The Company’s merchandise inventory at the end of the second quarter was 1.6 percent lower than at the end of the second quarter last year. Stated in constant currency dollars, the Company’s merchandise inventory decreased 3.2 percent versus last year. Merchandise inventory in the Company’s U.S. stores was approximately 4 percent lower than last year, with goods older than 12 months reduced from last year by approximately 40 percent. At the Company’s international stores, merchandise inventory was essentially flat with last year.

Store Base Update
During the first six months of the year, the Company opened 78 new stores, remodeled/relocated 129 stores and closed 115 stores. At August 4, 2007, the Company operated 3,905 stores in 20 countries in North America, Europe and Australia. In addition, seven franchised stores were operating in the Middle East. During the first week of the third quarter, the Company converted its Footquarters stores to Foot Locker and Champs Sports outlet stores.

During the next six months of 2007, the Company currently expects to open approximately 40 stores and, as previously announced, close 135 to 150 unproductive stores. Approximately 90 of the estimated store closings are expected to occur at or near their normal lease expiration and have minimal or no expense impact to the Company. Depending on the outcome of landlord negotiations, 50 to 60 of the stores are expected to close prior to normal lease expiration. The cash costs associated with closing these 135 to 150 stores are expected to be essentially offset by the cash benefits of the working capital reduction.

Mr. Serra continued, “Given the uncertainty of several factors that may affect our financial results, we are not providing a financial forecast for the balance of the year at this time. These uncertainties include the current challenging athletic retail environment in the U.S. and incremental costs associated with the closing of the additional stores. In addition, we will continue to assess the impact of the recent merchandise initiatives on the financial results of our domestic businesses during the fall 2007 season. This assessment may include an analysis of the recoverability of store long-lived assets pursuant to SFAS 144 that may result in a non-cash impairment charge.”

The Company is hosting a live conference call at 10:00 a.m. (ET) on Thursday, August 23, 2007 to discuss these results. 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 p.m. on Friday, September 7, 2007.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues and earnings, and other such matters are forward-looking statements. 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, the Company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), unseasonable weather, economic conditions worldwide, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business plans effectively with regard to each of its business units, risks associated with foreign global sourcing, including political instability, changes in import regulations, and disruptions to transportation services and distribution. 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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