Foot Locker 2009 Annual Report Download - page 31

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The following table represents a summary of sales and operating results, reconciled to income (loss) from
continuing operations before income taxes.
2009 2008 2007
(in millions)
Sales
Athletic Stores ................................. $4,448 $4,847 $5,071
Direct-to-Customers ............................. 406 390 364
Family Footwear ................................ — — 2
$4,854 $5,237 $5,437
Operating Results
Athletic Stores
(1)
............................... $ 114 $ (59) $ (27)
Direct-to-Customers
(2)
............................ 32 43 40
Family Footwear
(3)
.............................. — — (6)
Division profit (loss) ............................. 146 (16) 7
Restructuring income
(4)
........................... 1 — 2
Total division profit (loss)........................ 147 (16) 9
Corporate expense
(5)
............................. (67) (87) (59)
Total operating profit (loss) ........................ 80 (103) (50)
Other income
(6)
................................ 3 8 1
Interest expense, net............................. 10 5 1
Income (loss) from continuing operations before income taxes . $ 73 $ (100) $ (50)
(1) The year ended January 30, 2010 includes non-cash impairment charges totaling $32 million, which were recorded to write-down
long-lived assets such as store fixtures and leasehold improvements at the Company’s Lady Foot Locker, Kids Foot Locker, Footaction,
and Champs Sports divisions. The year ended January 31, 2009 includes a $241 million charge representing long-lived store asset
impairment, goodwill and other intangibles impairment and store closing costs related to the Company’s U.S. operations. The year
ended February 2, 2008 includes a $128 million charge representing impairment and store closing costs related to the Company’s U.S.
operations.
(2) Included in the results for the year ended January 30, 2010 is a non-cash impairment charge of $4 million to write off software
development costs.
(3) During the first quarter of 2007, the Company launched a new family footwear concept, Footquarters. The concept’s results did not meet
the Company’s expectations and, therefore, the Company decided not to invest further in this business. These stores were converted to
the Company’s other formats. Included in the operating loss of $6 million was $2 million of costs associated with the removal of
signage and the write-off of unusable fixtures.
(4) During 2009, the Company adjusted its 1999 restructuring reserves to reflect a favorable lease termination. During 2007, the Company
adjusted its 1993 Repositioning and 1991 Restructuring reserve by $2 million primarily due to favorable lease terminations.
(5) During the fourth quarter of 2009, the Company restructured its organization by consolidating the Lady Foot Locker, Foot Locker U.S.,
Kids Foot Locker and Footaction businesses in addition to reducing corporate staff, resulting in a $5 million charge. Included in
corporate expense for the year ended January 31, 2009 is a $3 million other-than-temporary impairment charge related to the
investment in the Reserve International Liquidity Fund. Additionally, for the year ended January 31, 2009 the Company recorded a
$15 million impairment charge on the Northern Group note receivable.
(6) Other income includes non-operating items, such as gains from insurance recoveries, gains on the repurchase and retirement of bonds,
royalty income, the changes in fair value, premiums paid and realized gains associated with foreign currency option contracts.
Sales
All references to comparable-store sales for a given period relate to sales from stores that are open at the
period-end, that have been open for more than one year, and exclude the effect of foreign currency fluctuations.
Accordingly, stores opened and closed during the period are not included. Sales from the Direct-to-Customers
segment, excluding CCS sales, are included in the calculation of comparable-store sales for all periods presented.
Sales from acquired businesses that include the purchase of inventory are included in the computation of
comparable-store sales after 15 months of operations. Accordingly, CCS sales have been excluded in the
computation of comparable-store sales.
Sales decreased to $4,854 million, or by 7.3 percent as compared with 2008. Excluding the effect of foreign
currency fluctuations, sales declined 6.1 percent as compared with 2008. Comparable-store sales decreased by
6.3 percent.
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