John A. Maurer - Vice President, Treasurer And Head Of Investor Relations Lauren B. Peters - Chief Financial officer and Executive Vice President Kenneth C. Hicks - Chairman, Chief Executive Officer, President, Chairman of Executive Committee and Member of Retirement Plan Committee

John Zolidis - Buckingham Research Group Incorporated Rafe Jadrosich - BofA Merrill Lynch, Research Division Kate McShane - Citigroup Inc, Research Division Paul Trussell - Deutsche Bank AG, Research Division Bernard Sosnick - Gilford Securities Inc., Research Division Michelle Tan - Goldman Sachs Group Inc., Research Division Vincent Esposito - Canaccord Genuity, Research Division Sam Poser - Sterne Agee & Leach Inc., Research Division Michael Binetti - UBS Investment Bank, Research Division Christopher Svezia - Susquehanna Financial Group, LLLP, Research Division

Good morning, ladies and gentlemen,, and welcome to the Fourth Quarter 2011 Earnings Release Conference Call. [Operator Instructions] This conference call may contain forward-looking statements that reflect the management's current views of future events and financial performance. These forward-looking statements are based on many assumptions and factors, including the effects of currency fluctuations, customer preferences, economic and market conditions worldwide and other risks and uncertainties described in the company's press releases and SEC filings. We refer you to Foot Locker, Inc.'s most recently filed Form 10-K or Form 10-Q for a complete description of these factors. Any changes in such assumptions or factors could produce significantly different results, and actual results may differ materially from those contained in the forward-looking statements. If you have not received yesterday's release, it is available on the Internet at www.prnewswire.com or www.footlocker-inc.com. Please note that this conference is being recorded. I will now turn the call over to John Maurer, Vice President, Treasurer and Investor Relations. Mr. Maurer, you may begin. John A. Maurer: Thank you, and welcome to Foot Locker's Fourth Quarter 2011 Earnings Release Conference Call. The fourth quarter results we reported yesterday afternoon include net income of $81 million or $0.53 per share on a GAAP basis. This represents an increase of 47% over the $0.36 per share we earned in the fourth quarter of 2010. It also represents our eighth consecutive quarter of sales and profit increases over the comparable prior year period. Our fourth quarter results include net noncash charges of $0.02 per share in 2011 and $0.03 a share in 2010, both primarily related to non-amortizing intangible assets of our CCS business. We have excluded these charges in a non-GAAP comparison that was included in yesterday's press release. And during the course of the call, we intend to refer primarily to the non-GAAP results. On this non-GAAP basis, we earned $0.55 per share in the fourth quarter of 2011 versus $0.39 per share a year ago, an increase of 41%. On a GAAP basis for the full year, we earned a record $278 million, equivalent to $1.80 per share, an increase of 68% over last year's earnings of $1.07 per share. On a non-GAAP basis, we earned $1.82 per share, 65% higher than 2010. Lauren Peters, Executive Vice President and Chief Financial Officer, will start off our prepared remarks this morning with additional details about our fourth quarter financial results. Ken Hicks, our Chairman and CEO, will then discuss various aspects of the success we are having as we implement the key initiatives of our strategic plan. Before we get to your questions at the end, we will provide some initial perspectives on the outlook for 2012. However, keep in mind that we are hosting an investor meeting at our New York offices on Tuesday at 9:00 a.m. During that meeting, which will also be webcast, we will provide an update to our long-range strategies and financial goals. So we ask that you please focus your question today primarily on our 2011 results for the near-term outlook. With that, let me now turn the program over to Lauren Peters. Lauren B. Peters: Thank you, John, and good morning to you all. We did indeed have another strong results in the fourth quarter, posting non-GAAP earnings of $0.55 per share. This result brought our non-GAAP full year earnings to $1.82 per share, a record for athletics business, and one which all our associates can be very proud of. To review how we achieved these results, let's start as usual with sales. We achieved a 7.5% comparable sales increase in the fourth quarter on top of our 7.3% comp increase in Q4 2010. The 14.8% 2 years stack increase was similar to the mid-teens stacked comp we posted through the third quarter this year. For the full year, we posted a strong 9.8% comparable sales increase. Total sales for the full year, which were helped by stronger foreign currencies but reduced by net store closures, were up 11.4%. Almost all of our divisions recorded comp sales increases in the fourth quarter. Our Direct-to-Customers segment led the way with a 16% gain. Excluding ccs.com, which was the only division with a comp loss, the rest of the segments, which includes Eastbay and our store banner dot-com sites, was up more than 20%, a level achieved in all 4 quarters of the year. Among the store divisions, Champs Sports delivered a very strong year with a Q4 comp gain in the mid-teens, successfully comping against a similarly strong gain last year. Foot Locker in the U.S. was up high single digits, as were Foot Locker Canada and Foot Locker Asia-Pacific. Total sales in Foot Locker Europe were up mid single digits in the fourth quarter, although the comp gain was only slightly positive. European consumers, especially our target young customers, continued to be challenged by slow or negative economic growth and high unemployment. The quarter played out with the strongest comp gain in December, but each of the months in the quarter delivered at least strong mid single digit growth. All families of business had solid comp gains with apparel and accessories once again achieving double-digit gains. Within footwear, Men's and Kids posted high single digit gains, while our Women's business was flat. In Men's, we produced healthy increases across our major categories of basketball, running and casual. Even our boot business posted a gain overall despite warmer-than-average temperatures in many of our markets. Apparel comp gains in the fourth quarter were in the low double digits. We have found success in utilizing our apparel presentations to highlight the banner differentiation we have worked hard to execute. By improving the apparel assortments and in-store displays, we find that we can sell both more apparel and more shoes. Almost all the brands have done a good job improving the hookup of their shoes and apparel, with an excellent example of being the Adicolor program from Adidas and Champs. Our gross margin rate increased by 110 basis points on the fourth quarter, off the pace from the first 3 quarters of the year, but solid nonetheless given the improvements from last year that we have begun to anniversary. Most of the gain, 100 basis points, was due to the leveraging of our predominantly fixed buying and occupancy expenses. 