Foot Locker 2014 Annual Report Download - page 5

“Over the past few years, our Company has focused intently on executing our
key strategies. That focus, along with the investments we have made in our stores,
digital capabilities, support facilities, and — most importantly — our people, has
enabled us to develop into a high-performance company.”
• We developed and rolled out to the entire organization a
new leadership model designed specically for Foot Locker;
• And we celebrated the 40th anniversary of the Foot Locker
banner, which started with a single store in California in 1974.
Revised Strategic Framework and Priorities
In light of this progress, our senior leadership team recently
completed a comprehensive evaluation of our opportunities
— over the near term, intermediate term, and long term — to
enhance our performance even further. As I noted above, our
vision remains the same, as do the fundamental elements of
our strategy. We have, however, revised the strategic frame-
work within which to organize our growth initiatives and pursue
our business priorities.
More specically, our seven strategic priorities to build our
business further are to:
• Drive performance in the Core Business with compelling
customer engagement
• Expand our leading position in the Kids’ business
• Aggressively pursue European expansion opportunities
• Build our Apparel penetration and protability
• Build a more powerful Digital business with customer-
focused channel connectivity
• Deliver exceptional growth in our Women’s business
• Build on our industry-leading team by embracing the power
of our People
The pages that follow will provide further insight into each
of these priorities.
New Long-Term Financial Objectives
Along with the growth priorities outlined above, we have
updated the long-term nancial targets. We aspire to remain a
top quartile performer, with:
• Sales of $10 Billion by 2020
• Sales per Gross Square Foot of $600
• Earnings Before Interest and Taxes of 12.5% of Sales
• Net Income of 8.5% of Sales
• Return on Invested Capital of 17%
• Inventory Turnover of 3+ times
We believe we have a very strong foundation and many
strengths upon which to build our performance to reach these
heights. With the strength of our team; our core values; our
leading market positions in basketball, running, and casual
footwear; our multiple banners and distribution channels; our
geographic diversity; our solid nancial position; and, nally,
the powerful partnerships we have developed with our leading
vendors, we believe we have the resources and capabilities to
achieve these objectives and be a top performer, not just in the
athletic industry, but in all of retail.
Enhanced Shareholder Returns
As our business performance has grown, so has our Com-
pany’s cash ow and our ability to return cash to shareholders
while maintaining a strong, exible nancial position.
• During 2014, we paid $127 million in shareholder dividends
and spent $305 million to repurchase almost 5.9 million
shares of our stock. The total shareholder returns of $432
million represent almost 85 percent of our annual net
income for the year.
• In February, we announced that our Board of Directors had
approved a 14 percent increase to our dividend rate, effec-
tive with the dividend payment in the rst quarter of 2015.
This represents the fth consecutive year in which our Board
has authorized a meaningful increase to our dividend rate,
which now stands at an even $1.00 per share on an annual-
ized basis.
• In February, the Board also authorized a new, $1 billion
share repurchase program, as our previous program of $600
million, initiated just two years earlier, had largely been
completed.
These decisions by our Board rmly demonstrate its con-
dence in our Company’s ability to maintain a high level of
nancial performance in the years ahead and our commit-
ment to our shareholders.
Customer
Engagement
People
Core Business
Kids’
Europe
Apparel
Digital
Women’s
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