Foot Locker 2006 Annual Report Download - page 6

Second, we are excited about a
new retail store format that we plan
to roll out over the next few years.
This opportunity is a value-based
family footwear chain named “Foot-
quarters,” which will be launched
during the spring season of 2007. We
believe this new format provides a
signifi cant growth opportunity for our
Company.
Third, we continue to explore ac-
quisitions of specialty retail footwear
chains. We plan to be cautious in this
pursuit, identifying potential acquisi-
tion targets that would both contrib-
ute to our earnings per share in the
near term and provide a meaningful
return on our investment.
Sportsmanship
Because we believe that one of the
keystones of any successful retailer is
the relationship between the em-
ployee and the consumer, we want
to attract and retain associates who
not only have a strong drive to suc-
ceed, but who interact well with the
customer. It is important, however, to
maintain the appropriate balance be-
tween competing to win and playing
by the rules. With this in mind, we
require all of our management associ-
ates to adhere to a code of conduct,
which helps ensure that our Company
remains in compliance with various
government and regulatory require-
ments, accounting standards and our
own corporate ethics policies.
Playing to win also means help-
ing the less fortunate by contribut-
ing to worthy causes. During 2006,
Foot Locker Foundation, Inc., our
Company and individual associates
continued to play a meaningful role in
supporting several charitable organi-
zations, including the United Negro
College Fund, the United Way and
the American Cancer Society. Foot
Locker, Inc. also led the charge in
organizing a major fundraising event
for the Two Ten Foundation, which
provides many scholarship opportu-
nities to worthy students within the
footwear industry.
As we begin 2007, our cash fl ow
and current fi nancial position are
strong, and we are well situated to
capitalize on new investment op-
portunities. We will closely evaluate
opportunities for growth and balance
them against returning additional
cash to our shareholders. We were
very pleased to be able to increase
our shareholder dividend by 39
percent during the fourth quarter of
last year. Our future is bright and we
remain focused on generating mean-
ingful shareholder value over time.
Finally, it is important to recog-
nize our Board of Directors, which
comprises individuals who hold
themselves to a high standard of
integrity and ethics and are the
professional role models for our as-
sociates. Their guidance over the
past several years and their vigilance
in keeping management focused on
enhancing shareholder value have
been instrumental in our past success
and enhances our confi dence in the
Company’s future.
We would like particularly to thank
Purdy Crawford, a director since 1995,
and Philip Geier, a director since
1994, both of whom are retiring this
year. Our Company has benefi ted
from their involvement and advice
over many years, and they have con-
tributed signifi cantly to our success.
64
We operate our business under a “win now” philosophy,
but also understand that our strategic planning must con-
sider long-term opportunities.
Matthew D. Serra
Chairman of the Board, President
and Chief Executive Offi cer