10 basis points of the gross margin expansion was due to merchandise margin improvement. Across our divisions, our merchandise margin performance ran in a fairly tight range, with small gains and declines by banner, family of business and region. Overall, we made more progress in footwear and accessory margins than apparel margins. One call-out in apparel is the branded apparel outperformed, which should be our higher-margin private label business. While this dynamic helps top line sales, it holds back apparel margins. As a result, while margins rose overall, we did not close the gap between footwear and apparel margins during the quarter. We will continue to work on opportunities for incremental margin improvements in both categories. SG&A expense improved 20 basis points in the fourth quarter, from 21.8% of sales to 21.6%. On a dollar basis, SG&A expense increased $22 million, including $7 million for our elevated marketing program, which we believe have been successful in bringing the right customers into our stores and onto our website. The remainder of the increase was primarily a function of variable expenses, such as store wages and supplies that flexed up with higher sales. We recorded an after-tax charge of $3 million in the fourth quarter of 2011 to write down the value of intangible assets acquired as part of our investment in the CCS business in 2008. We incurred a similar $6 million charge, also related to CCS in the fourth quarter of 2010. The charge in 2010 was partially offset by the recovery of a portion of the short-term investment that had been written down in 2008. As of year end, approximately $10 million of non-amortizing intangible assets related to CCS remain on our books. Depreciation expense for the fourth quarter was $28 million, up $1 million from the same quarter last year. For the full year, depreciation was $110 million, up from $106 million last year, reflecting the strategic long-term investments we are making in many parts of our business. As we have mentioned throughout the year, these investments include opening new stores in Europe, maintaining and remodeling our existing fleet of stores, enhancing our digital capabilities, and developing various systems to make us more operationally efficient. Our fourth quarter effective income tax rate came in somewhat lower than expected at 34%, bringing our full year rate down to 36%, better than our previously estimated annual tax rate of 37%. The improvement was primarily attributable to one-time tax audit settlements and true-up adjustment. As I mentioned at the beginning of my remarks, the sum of all this was non-GAAP earnings of $0.55 per share for the quarter and $1.82 for the full year. Looking at some of our long-term financial goals, we came close on several key P&L objectives. On our path to achieving sales of $6 billion, we delivered a strong 9.8% comp gain for the year to reach sales of $5.6 billion, up from $4.8 billion when we established those goals 2 years ago. We ended the year with 3,369 stores, down 57 from the beginning of the year. Almost 2/3 of the 70 new stores we opened this year were in international markets, while the majority of the 127 stores we closed were in the U.S. Of course, the benefit of eliminating unproductive stores is that it enabled us to make further progress on other financial metrics. For example, we achieved an EBIT margin of 7.9%, our best ever and just short of our long-term objective of 8%. In addition, we delivered a net income margin equal to our long-term goal of 5%. From a balance sheet perspective, we significantly elevated the productivity of our largest and most important asset, our inventory. Merchandise inventory dollars were up less than 1% at year end even with the consistently strong sales gains we produced throughout the year. Inventory turns are improving, and we ended 2011 with inventory aging at record levels of freshness across the company. We continue to position ourselves well to respond to the strong demand we see in the marketplace for athletics, footwear and apparel and see no near-term risk of inventory becoming too lean. In fact, within the year-end inventory figure were some receipts we brought in early, specifically to help drive February sales results, which I am pleased to report comped up in the mid-teens on top of last year's strong 11.6% comp gain in February. We ended the year with $851 million of cash and short-term investments, an increase of $155 million from the end of last year. This increase was achieved even though we accelerated both our investment in the business and our initiative to return cash to our shareholders. We spent $152 million in capital in 2011, slightly below the plan of $160 million that we set at the beginning of the year. The shortfall is mainly the result of timing in the completion of certain projects, most of which will be completed in early 2012. Over the past 2 years, we have significantly improved the return on the capital we are investing in our business, having hit an ROIC total of 11.8% in 2011, up from just 5.3% in 2009 and above our 5-year plan target of 10%. The combination of all the productivity initiatives that we have undertaken and discussed with you throughout 2011 has reduced our investment base at the same time that we have significantly elevated the return part of the ROIC equation. As a result, we are earning in excess of our 9% estimated cost of capital. In terms of returning cash to shareholders, we paid $101 million in dividends in 2011, having increased our annual dividend rate by $0.06 or 10% at the beginning of the year. Last month, we announced an additional 9% increase on our quarterly dividend to $0.18 per quarter. At the same time, we also announced a new $400 million share repurchase program, replacing the prior $250 million program. We have spent approximately $153 million repurchasing shares under the prior program, including $104 million in 2011, which brought in 4.9 million shares. Clearly, our liquidity position allows us the flexibility to continue executing these 3 main elements of our capital allocation strategy: direct investments in our business; dividends; and share repurchases. With that summary, let me turn over the call to Ken, who will provide additional perspective on our accomplishments in Q4 and 2011. Kenneth C. Hicks: Thank you, Lauren, and good morning. Let me also thank everyone for participating on the call this morning. In the fourth quarter, we posted our eighth consecutive quarter of meaningful sales and profit increases, a record of consistency which our entire team of associates is very proud of and, more importantly, focused on continuing. We started 2 years ago by creating a vision, to be the leading global retailer of athletically inspired footwear and apparel. We developed a set of 6 clear strategies, as well as detailed initiatives for accomplishing each strategy, and we established some key financial goals to help us measure our success. But we went beyond that. To harness the power of the entire organization, we knew we couldn't confine our work to a presentation given once and then kept on the shelf to gather dust or reported on to the board once a year. Instead, we continually communicated our vision, strategy and goals to every associate in the company, in every store, distribution center and staff location. The strategies were made clear and straightforward so that each person could see how, what they do fits into the big picture. As a result, we've begun to see the true strength of the Foot Locker team when we all pulled together for the same goals. A year ago, I characterized our 2010 results as being an inflection point in creating sustainable, increased value for our shareholders. I now believe 2010 was a springboard toward the higher level of performance we achieved in 2011. The strategies our team identified and began implementing 2 years ago have elevated our financial and operational performance to new heights. First, we have defined and differentiated our banners by broadening our product assortments. We continue to be the leading destination for basketball, a category that is growing in terms of both its performance and lifestyle appeal. Marquee basketball was highlighted in the quarter by the Jordan Concord launch just before Christmas. The basketball has grown into a year-round business on the strength of several key active star players, most of whom such as LeBron, Kobe, Rose, KD, Howard and Chris Paul are all playing quite well this season. During the same time that we solidified our position in basketball, we also built a more powerful running selection. While we've always been a strong player in running, our efforts have made us a much stronger, more significant player in this category. During the quarter, we had especially good results from the Max Air programs from Nike, as well as their Lightweight, Free and Lunar lines. Our core vendors, including Nike, Adidas and Reebok, are doing well. In addition, our performance running vendors, such as New Balance, ASICS, Brooks and Saucony, are also bringing excitement to the running category. We've also grown our offering of casual footwear. We had standout performances from Jordan Classics, Converse and Adi classics such as the Samoa. Retro style such as the Griffey, Nomo and others are also doing well. We have just begun our efforts to tell exciting and effective marketing stories that bring customers to our banners. For example, Foot Locker's position this past month of February is the hottest month ever. And as Lauren mentioned, we had double-digit sales gains on top of the double-digit gains we produced last February. Second, we've begun building our apparel assortments to be much stronger and we've achieved year-over-year apparel growth in the teens, including this quarter. We've had particular success, again, as Lauren mentioned, partnering with the key brands to deliver improved branded apparel assortments tailored to appeal to the target customers of each of our banners and each of our store locations. We've also taken meaningful steps to elevate our private label apparel and had some success, such as with our Actra Women's brand and Champs Sports gear, but we're still learning and developing this business and we have opportunities to improve in many areas. Third, we continue to make our stores and digital sites more exciting places to shop and buy. In many of our stores, we've realigned the presentation of product along the shoe walls and on the floor in order to increase productivity. And we've integrated our apparel assortments with a footwear in order to tell compelling functionality and color stories. We're testing an exciting new store format in Champs, and we're designing a new format for Foot Locker in the United States. We also opened our first Locker Room store in Brent Cross outside London in the fourth quarter. The store is not far from some of the venues for the upcoming summer Olympic Games in the U.K. The Locker Room is focused on performance product rather than fashion, and we're excited about these prospects. In the digital world, we've upgraded the features and functionality of our Internet mobile sites, significantly improving the cross channel experience. Our customers are increasingly comfortable, switching back and forth between our stores and online, in their relationship with us. And we continue to innovate in order to deepen our connection with them. These innovations have been recognized by others. For example, our Eastbay site has been recognized by Internet Retailer magazine as the best mobile optimized site of the top 100 internet retailers. And the Sneakerpedia website that we launched last year won the Gold Lions Award in the Cyber category at the 2011 Cannes of Festival Creativity. Just last week, we relaunched our ccs.com website and continue to take steps to strengthen that brand with a strong board lifestyle approach. Fourth, we said we would aggressively pursue growth opportunities, and we have. We have driven strong double-digit growth in our store banner dot-com sales all year, including the fourth quarter. Our total Direct-to-Customers segment posted sales that were about 11% of total sales in the fourth quarter, a new high. We had over 64 million visitors to our websites in the quarter, and we have millions of fans on our Facebook and Twitter sites. Backing out