Foot Locker, Inc. reported a net loss of $33 million, or 22 cents per share, for the third quarter this year compared with net income of $65 million, or 42 cents per share, last year. This year's results included a non-cash impairment charge to write down long-lived assets for Foot Locker's U.S. store operations and expenses associated with closing unproductive stores, totaling $66 million, after tax, or 43 cents per share. Third quarter net income would have been $33 million, or 21 cents per share without the charges.

Third quarter sales decreased 5.2%, to $1.356 billion this year compared with sales of $1.430 billion for the corresponding prior year period. Third quarter comparable-store sales decreased 5.0%.

“Our third quarter sales were disappointing, reflecting a challenging external environment and the lack of exciting fashion trends in athletic footwear and apparel,” stated Matthew D. Serra, Foot Locker, Inc.'s Chairman and Chief Executive Officer. “While our sales results fell short of our expectations, third quarter markdowns were approximately 12% lower than last year. Additionally, we continued to focus diligently on expense management.”

Year-to-Date Results

For the first nine months of the year, Foot Locker reported a net loss of $34 million, or 22 cents per share, compared with net income of $138 million, or 88 cents per share, last year. This year's results included a non-cash impairment charge pursuant to SFAS No. 144 and expenses associated with closing unproductive stores, totaling $66 million, after tax, or 43 cents per share. Last year's results included an impairment charge pursuant to SFAS No. 144 of $12 million, after tax, or eight cents per share. Year-to-date net income, before the non-cash impairment charges in 2006 and 2007, and the expenses of closing unproductive stores in 2007, was $32 million, or 21 cents per share this year, versus $150 million, or 96 cents per share, last year.

Year-to-date sales decreased 3.5% to $3,955 million compared with sales of $4,098 million last year. Comparable-store sales decreased 5.8%.

Financial Position

At the end of the third quarter, Foot Locker's cash and short-term investments totaled $332 million. Foot Locker's total cash position, net of debt, at the end of the third quarter increased by $70 million versus last year. Merchandise inventory was slightly higher at the end of the third quarter versus the comparable period of last year (less than one percent). Stated in constant currency dollars, the Company's merchandise inventory decreased by approximately three percent versus last year.

Store Base Update

Year-to-date, Foot Locker has opened 112 new stores, and remodeled or relocated 179 stores. During the month of September, Foot Locker opened its first store in Istanbul, Turkey. Foot Locker also closed 158 stores during the first nine months of this year, including 13 unproductive stores during the third quarter prior to normal lease expiration. At November 3, 2007, Foot Locker operated 3,896 stores in 21 countries in North America, Europe and Australia. In addition, 10 franchised stores are currently operating in the Middle East and South Korea.

During the fourth quarter of 2007, Foot Locker currently expects to open eight new stores and close up to 142 unproductive stores. Approximately 53 of the stores are expected to close prior to normal lease expiration, depending on the company's success in negotiating agreements with its landlords. The cash impact of the 2007 store closings is expected to be minimal, as the related cash costs are expected to be offset by associated inventory reductions.


                              FOOT LOCKER, INC.
               Condensed Consolidated Statements of Operations


                                 (unaudited)


             Periods ended November 3, 2007 and October 28, 2006


                   (In millions, except per share amounts)



                                                          Third        Third


                                                         Quarter      Quarter


                                                          2007         2006



    Sales                                                $1,356       $1,430



    Cost of sales                                           975        1,008


    Selling, general and administrative expenses            289          284


    Depreciation and amortization                            45           44


    Impairment charge & store closing program               105            -


    Interest expense, net                                     -            1


    Other income                                              -           (8)


                                                          1,414        1,329


    Income (loss) from continuing operations


     before income taxes                                    (58)         101


    Income tax expense (benefit)                            (24)          36


    Income (loss) from continuing operations                (34)          65


    Discontinued operations, net of tax                       1            -


    Net income (loss)                                      $(33)         $65



    Diluted EPS:


    Income (loss) from continuing operations             $(0.22)       $0.42


    Discontinued operations, net of tax                       -            -


    Net income (loss)                                    $(0.22)       $0.42


    Weighted-average diluted shares outstanding           153.6        156.8