Foot Locker 2006 Annual Report Download - page 24

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8
Store Profile
At
January 28, 2006 Opened Closed
At
February 3, 2007
Foot Locker ................... 2,121 57 77 2,101
Champs Sports ................ 556 27 7 576
Footaction ................... 363 17 7 373
Lady Foot Locker ............... 554 22 19 557
Kids Foot Locker ............... 327 23 15 335
Total Athletic Stores ............ 3,921 146 125 3,942
Direct-to-Customers
Footlocker.com — Footlocker.com, Inc., sells, through its affiliates, directly to customers through catalogs and
its Internet websites. Eastbay, Inc., one of its affiliates, is one of the largest direct marketers of athletic footwear,
apparel, equipment, team licensed and private-label merchandise in the United States and provides the Company’s
eight full-service e-commerce sites access to an integrated fulfillment and distribution system. The Company has a
strategic alliance to offer footwear and apparel on the Amazon.com website and the Foot Locker brands are featured
in the Amazon.com specialty stores for apparel and accessories and sporting goods. In addition, the Company has a
marketing agreement with the U.S. Olympic Committee (USOC) providing the Company with the exclusive rights to sell
USOC licensed products through catalogs and via an e-commerce site. The Company has an agreement with ESPN for
ESPN Shop — an ESPN-branded direct mail catalog and e-commerce site linked to www.ESPNshop.com, where consumers
can purchase athletic footwear, apparel and equipment which will be managed by Footlocker.com. Both the catalog and
the e-commerce site feature a variety of ESPN-branded and non-ESPN-branded athletically inspired merchandise.
Franchise Operations
In March of 2006, the Company entered into a ten-year area development agreement with the Alshaya Trading
Co. W.L.L., in which the Company agreed to enter into separate license agreements for the operation of a minimum of
75 Foot Locker stores, subject to certain restrictions, located within the Middle East. Three of these franchised stores
were operational at February 3, 2007. Revenue from the three franchised stores was not significant for the year-ended
February 3, 2007. These stores are not included in the Company’s operating store count above.
Overview of Consolidated Results
2006 was a challenging year for the Company due to the continued highly competitive retail environment both in
the United States and abroad. The 2006 results represent the 53 weeks ended February 3, 2007 as compared with the 52
weeks in the 2005 and 2004 reporting years. Income from continuing operations in 2006, after-tax, was $247 million,
or $1.58 per diluted share, as compared with $263 million or $1.67 per diluted share in 2005.
The following were the financial highlights of 2006:
• Contributed $68 million to its U.S. and Canadian qualified pension plans. The U.S. payment was made in
advance of ERISA requirements.
•Repaid $50 million of its 5-year term loan, in advance of the regularly scheduled payment dates of May 2007
and May 2008.
• Purchased and retired $38 million of the $200 million 8.50 percent debentures payable in 2022 at a $2 million
discount from face value, bringing the outstanding amount to $134 million as of February 3, 2007.
•Declared and paid dividends totaling $61 million. In the fourth quarter the Company increased its quarterly
dividend per share by 39 percent.
• Repurchased $8 million of common stock.