Eastbay from the Direct-to-Customer total suggests that we still have plenty of opportunity to increase the penetration of our online business. We also accelerated our new store openings in Europe, including entering our 23rd country, Poland, in December. Our House of Hoops shops have also been quite successful, and we now operate more than 50 of these stores, including several in key international markets. Fifth, our productivity metrics have improved across the board. Lauren mentioned some of them. But in addition, we achieved sales of $406 per gross square foot, ahead of our $400 long-term objective. We also saw improvements in such measures as customer conversion, sales per payroll hour and profit flow-through. Through a combination of improved in-store results and closing underperforming stores, we significantly improved the productivity of our fleet. Sixth and finally, we built on our industry-leading retail team. One of the things I'm especially proud of is how seamlessly we executed the major leadership changes announced during the summer of 2011 to better position us for the future. We have a deep management lineup. Nonetheless, we have upgraded key talent management processes, such as executive development and succession planning in both field and our headquarter's organizations. We've revamped associate selling skills training, focused on meeting our customer needs and above all, we've developed, communicated and reinforced our company's core values. That, in a nutshell, is what we did over the last couple of years. We posted very strong financial results in 2011, which was the best year in our company's history as Foot Locker, Inc. But I realize that what you want to know about, what's really important to you, is the future. As John mentioned and I'm sure most of you know, we're hosting an investor meeting and webcast this coming Tuesday, at 9:00 a.m., to discuss our new goals for the future and the evolution of the strategies that we will execute to achieve these goals. I'm not going to scoop that meeting, but before we get to your questions, I'd like to let Lauren discuss some of our early thoughts on 2012. Lauren B. Peters: Thanks, Ken. Let me start by saying that one of our key goals for 2012 was to produce double-digit percentage profit growth for the full year and for each individual quarter compared to 2011. The goal is not dependent on the fact that 2012 includes a 53rd week, which should add about $0.10 per share to our fourth quarter and full year 2012 results. We've had a very strong sales run over the past 2 years. So looking ahead, we are planning 2012 comp gains in the mid single digit range. We have planned for all of our divisions to be comp positive for the year. The only division that is significantly off that mark right now is Foot Locker Europe, which has gotten off to a difficult start in the quarter. Comps in Europe are running down high single digits, but we believe some of these results is due to exceptionally cold and snowy weather in Europe recently, which led to numerous store closures. We remain optimistic for the current year with new product, expanded assortments that are selling well and major sporting events taking place in Europe all likely to support our business. We are also confident about the long-term prospects of our profitable European business. We are planning for a 30 to 40 basis point gross margin gain in 2012 based on a 52-week year. We expect to continue to leverage our fixed costs. However, incremental merchandise margin gains will take time, given the tremendous strides we have already made over the past 2 years and the less than robust economic conditions we faced, especially in our biggest markets, the U.S. and Europe. Fortunately, the lean inventory position that I mentioned earlier enables us to maintain the flow of exciting new products from a wide variety of vendors, including Nike, Adidas, Reebok, Converse, ASICS, Under Armour, New Balance and several others. We intend to build on a solid foundation of improvements we have made in merchandise flow, which should keep markdown rates low and margins up. As always, we will control our expenses carefully, SG&A expense as a percent of sales improving 60 to 80 basis points, but we are not planning to scrimp on telling our brand stories or investing in our business. Our capital program in 2012 is planned to be about $160 million. We plan to open 82 new stores and close 75 stores in 2012, which would be the first time in many years that we open more stores than we close. We expect depreciation to be about the same level in 2012 as it was in 2011, around $110 million depending on exchange rates. Finally, our 2012 tax rate is planned at 37%. With that outlook, I'll turn the call back to Ken. Kenneth C. Hicks: Thanks, Lauren. To add some color to the numbers that Lauren just gave you, let me say that we're excited about the way 2012 is shaping up. As mentioned, February was a hot month, getting us off to a fast start with a lot of really strong basketball releases from Nike, Jordan and Adidas. Meanwhile, the basketball business -- the base basketball business is also doing very well. Our technical and performance running businesses, including lightweight, are strong as is the casual business. We see a lot of exciting innovations still to come in all of these footwear categories in terms of fabrications, colorways, silhouettes and treatments. As we noted, our apparel business is getting better in almost all of our divisions and we intend to apply the lessons we're learning in order to maintain this momentum. Our accessories business is also solid, with a strong demand for Nike Elite Socks, Snapback hats from New Era and other key performance and lifestyle products. Before I get to your questions, let me wrap up our prepared remarks by once again acknowledging the tremendous effort and teamwork of all of our associates during 2011. As a result of their hard work, we approached or surpassed many of the peak financial and operating metrics the company has ever achieved at Foot Locker. While we salute a very good performance in 2011, a win, if you will, one of the key strengths of our team is its clear focus on the future and wanting to win consistently. We see opportunities for improvement in many areas of our business, and we recognize that some other retailers have even better metrics than we do in certain areas. We want to seize our opportunities, win again, and become a true champion. Thank you. Operator, let's open the call now for questions, if you will.

