Foot Locker, Inc. reported financial net income for the quarter was 42 cents per share, or $66 million, compared with 47 cents per share, or $74 million in the third quarter of last year. Income from continuing operations for the 2005 third quarter was 41 cents per share, or $65 million compared to 47 cents per share, or $74 million last year. Results from discontinued operations reflected revisions in estimates to discontinued reserves and a favorable income tax settlement totaling 1 cent per share, or $1 million, in the third quarter of 2005. Also included in this year's results were charges, net of credits, totaling 2 cents per share related to hurricanes, potential insolvency of one of the company's insurance administrators and the settlement of litigation proceedings.

For the third quarter period, sales increased 3.1% to $1,408 million this year compared with sales of $1,366 million in the year-ago period. Third quarter comparable-store sales increased 2.7%.

“Our business in North America was very solid during the third quarter, with strongest sales and profit increases posted by our Footaction, Champs Sports and Foot Locker Canada divisions,” stated Matthew D. Serra, Foot Locker, Inc.'s chairman and CEO. “Third quarter results were negatively impacted, however, by our increased promotional activity in Europe that resulted in a reduction in our inventory growth and allowed us to compete better in certain local markets.”

Year-to-Date Results

Year-to-date net income was $1.07 per share, or $168 million, compared with $1.31 per share, or $204 million last year. Income from continuing operations in the year-to-date period was $1.06 per share, or $167 million, versus $1.07 per share, or $166 million last year. Results from discontinued operations reflected the per share per share, or $1 million income, outlined above in the third quarter of 2005 versus an income tax benefit of 24 cents per share, or $38 million, included in last year's results.

Year-to-date sales increased 7.0% to $4,089 million compared with sales of $3,820 million last year. Comparable-store sales increased 2.2%.

Mr. Serra continued, “We expect that our fourth quarter comparable-store sales will continue to increase in the low-to-mid single digit range. Additionally, we do not expect to be as promotional in our European stores as we were during the third quarter, given that our inventories are now at more appropriate levels. Based upon this, we currently expect our income from continuing operations per share in the fourth quarter to be in the range of 53 cents to 61 cents, versus the 57 cents that we reported in the comparable prior year period. Last year's fourth quarter results included an income tax rate of 31.5% which provided a 5 cents per share favorable comparison to this year's 37% estimated rate.”

Operating Highlights

The company opened 18 new stores, remodeled/relocated 57 stores and closed 58 stores during the third quarter. At October 29, 2005, the company operated 3,886 stores in 20 countries in North America, Europe and Australia. The company also entered its 16th European country during the third quarter with a new store in Greece.

Financial Position/Dividend Increase

The company's financial position continues to strengthen, with its cash and short-term investment position at the end of the third quarter of $390 million and its cash and short-term investment position, net of debt, $160 million greater than at the same time last year. During the third quarter, the company repurchased 790,200 shares of its common stock for $17 million. To date, the company has spent $20 million of a $50 million board-authorized share repurchase program that expires in February 2006. The company expects its Board of Directors to consider the authorization of a new share repurchase program early in 2006.

As previously announced, on November 16, 2005, the company's Board of Directors increased Foot Locker, Inc.'s quarterly common stock dividend 20 percent from its previous amount to 9 cents per share, which is equivalent to an annualized rate of 36 cents per share. The increased dividend will be payable January 27, 2006 to shareholders of record on January 13, 2006.

                              FOOT LOCKER, INC.
               Condensed Consolidated Statements of Operations
                                 (unaudited)
             Periods ended October 29, 2005 and October 30, 2004
                   (In millions, except per share amounts)

                                                 Third Quarter  Third Quarter
                                                        2005            2004
    Sales                                            $1,408           $1,366

    Cost of sales (1)                                   978              940
    Selling, general and administrative expenses        280              270
    Depreciation and amortization  (1)                   46               39
    Interest expense, net                                 2                4
                                                      1,306            1,253
    Income from continuing operations before
     income taxes                                       113              102
    Income tax expense                                   37               39
    Income from continuing operations                    65               74

    Income from disposal of discontinued operations,
     net of tax                                           1               --
    Net income                                          $66              $74

    Diluted EPS:
    Income from continuing operations                 $0.41            $0.47
    Income from disposal of discontinued operations,
     net of tax                                        0.01               --
    Net income                                        $0.42            $0.47