Foot Locker 2002 Annual Report Download - page 5

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3
•Sales in o ur Direct-to -Custo mers Internet and c atalo g
business g rew by 7. 1 percent and, mo re impo rtant,
o perating pro fit befo re co rpo rate expense, net grew by
67 percent.
•Inco me from co ntinuing o peratio ns grew 43 percent,
to $1.10 per share co mpared with $0.77 per share
last year.
•Debt, net of cash was reduced by $184 millio n to zero
at year end 2002, acco mplishing a key o bjective that
the Co mpany established in early 1999.
We are pleased that we increased o ur earnings per share
fro m co ntinuing o peratio ns in each quarter versus the
co mparable quarter of the prio r year. We also co ntinued to
strengthen o ur balance sheet, which remains a high prio ri-
ty fo r o ur Co mpany. During 2002, in reco gnitio n of o ur
much improved financial results and balance sheet,
Standard & Po o r’s and Mo o dy’s Investo r Servic es upgraded
o ur credit ratings to BB+ and Ba2, respec tively.
Given the Co mpany’s strengthened financial po sitio n, o ur
Bo ard o f Directo rs approved a shareho lder dividend pro -
gram in 2002, annualized at $0.12 per share. This pro g ram
was initiated with a $0.03 per share quarterly payment o n
January 31, 2003. During 2002, o ur Bo ard o f Directo rs also
authorized a three- year, $50 millio n share repurchase pro-
gram to enable the Co mpany to purchase its commo n
sto ck, fro m time to time, based on market co nditio ns and
o ther facto rs.
Our strong cash flo w allo wed us to continue to increase
o ur sto re base. During 2002, we opened 157 new sto res,
co ncentrating o ur g ro wth in markets where we had o ppo r-
tunities to strengthen o ur presence. Euro pe c o ntinues to
be o ur mo st sig nificant gro wth o ppo rtunity, where we
o pened 57 sto res in 2002, ending the year with 377 to tal
sto res. Our new Fo o t Lo cker and Champs Spo rts sto res at
Times Square in New Yo rk City were two of o ur mo st excit-
ing projects.
Last year, we also co ntinued to invest in o ur infrastructure
and initiate projects that we expect will benefit o ur
Co mpany in the future. One suc h project was the expan-
sio n o f our Fo o tlo cker.com/ Eastbay distributio n center,
do ubling its capacity to meet the expec ted needs of this
business fo r the next several years. Ano ther impo rtant
pro ject was the development of a plan to ro ll out a new
po int-of-sale system, beg inning in 2003, to o ur U.S.
sto res. We are already enjo ying the benefits o f a similar
state-of-the-art system in o ur Euro pean o peratio n.
The Year Ahead
As we enter 2003, Fo o t Lo cker, Inc.’s financial and o pera-
tio nal po sitio n is strong and we fully intend to benefit
fro m o ur many co mpetitive strengths. These strengths,
inc luding o ur industry leading market share po sitio n, g lo b-
al diversific atio n, private- label so urcing capabilities, mul-
tiple channels o f distributio n, and management depth at
bo th the divisio nal and co rpo rate levels, provide a stro ng
fo undatio n o n which o ur Co mpany can co ntinue to gro w.