[Operator Instructions] And our first question comes from John Zolidis from Buckingham Research. John Zolidis - Buckingham Research Group Incorporated: A couple of questions. One, could you give us the cash flow metrics, both operating cash flow and free cash flow for the year? And then in that context, could you discuss why the share repurchase hasn't been more aggressive? And then the second question is on just the merchandise margins and the private label apparel business and can -- maybe a little flesh out a little bit more whether you still see 100 bps or -- of opportunity there over the long term. Kenneth C. Hicks: I'll let Lauren talk about the cash flow for 2011. Do you have it? Lauren B. Peters: John is going take the cash flow over '11. Kenneth C. Hicks: Okay. while we're pulling up some numbers, on the stock buyback, we constantly evaluate what is appropriate -- the appropriate level and we make those decisions on an ongoing basis. And we decided what we bought in the fourth quarter was the appropriate amount. And we will continue to make those evaluations as we go forward based upon what we think is appropriate. John A. Maurer: And so the free cash flow total in 2011 was around $338 million. And you also asked, John, about the operating cash flow, did you? John Zolidis - Buckingham Research Group Incorporated: Yes, if you have it. John A. Maurer: Yes, it's about $490-ish. Kenneth C. Hicks: The merchandise margin opportunity is going forward. Obviously, between 2010 and 2011, we made a number of promotional changes that were positive on the merchandise margins. And most of those events are out of the system. And we see continued merchandise margin opportunities as we go forward that are coming from working with our vendors on product, on better sell-throughs, and doing a better job in planning and allocating product. And one of the things that we're doing now is looking at what we can do to improve the allocations and planning systems that we have. And that's something that is -- we talk about our future strategy that we'll be working on. Lauren, I don't know if you have any -- and then the other thing is, obviously, leverage based upon on our sales. Lauren B. Peters: Yes, that clearly delivers a lot. John A. Maurer: By the way, I have an exact number for the operating cash flow for 2011. It's at $497 million.

Our next question comes from the line of Robby Ohmes from Bank of America Merrill Lynch. Rafe Jadrosich - BofA Merrill Lynch, Research Division: This is a actually Rafe Jadrosich on behalf of Bobby. Just in terms of your comp guidance for next year, can you just give a breakout of your assumptions for ASP versus unit? Kenneth C. Hicks: We see both growing. Rafe Jadrosich - BofA Merrill Lynch, Research Division: Got it. And then have you seen any resistance to price increases so far through, I guess, the first half of this year? Kenneth C. Hicks: Not -- the customer continues to buy the shoes and where we've taken price increases. And obviously, we've seen more as each months goes by. The customer has responded favorably, as indicated by our February results. Rafe Jadrosich - BofA Merrill Lynch, Research Division: And the last question, can you just give a little more color about what's driving the strength at Champs? I mean, and do you see a bigger opportunity with the NFL license switching over to Nike in April? Or would you be adding more NFL licensed apparel? Kenneth C. Hicks: With Champs, Champs has obviously been a strong division for us and they are the one that's probably furthest ahead on a number of our initiatives, including the growth of apparel presentation and new formats in the stores. So that's one of the things that makes us optimistic about our growth as we learn from them and apply some of those measures in the other divisions. We think that Nike will reinvigorate the NFL franchise. And we've seen the merchandise. It looks very, very good and very exciting. And we are very proud to be a partner with them as they launch the product, and we feel that we'll be a major player with them.

Our next question comes from Kate McShane from Citi Investment Research. Kate McShane - Citigroup Inc, Research Division: You had mentioned on the last call, Ken, that there's still a lot of room for productivity improvement and inventory despite the negative delta between inventory and sales growth. I think you indicated that again today. Can you give us some more detail on what you expect over the next few quarters with inventory trends? And how much more room do you have to go in reaching your productivity goal? Kenneth C. Hicks: Well, as we've said, we are working to get our overall turnup over 3%, and we've moved now basically from 2% to 2.5% this year. And we see the opportunity to do that in working with our vendors, in doing a better job in flowing the merchandise -- Lauren has been a leader in that effort, and in making sure that we have the right systems and tools. And we're doing that as we implement business intelligence systems and look at new planning and allocation systems. We see the opportunity as we increase our dot-com business, and it becomes a bigger proportion of our business that, obviously, provides turn opportunity there, and as we continue to grow our apparel business, because apparel has a faster turn now for us than shoes do. So there are still a number of things that will allow us to be more productive with our inventory without hurting sales. In fact, it should help sales as we get more of the right goods in the right store at the right time with the right size and the right quantity. Lauren B. Peters: We're able to reduce the lead time. I mean, the time from placing the order to selling it to a customer. We're getting closer to demand. That will help. Kenneth C. Hicks: So the improved turns will help sales and help productivity. Kate McShane - Citigroup Inc, Research Division: Okay, great. And then my second question is on investment in your online business in 2012. Will we see more SG&A dollars and/or CapEx dollars go to enhancing your online platform this year? Kenneth C. Hicks: Yes, I think you'll continue to see us develop that business more. We've done -- made some significant changes to our online sites, and we continue to work to make them more exciting, more interactive with the customer, more connected to the stores. And so as I've said, we've gotten some recognition, but the real recognition is coming from the customers. They shop more online and connected more with what we do, both online and in the stores.

