FOOT LOCKER, INC. REPORTS FIRST QUARTER RESULTS

· Income from Continuing Operations Increased to $38 Million or $0.26 Per Share for First Quarter

· Debt, Net of Cash, Decreased to $119 Million from $283 Million Last Year

· Company Sets Full Year Earnings Guidance At $1.12-to-$1.15 Per Share

NEW YORK, NY, May 23, 2002 – Foot Locker, Inc. (NYSE: Z), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended May 4, 2002.

Income from continuing operations for the Company’s first quarter ended May 4, 2002, increased to $38 million, or $0.26 per share, compared with adjusted income from continuing operations of $34 million, or $0.24 per share, last year. For the 13-week first quarter period, sales increased 3.3 percent to $1,090 million this year compared with adjusted sales of $1,055 million last year. First quarter comparable-store sales increased 1.4 percent. Operating profit of $77 million in 2002 was flat compared with adjusted operating profit last year.

The Company’s financial position continued to strengthen, as debt, net of cash, was reduced to $119 million from $283 million last year. Additionally, the Company did not borrow under its $190 million unsecured revolving credit facility during its first fiscal quarter. Merchandise inventories remain on plan, very current and well positioned to support second quarter sales expectations.

During the first quarter, the Company opened 25 stores, remodeled/relocated 60 stores and closed 33 stores. For the full year, the Company expects to open at least 150 new stores, remodel or relocate over 200 existing stores and close approximately 80 under-performing stores. Therefore, the Company expects its total store count to increase by approximately 2 percent for the total year. At May 4, 2002 the Company operated 3,582 stores in 14 countries in North America, Europe and Australia.

“We are pleased that our first quarter 2002 results represent the 11^th consecutive quarter of adjusted EPS growth versus the same period of the prior year,” stated Matthew D. Serra, Foot Locker Inc.’s President and Chief Executive Officer. "We continue to make progress in growing our sales while strengthening our balance sheet, even in the face of what continues to be a challenging economy."

Mr. Serra concluded, "Although our first quarter sales and gross margin rate were negatively affected by certain high-end marquee shoes that did not sell up to expectations, which required higher than planned markdown activity, the progress we have made in instituting meaningful expense reductions and other appropriate initiatives has enabled us to achieve results in line with the guidance we provided. We expect these actions will continue to benefit our company for the balance of the year, and as such, we expect our sales and gross margin rate to improve during the second quarter with earnings of $0.22-to-$0.24 per share. For the full year, we now expect earnings of $1.12-to-$1.15 per share.

The Company also recorded a non-cash $18 million charge to discontinued operations during the first quarter of 2002 to reduce to zero the value of its net assets related to the Northern Group Canada stores, which were disposed of in 2001.

The Company is hosting a live conference call at 10:00 am (EDT) on Thursday, May 23, 2002. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 pm on Tuesday, May 28, 2002.

Operating profit reflects income before income taxes, corporate expense and income, and net interest expense.

Reported results are presented in accordance with accounting principles generally accepted in the United States of America. Adjusted results for 2002 are from continuing operations and are the same as reported results from continuing operations. Adjusted results for 2001 are from continuing operations and exclude the operations and disposition of The San Francisco Music Box Company and Burger King franchises. The reported results for all operations and a reconciliation between reported and adjusted results are attached to this press release.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements, which reflect management’s current views of future events and financial performance. These forward-looking statements are based on many assumptions and factors detailed in the Company’s filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company’s merchandise mix and retail locations, unseasonable weather, risks associated with foreign global sourcing, including political instability and changes in import regulations, economic conditions worldwide, and the ability of the Company to execute its business plans effectively with regard to each of its business units. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.

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FOOT LOCKER, INC.

Consolidated Statements of Operations

(unaudited)

Periods ended May 4, 2002 and May 5, 2001

(In millions, except per share amounts)


	First Quarter 2002			First Quarter 2001
	Reported Results	Disposed Operations	As Adjusted	Reported Results	Disposed Operations	As Adjusted
Sales	$1,090	$ --	$1,090	$ 1,072	$ 17	$ 1,055

Cost of sales	770	--	770	746	11	735
Selling, general and administrative expenses	220	--	220	231	9	222
Depreciation and amortization	36	--	36	38	--	38
Interest expense, net	7	--	7	4	--	4
	1,033	--	1,033	1,019	20	999
Income from continuing operations before income taxes	57	--	57	53	(3)	56
Income tax expense	19	--	19	21	(1)	22
Income from continuing operations	38	--	38	32	(2)	34

Income (loss) on disposal of discontinued operations, net of income tax benefit	(18)	(18)	--	5	5	--
Net income	$ 20	$ (18)	$ 38	$ 37	$ 3	$ 34

Diluted EPS:
Income from continuing operations	$0.26	$ --	$0.26	$ 0.23	$(0.01)	$ 0.24
Income (loss) from discontinued operations	(0.12)	(0.12)	--	0.04	0.04	--
Net income	$0.14	$(0.12)	$0.26	$ 0.27	$ 0.03	$ 0.24

Weighted-average diluted shares outstanding	150.9	150.9	150.9	139.7	139.7	139.7

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FOOT LOCKER, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(In millions)

	May 4, 2002		May 5, 2001
Assets

CURRENT ASSETS
Cash and cash equivalents	$ 278		$ 29
Merchandise inventories	839	7	786
Assets of discontinued operations	3		31
Assets held for sale	--		86
Other current assets	86		109
	1,206		1,041