Foot Locker 2009 Annual Report Download - page 22

Significant increases in costs associated with the production of promotional materials may adversely affect
our operating income.
In the businesses in our Direct-to-Customers segment, we advertise and promote our merchandise through
print catalogs and other promotional materials mailed to consumers or displayed in our stores. As a result,
significant increases in paper, printing, and postage costs could increase the cost of producing promotional and
other materials and, as a result, may have a material adverse effect on our operating income.
We may experience fluctuations in and cyclicality of our comparable-store sales results.
Our comparable-store sales have fluctuated significantly in the past, on both an annual and a quarterly basis,
and we expect them to continue to fluctuate in the future. A variety of factors affect our comparable-store sales
results, including, among others, fashion trends, the highly competitive retail store sales environment, economic
conditions, timing of promotional events, changes in our merchandise mix, calendar shifts of holiday periods, and
weather conditions.
Many of our products, particularly high-end athletic footwear and licensed apparel, represent discretionary
purchases. Accordingly, customer demand for these products could decline in a recession or if our customers
develop other priorities for their discretionary spending. These risks could have a material adverse effect on our
business, financial condition, and results of operations.
Legislative or regulatory initiatives related to global warming/climate change concerns may negatively
affect our business.
There has been an increasing focus and continuous debate on global climate change recently, including
increased attention from regulatory agencies and legislative bodies globally. This increased focus may lead to
new initiatives directed at regulating an as yet unspecified array of environmental matters. Legislative,
regulatory or other efforts in the United States to combat climate change could result in future increases in taxes
or in the cost of transportation and utilities, which could decrease our operating profits and could necessitate
future additional investments in facilities and equipment. We are unable to predict the potential effects that any
such future environmental initiatives may have on our business.
Our operations may be adversely affected by economic or political conditions in other countries.
A significant portion of our sales and operating income for 2009 were attributable to our sales in Europe,
Canada, New Zealand, and Australia. As a result, our business is subject to the risks associated with doing
business outside of the United States, such as foreign governmental regulations, compliance with
U.S. governmental regulations applicable to operations outside of the United States (such as the Foreign Corrupt
Practices Act), foreign customer preferences, political unrest, disruptions or delays in shipments, and changes in
economic conditions in countries in which we operate. Although we enter into forward foreign exchange
contracts and option contracts to reduce the effect of foreign currency exchange rate fluctuations, our
operations may be adversely affected by significant changes in the value of the U.S. dollar as it relates to certain
foreign currencies.
In addition, because we and our suppliers have a substantial amount of our products manufactured in
foreign countries, our ability to obtain sufficient quantities of merchandise on favorable terms may be affected
by governmental regulations, trade restrictions, and economic, labor, and other conditions in the countries from
which our suppliers obtain their product.
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