Our next question comes from Paul Trussell from Deutsche Bank. Paul Trussell - Deutsche Bank AG, Research Division: Last quarter, Ken, you mentioned the white format at Lady Foot Locker. Could you just give us an update on that test? And also, with the new Champs prototype and you mentioned also one for Foot Locker, when can we look forward to these remodels potentially being rolled out? Kenneth C. Hicks: Well, we'll talk more about them on Tuesday but -- the white format at Women's -- or at Lady Foot Locker was good, but we think that we probably need to take it beyond that. And we're looking at exactly what that is. We've done some pretty extensive research over the last few months, and we'll be talking more about that on Tuesday. But let it be said that we are going to make a major effort in Women's, and it will involve how the stores look and what they are. With regard to Champs, we've been very pleased with the prototype and we've done exactly what you do with a prototype. You work the bugs out, and we plan to put up about 1 dozen -- or I'm sorry, about 10 more test stores this spring. And so we'll get an evaluation, see how they work and make a financial determination on how fast we should roll out that effort. We are putting in place a couple of prototypes for the Foot Locker store later this spring. And once we've worked the bugs out of them, we'll do the same thing and test and then determine how and what to roll out. Paul Trussell - Deutsche Bank AG, Research Division: Thanks for that color. And just one other. In terms of fourth quarter merchandise margins, could you just comment on what was the impact from, I would believe, softer sales from cold weather items like fleeces and boots, et cetera? Kenneth C. Hicks: Actually, we don't sell a lot of outerwear. And as I think Lauren said, our boot business, while not quite as robust as we would have liked, was still positive. Lauren B. Peters: Positive. Kenneth C. Hicks: Yes. So we did okay in boots. We don't have a lot of outerwear in the U.S. We do in Canada and -- but the fleece actually worked very, very well because it was great fleece weather. So it helped our apparel business in keeping it in the double digits. And we didn't have -- we had some things that we had to clear but overall, it was not a big issue.

Our next question comes from Bernard Sosnick from Gilford Securities. Bernard Sosnick - Gilford Securities Inc., Research Division: With regard to your extra effort at marketing in the fourth quarter, clearly, it's paid off. But could you give us a little bit clearer idea of how the marketing was spent? You mentioned concentration on digital. And what can we look forward in this new year with respect to the marketing effort and the amount being employed? Kenneth C. Hicks: We had a multi-pronged approach as we look at our marketing, both in terms of developing more digital and things that were online, so digital related. It may be an email. It maybe a Flash ad. It maybe just doing something on Facebook or Twitter, but we had an effort there. But we also stepped up our television marketing, and having that more directed to building the brand than just talking about an item. We continue to see the opportunity to build the brand banners. We had specific ads for both Champs and Foot Locker that focus on the brands, and we will continue to do that. And then we also spend the marketing on events. We had a number of appearances, and we'll continue to have those appearances with the star athletes and with different things. We had the series we ran with Amare, both working as a striper and then when he came in and resigned, and both of those were tremendously successful. Looking forward, we plan to continue the marketing that we have, and we'll continue to invest in marketing and having it grow as we grow our sales. The marketing rate will remain about the same. But as sales grow, we'll grow the amount that we spend. We also continue to have the key sponsorships that we've had in the past and look forward to continuing those. Bernard Sosnick - Gilford Securities Inc., Research Division: You mentioned that direct was 11% of fourth quarter sales. What did it amount to for the full year? Lauren B. Peters: 9%. Kenneth C. Hicks: 9% for the full year. Bernard Sosnick - Gilford Securities Inc., Research Division: Okay. And how much was that up for the full year? I'm sorry. John A. Maurer: In terms of percent? Bernard Sosnick - Gilford Securities Inc., Research Division: Yes, total direct. Kenneth C. Hicks: For the full year, we're up in the 20% range. John A. Maurer: Over 20%. Total direct including CCS was up 16% in the quarter. Kenneth C. Hicks: Including CCS. But without CCS, that's over 20%. John A. Maurer: That's right.

