Foot Locker 2010 Annual Report Download - page 4

Having completed my first full year as
Chairman and CEO of Foot Locker, Inc.,
I can reflect on our accomplishments
in 2010 with a great deal of pride and
appreciation. It was a year of significant
progress as we began to execute the
initiatives of our new strategic plan. This
plan, which was developed by our senior
management team and supported by our
Board, will enable us to achieve our vision
for the future -- “To be the leading global
retailer of athletically inspired shoes and
apparel.”
During our planning process, we
identified many opportunities to enhance
shareholder value by leveraging our
competitive strengths to deliver sales and
profit growth. While in the early stages,
as we implemented parts of the plan and
acted on those opportunities last year, our
financial results began to improve.
From both an operational and financial
standpoint, I am proud of the great strides
we made last year and how we positioned
ourselves for the future. Indeed, I believe
2010 will be seen as an inflection point
for creating sustainable increased value
for our shareholders. I appreciate the
responsiveness and hard work of our
associates worldwide, who deserve the
lion’s share of the credit for our success in
the first year of a long-term journey.
Strategic Priorities
This year’s annual report is designed to
highlight our six strategies over the next
several years, as well as the key initiatives
that we have identified to support them.
The pages that follow highlight those
initiatives and how they positively affected
our results:
 Power Merchandiser of
athletic footwear and apparel
with clearly-defined 
 Apparel

 
Exciting Places
 Growth

  of all

 

We expect that our financial
performance will continue to gain
momentum over the years ahead as we
reap the benefits expected from these
strategic initiatives. While we made a
great deal of progress this past year, we
are determined to maintain a brisk pace of
improvement in the future.
2010 Financial Results
Our financial results for 2010 reflect
strong sales and profit gains in the United
States and key international markets in
both our store and direct-to-customers
segments. Total sales increased to $5.0
billion, reflecting a comparable-store sales
increase of 5.8 percent. Our adjusted
gross margin rate increased 230 basis
points to 30.0 percent and our total
expense rate, including selling, general
and administrative costs and depreciation,
improved by 30 basis points compared
to last year. Together, these results
contributed to a 104 percent increase
in our adjusted earnings per share. A
complete compilation and reconciliation
of our GAAP to non-GAAP adjusted
results accompanies this letter in the
Form 10-K.
These results validate the fact that our
new strategic plan is working. The focus
that we placed on implementing new
initiatives and improving our execution in
2010 combined to drive both higher and
more consistent sales and earnings than
in the past three years. As a result, we
made notable progress last year toward
the achievement of the long-term financial
objectives that we announced in March
2010. We said then that these were goals
that would “stretch” our organization, to
ensure we are playing our best game on
all fronts, over the long term.
The following table summarizes the
progress that we made in 2010 toward the
achievement of our five-year targets which
we continue to believe are realistic and
attainable:

  
Sales (billions) $ 4.9 $ 5.0 $ 6.0
   
   
    
   
I believe 2010 will be seen as an inflection point for creating
sustainable increased value for our shareholders.
LETTER TO SHAREHOLDERS
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