvement from the same time last year.

During the first quarter of 2009 the Company completed a new, 4-year, $200 million revolving credit facility with its banks. The facility provides additional financial flexibility and includes a provision that would allow the Company to increase the size of the credit facility by $100 million, for a total of $300 million.

Store Base Update

During the first quarter, the Company opened 16 new stores; remodeled or relocated 47 stores and closed 24 stores. At May 2, 2009, the Company operated 3,633 stores in 21 countries in North America, Europe and Australia. In addition, 19 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. (ET) on Friday, May 22, 2009 to discuss these results. 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 29, 2009.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or 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.