Our next question comes from Michelle Tan from Goldman Sachs. Michelle Tan - Goldman Sachs Group Inc., Research Division: I was wondering if you could give us a little more color on kind of the push, the puts and takes in your gross margin outlook for 2012. First, I guess, is FX a factor at all? Do you buy for Europe in dollars? Or do you buy for Europe in euros? John A. Maurer: Predominantly in euros. Michelle Tan - Goldman Sachs Group Inc., Research Division: Okay, great. And then I guess, looking at the 40 basis point guidance and mid single digit comps, I would have thought you would have maybe gotten closer to 60 basis points plus of buying an occupancy leverage. So is there something changing a little bit with how the degree to which you can leverage buying occupancy in your comps? Or is there a little bit of give back on merchandise margin? How are you guys thinking about that? Lauren B. Peters: Well, again, we're -- the guidance was 30 to 40 basis points on a mid single digit comp and we do lever, as you've seen. When we can beat on the top line, we can lever the fixed cost. But as we talked about all last year, there were increases on the cost side that we expected to see in the spring and we are. So that does put pressure. But we still think that with the flow opportunities we have described and apparel opportunities, we will be able to make improvements. They'll be smaller in merchandise margin. Michelle Tan - Goldman Sachs Group Inc., Research Division: Okay, great. That's helpful. And then just lastly on Europe, I'm not sure if you have visibility on this or not, but do you have any sense of whether what you've seen in the market to your point on snowstorms and whatnot is kind of representative of what broader retail has seen in Europe? Or are you concerned at all that there's anything in terms of product reception or product cycle trends that are playing a role? Kenneth C. Hicks: Well, we've seen some good selling on the new product that we brought in pretty much across Europe. There has been a slowdown. There's no question that Europe's not as robust as it has been, but it was a little more difficult to read in February and January because they did have -- I mean, we literally had -- at points in time, we might have 100 stores closed because of a storm. But while there has been a slowdown, we continue to be optimistic. But first of all, it's a profitable business for us. But as we look forward, we've got the new product that's selling well. We've got some extensions in some of the businesses that we're doing. And there are some major events this year in Europe that should help drive the business when you look at things, like the Euro Cup and the Olympics.

Our next question comes from Camilo Lyon from Canaccord Genuity. Vincent Esposito - Canaccord Genuity, Research Division: This is Vinnie Esposito on for Camilo. First, can we start with the apparel margins and the business there? What are you thinking as far as the mix of private label as we head forward into 2012 and then beyond? Do you plan on keeping that mix consistent? Kenneth C. Hicks: We grow what sells. And so we don't set a standard of what a private label or what a branded should be. But what's happened right now is the -- we've had stronger branded merchandise and it has sold better, so we've grown that faster. I just had a product review, I guess, on day before yesterday looking at the private label going forward, and it looks very strong. And I think we will get stronger sales out of that. And the other thing about our private label apparel is we're able, probably, to respond faster than we can in branded because we just -- we have shorter lead line on some of the elements of it. So I think that we will see private label grow. We don't set a percentage, but I think it will grow. The question is, will it grow as fast as what we grow in the branded business? The customer will help determine that for us. Vincent Esposito - Canaccord Genuity, Research Division: Okay. And onto Europe and how you're managing the profitably there given the challenges, are you reducing any expenses? What's kind of the puts and takes there? Lauren B. Peters: We look to flex, right? So we have the ability to flex on the downside as well as when sales are running ahead, flex on the upside. So you control the controllables in that environment. You control your selling wages and control the overhead. You look for opportunities to reduce.

Our next question comes from Sam Poser from Sterne Agee. Sam Poser - Sterne Agee & Leach Inc., Research Division: I just missed. You said it quickly. The numbers, store openings and closings, and then I have a couple of other questions. Lauren B. Peters: For 2012? Sam Poser - Sterne Agee & Leach Inc., Research Division: 2012, yes. Lauren B. Peters: Yes. Open, 82. Close, 75. Net open, 7. Sam Poser - Sterne Agee & Leach Inc., Research Division: Right. Okay, great. A couple questions. The -- involving -- you mentioned that your private label apparel is still underperforming the branded apparel. Is this maybe something where you should be looking maybe at sort of higher average tickets, lower additional markup and building out your branded apparel business rather than trying to build out a private label business and really work up -- work it on an operating income basis for that versus trying to build private label -- or big private label source? Kenneth C. Hicks: Yes. I mean, we are planning to build the branded business and are stepping it up. And I think we will see that continue to grow. At the same time, what we're doing with our private label business is we were, for all intents and purposes, selling cotton by the pound. And we're shifting from that. And it gives us the ability to provide the customer good quality at a price functionality, and in some cases, fashion and look with either colors or prints or logos for that matter that the customer wants. We've got a line in Europe called Sneaker Freak, and it's a very strong line of T-shirts and fleece. And that's something that we can grow. The Actra line in Women's has been very well received. And the Champs line, which is a higher quality line than we sold in the past, Champs Sports gear, we see that as an opportunity. So we're not growing private label just to grow private label. We're making sure that it fills the need in our assortment and has a place where it can grow along with our branded. Sam Poser - Sterne Agee & Leach Inc., Research Division: Maybe just a follow-up to that. In the past, really, you've been almost 80% private label. What do you see the balance going to, over time, here? Kenneth C. Hicks: No. We're nowhere near that level in private label. Sam Poser - Sterne Agee & Leach Inc., Research Division: No. Not now, but I mean you were a long time... Kenneth C. Hicks: That I can't speak to. But since I've been here, we've never been near that. And even so, it's probably historically been over half branded. But as I said earlier, we're not looking for percentage. We're looking for the right mix. And at points in time, if the brands are hotter, they will be a larger percentage. If they're not and we're able to provide look and value, then private label will grow. When you set a percentage or -- and go out and buy that way, that usually leads to markdowns. Sam Poser - Sterne Agee & Leach Inc., Research Division: That's fair enough. And then just lastly, Lauren, you talked about gross margin picking up 30 to 40 basis points in total next year? Lauren B. Peters: Yes. Sam Poser - Sterne Agee & Leach Inc., Research Division: And that would be -- so you're expecting your merch margin probably to be down. Is that -- am I thinking about that correctly? Lauren B. Peters: Most of the leverage -- most of the improvement will come from leverage. There will be a little bit of merchandise margin. Sam Poser - Sterne Agee & Leach Inc., Research Division: And then on the SG&A, where are you thinking about -- how are you thinking about your spend there? Lauren B. Peters: We're looking at 60 to 80 basis point improvement as a rate.

