Foot Locker (FL)

Gross Margin

     Gross margin as a percentage of sales was 27.9 percent in 2008 increasing 180 basis points as compared with 2007. The increase in the gross margin represented an increase of 230 basis points in the merchandise margin rate reflecting lower markdowns. Lower sales in 2008 resulted in the occupancy rate increasing by 50 basis points, as a percentage of sales. The effect of reduced vendor allowances was not significant as compared with 2007.

     Gross margin as a percentage of sales was 26.1 percent in 2007 declining 410 basis points as compared with 2006. Gross margin, as a percentage of sales, was negatively affected primarily by incremental markdowns, of 180 basis points, taken to liquidate slow-moving and excess inventory and the effect of reduced vendor allowances, which negatively affected gross margin by approximately 60 basis points, as compared with 2006. Lower sales in 2007 resulted in the occupancy rate increasing by 160 basis points, as a percentage of sales.

Gross
Margin

     Gross margin as a percentage of sales was 27.9 percent in 2008 increasing
180 basis points as compared with 2007. The increase in the gross margin
represented an increase of 230 basis points in the merchandise margin rate
reflecting lower markdowns. Lower sales in 2008 resulted in the occupancy rate
increasing by 50 basis points, as a percentage of sales. The effect of reduced
vendor allowances was not significant as compared with 2007.

     Gross margin as a percentage of sales was 26.1 percent in 2007 declining
410 basis points as compared with 2006. Gross margin, as a percentage of sales,
was negatively affected primarily by incremental markdowns, of 180 basis points,
taken to liquidate slow-moving and excess inventory and the effect of reduced
vendor allowances, which negatively affected gross margin by approximately 60
basis points, as compared with 2006. Lower sales in 2007 resulted in the
occupancy rate increasing by 160 basis points, as a percentage of
sales.

Gross
Margin

     Gross margin as a percentage of sales was 27.9 percent in 2008 increasing
180 basis points as compared with 2007. The increase in the gross margin
represented an increase of 230 basis points in the merchandise margin rate
reflecting lower markdowns. Lower sales in 2008 resulted in the occupancy rate
increasing by 50 basis points, as a percentage of sales. The effect of reduced
vendor allowances was not significant as compared with 2007.

     Gross margin as a percentage of sales was 26.1 percent in 2007 declining
410 basis points as compared with 2006. Gross margin, as a percentage of sales,
was negatively affected primarily by incremental markdowns, of 180 basis points,
taken to liquidate slow-moving and excess inventory and the effect of reduced
vendor allowances, which negatively affected gross margin by approximately 60
basis points, as compared with 2006. Lower sales in 2007 resulted in the
occupancy rate increasing by 160 basis points, as a percentage of
sales.

Gross Margin

     Gross margin as a percentage of sales was 26.1 percent in 2007 declining 410 basis points as compared with 2006. Gross margin, as a percentage of sales, was negatively affected by incremental markdowns of 180 basis points taken to liquidate slow-moving and excess inventory and the effect of reduced vendor allowances negatively affected gross margin by approximately 60 basis points, as compared with 2006. Lower sales resulted in the occupancy rate increasing by 160 basis points, as a percentage of sales, as compared with the prior-year period.

     Gross margin as a percentage of sales was 30.2 percent in 2006; excluding the effect of the 53^rd week, gross margin would have declined 20 basis points as compared with 2005. This reflected increased promotional activity, offset, in part, by the effect of increased vendor allowances. The effect of these vendor allowances was an improvement in gross margin in 2006, as a percentage of sales, of 20 basis points as compared with 2005. Additionally, gross margin was negatively affected by lower sales, which resulted in increased occupancy costs, as a percentage of sales.

Gross
Margin

     Gross margin as a percentage of sales was 26.1 percent in 2007 declining
410 basis points as compared with 2006. Gross margin, as a percentage of sales,
was negatively affected by incremental markdowns of 180 basis points taken to
liquidate slow-moving and excess inventory and the effect of reduced vendor
allowances negatively affected gross margin by approximately 60 basis points, as
compared with 2006. Lower sales resulted in the occupancy rate increasing by 160
basis points, as a percentage of sales, as compared with the prior-year period.

     Gross margin as a percentage of sales was 30.2 percent in 2006; excluding
the effect of the 53^rd week, gross margin would
have declined 20 basis points as compared with 2005. This reflected increased
promotional activity, offset, in part, by the effect of increased vendor
allowances. The effect of these vendor allowances was an improvement in gross
margin in 2006, as a percentage of sales, of 20 basis points as compared with
2005. Additionally, gross margin was negatively affected by lower sales, which
resulted in increased occupancy costs, as a percentage of sales.

Gross Margin

     Gross margin as a percentage of sales was 30.2 percent in 2006; excluding the effect of the 53^rd week, gross margin declined 20 basis points as compared with 2005. This reflects increased promotional activity, offset, in part, by the effect of increased vendor allowances. The effect of these vendor allowances was an improvement in gross margin in 2006, as a percentage of sales, of 20 basis points as compared with 2005. Additionally, gross margin was negatively affected by lower sales, which resulted in increased occupancy costs, as a percentage of sales.

     Gross margin as a percentage of sales was 30.2 percent in 2005, decreasing by 30 basis points from 30.5 percent in 2004. This decline was primarily the result of increased markdowns recorded by the European operation. The effect of vendor allowances on gross margin, as a percentage of sales, as compared with the corresponding prior year period was not significant.

Gross Margin

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