Foot Locker, Inc. reported net income of $0.33 per share for its fourth quarter and $0.99 per share for its full year for the period ended February 1, 2003. The Company also reported a substantially enhanced financial position, with a year-end cash balance of $357 million, and debt, net of cash reduced to zero.

Income from continuing operations for the fourth quarter ended February 1, 2003 increased 14 percent to $48 million, or $0.33 per share, compared with $42 million, or $0.28 per share, last year. Sales for this year’s fourth quarter increased 5.1 percent, to $1,214 million, as compared with $1,155 million last year, reflecting a comparable-store decrease of 0.9 percent.

Income from continuing operations for the full year increased 46 percent to $162 million, or $1.10 per share, as compared with $111 million, or $0.77 per share, last year. Last year’s full year results included a loss of $0.21 per share from disposed operations. Adjusted net income increased 13 percent, to $160 million, or $1.10 per share from $142 million, or $0.98 per share, last year. Sales for the full year increased 4.3 percent, to $4,509 million as compared with sales from adjusted operations of $4,325 million last year, reflecting a comparable-store increase of 0.1 percent.

“2002 represented the fourth consecutive year of significant earnings improvement for our Company,” stated Mathew D. Serra, Foot Locker Inc.’s President and Chief Executive Officer. “Additionally, the fourth quarter of 2002 represented the 14th consecutive quarter of adjusted earnings improvement versus the same period of the prior year. These profit improvements were largely attributable to the successful implementation of several strategic initiatives.” These strategic initiatives, which continue to be a priority, include the following:

     * Significant growth of our European operation
     * Profit Growth of Champs Sports division
     * Development of highly profitable direct-to-customer channel
     * Expanded offerings of private-label apparel
     * Lower expense rates resulting from corporate-wide initiatives

The Company continued to substantially enhance its capital structure by employing free cash flow to reduce debt and increase its cash balance. At year-end, the Company’s cash balance was $357 million and its total balance sheet debt, net of cash, was zero. During 2002, the Company opened 157 stores, remodeled/relocated 205 stores and closed 122 stores. At February 1, 2003 the Company operated 3,625 stores in 14 countries in North America, Europe and Australia.

Mr. Serra continued, “We are proud that we ended 2002 with $357 million of cash, equal to our total balance sheet debt. Reducing our debt, net of cash, to zero, is the accomplishment of an objective that our organization set at the beginning of 1999, when our net debt balance was $574 million. This strengthened financial position allowed us to initiate our $0.12 per share annual shareholder dividend in the fourth quarter of 2002.”

During 2003, the Company plans to maintain a sharp focus on growing top-line sales, controlling expenses and generating positive cash flow. Maintaining a strong financial position will remain a high priority, together with investing in opportunities to increase shareholder value. These opportunities may include repurchasing some of the Company’s outstanding debt or common stock, increasing its shareholder dividend, accelerating capital investment in its existing business or new stores, or other opportunities that may become available.

“Our business remains well positioned to produce annual earnings growth over the next several years,” commented Mr. Serra. “The retail climate, however, remains challenging due to uncertain world events that have contributed to consumer confidence in the U.S. being at a nine-year low. Nevertheless, we remain committed to continuing our record of producing quarter-over-quarter earnings improvements.”

Foot Locker, Inc.’s ticker symbol on the New York Stock Exchange will be changed to “FL” from “Z”, effective with the beginning of trading on March 31, 2003.

                              FOOT LOCKER, INC.
                    Consolidated Statements of Operations
                                 (unaudited)
             Periods ended February 1, 2003 and February 2, 2002
                   (In millions, except per share amounts)

    FOURTH QUARTER
                      Fourth Quarter 2002            Fourth Quarter 2001
                Reported   Disposed      As    Reported    Disposed      As
                 Results  Operations  Adjusted  Results   Operations  Adjusted

    Sales         $1,214      --       $1,214    $1,155      $--       $1,155

    Cost of sales    845      --          845       806       --          806
    Selling,
      general and
      administrative
      expenses       253      --          253       236       --          236
    Depreciation
      and
      amortization    38      --           38        40       --           40
    Restructuring
      charge          --      --           --         1        1           --
    Interest expense,
      net              7      --            7         6       --            6
    Other income      --      --           --        (1)      (1)          --
                   1,143      --        1,143     1,088       --        1,088
    Income from
      continuing
      operations
      before
      income
      taxes           71      --           71        67       --           67
    Income tax
      expense         23      --           23        25       --           25
    Income from
      continuing
      operations      48      --           48        42       --           42

    Loss on disposal
      of discontinued
      operations,
      net of
      income taxes    --      --           --        (6)      (6)          --
    Net income       $48      --          $48       $36      $(6)         $42



    FULL YEAR            Full Year 2002                 Full Year 2001
                Reported   Disposed       As   Reported   Disposed       As
                 Results  Operations  Adjusted  Results   Operations  Adjusted

    Sales         $4,509     $--       $4,509    $4,379      $54       $4,325

    Cost of sales  3,165      --        3,165     3,071       37        3,034
    Selling,
      general and
      administrative
      expenses       928      --          928       923       29          894
    Depreciation
      and
      amortization   149      --          149       154       --          154
    Restructuring
      charge/(income) (2)     (2)          --        34       34           --
    Interest expense,
      net             26      --           26        24       --           24
    Other income      (3)     --           (3)       (2)      (1)          (1)
                   4,263      (2)       4,265     4,204       99        4,105
    Income from
      continuing
      operations
      before
      income taxes   246       2          244       175      (45)         220
    Income tax
      expense         84      --           84        64      (14)          78
    Income from
      continuing
      operations     162       2          160       111      (31)         142

    Loss on
      disposal of
      discontinued
      operations,
      net of
      income taxes   (18)    (18)          --       (19)     (19)          --
    Net income      $144    $(16)        $160       $92     $(50)        $142