Foot Locker 2009 Annual Report Download - page 6

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• Aggressively pursue Growth
Opportunities – developing on-line
initiatives, expanding international
operations, broadening our reach to
a wider range of customer segments
including, importantly, our women’s
business, and exploring new business
opportunities carefully.
• Increase the Productivity of all of our assets – enhancing
the efficiency and effectiveness of our operations, rigorously
managing our expenses, improving the timeliness of our
merchandise flow and converting a higher percentage of
consumers who visit our stores and Internet sites into loyal
customers.
• Build on our Industry Leading Retail Team – attracting,
developing and retaining the best people in retail for our stores
and across our organization; creating and sustaining a sales-
oriented and customer-focused organization by
strengthening the selling and service skills of
our associates.
Benchmarks of Success
Our strategic priorities were developed with
an aim to enhance total shareholder value –
defined as the price our stock commands in
the marketplace plus the dividends paid to
our shareholders. To measure, monitor and
be held accountable for our progress toward
that end, we established a set of financial
objectives for the next five years.
• Sales of $6.0 billion
• Sales per gross square foot of $400
• EBIT margin of 8 percent
• Net Income margin of 5 percent
• Return on Invested Capital of 10 percent
• Inventory Turnover of 3.0 times
The achievement of these financial objectives will require us
to reach beyond what the Company achieved during its most
productive years of the past decade. We believe, however, that
these objectives are realistic, but will require the organization to
“stretch” itself to achieve them.
Conclusion: A Realistic Outlook
The past few years have been challenging times
for retailers, requiring management to assess the
impact of the external environment on their business
prospects. Early on, as I mentioned, the management
of Foot Locker, Inc. recognized that the global retail
environment would be slowing and took appropriate actions
to reduce costs, manage inventory levels more conservatively and
close underproductive stores, in order to sustain positive cash flow
from operations. As a result, Foot Locker, Inc.’s leading position in
the athletic retail industry is intact and our balance sheet is strong,
with substantial cash and short-term investments, and minimal debt,
providing financial flexibility for the future.
As we enter 2010, there are encouraging signs that the overall
economy is beginning to emerge from the recent recessionary
period. I believe Foot Locker, Inc. is positioned well to capitalize on
our business opportunities in the years ahead. Our new strategic
plan is designed to result in a significant improvement in our sales
and profit performance, to reach new heights and deliver increased
shareholder value.
The hard work and insights of our associates throughout
the organization have been integral to the Company’s past
success and will continue to be critical for our future. To
them, our dedicated directors who provide ongoing
oversight and insight to the Company, as well as our
valued suppliers, landlords and shareholders, we
express our gratitude and look forward to our future
with you.
Ken C. Hicks
Chairman of the Board,
President and Chief Executive Officer