Our next question comes from Michael Binetti from UBS. Michael Binetti - UBS Investment Bank, Research Division: So I just want to recap where we stand with price increases coming through from some of your bigger brands. I think some of those just started recently here or probably influencing that February number. And as we think about how that ties in with the merchandise margin, is that a merchandise margin positive? Is that -- or do the AUCs flex up somewhat in tandem with the AURs on the price increases? Kenneth C. Hicks: They go somewhat in parallel. We average -- or I won't say we average -- we work with the vendor on certain items. We're able to take up more on certain items. We're holding the price or holding the cost. And so it's difficult to say something across the board. What you see is the percentage change and -- or the percentage we're trying to hold, as you've heard with our plans, is as close as possible. But if the price goes up and the percentage is the same, the dollars go up. So there's that benefit. Michael Binetti - UBS Investment Bank, Research Division: Let me ask you one more here and then I have a third follow-up actually. The mid-single digit comp you gave for the year, with Europe down now, pretty substantially but obviously with some noise there, you said you expect that to be positive and we all see the sporting events coming on the horizon this year. But, Ken, for 2 years now, you've had to give us one number that didn't end up being conservative. So at negative Europe at this point, even though we think that can reverse, when you look at that mid-single digit comp, where do you feel like you can make up some ground, if you need to? Where -- maybe in a year from now, where do we look back and say there was potential for some upside there? Kenneth C. Hicks: Mid single digit comps. We -- I mean, the challenge we have is we know that there will be some businesses that will perform better and some that will perform not quite as well. Right now, where we see the balance, at this point for the year, is in the mid single digits. And to say where -- who's going to perform much better or much worse so early in the game to call exactly, we've got our plans. But as Lauren said, one of our -- one of the things that we've been able to do is respond, both up and down. Michael Binetti - UBS Investment Bank, Research Division: Okay. And then you mentioned something earlier that caught my attention about hooking up apparel with footwear and you've seen better trends there of bundling and the purchasing. How do you -- is there any way you could give us some kind of a number even if it's pretty general that helps me think about improvements you're seeing in the basket of people coming in and selecting some apparel to throw in with footwear since you've been there? And maybe how you look at -- I think from the sound of it, it sounds like it's something you're looking to be a driver for the year and rightfully so, maybe how you're looking at that for the year ahead. Kenneth C. Hicks: Yes, we do look at that. We track it at a number of different ways, both in terms of the basket price and the units per transaction. And the different divisions approach it differently because for example, at Champs, they have more apparel and they have more hookups, where Foot Locker may do more accessories like socks and hats to go with it. It also is more difficult to manage because in the past, we may have focused more on hooking up a T-shirt with a pair of shoes. One of the things we're seeing in Champs is they're hooking up a pair of a full tracksuit, a track jacket with the track bottom. And in many cases, we're now selling those 1 to 1, where historically, you'd sell -- it could be 2 to 1 as you look at the tops to bottoms. So I think we're seeing -- we are tracking against that. Those are internal measures, but we're seeing success as we move forward.

And your next question comes from Chris Svezia from Susquehanna Financial. Christopher Svezia - Susquehanna Financial Group, LLLP, Research Division: I just want to go back to the product margin thought process, particularly on apparel. I know mix is going to have some different dynamics in terms when one branded goes versus the private label piece. But if you think about those 2 silos independently, how are product margins looking as you think about 2012 on the branded piece and on the private label piece? Do they continue to show improvement? Kenneth C. Hicks: Yes, both do. We're doing a much better job in the back part of the year than the front part of the year on our private label margins. And as we work with the vendors, we're seeing good opportunities there, too. Christopher Svezia - Susquehanna Financial Group, LLLP, Research Division: Okay. And then on -- when you guys think about Europe for a second -- I don't know if you kind of want to talk to this. But when you think about your mid single digit comp forecast, is that to imply that for the year, the international or European piece would be down slightly and U.S. piece be up mid single, somewhere in that range? I'm just trying to think how Europe falls into that mid single digit forecast. Lauren B. Peters: We felt good about planning for mid single digit, and it's one of the benefits we have from having a diverse portfolio. So we've said we've got a number of things that encouraged us about Europe's potential, and some things that are working well that we will hope that takes it out of the performance we've seen this February. But we've got other parts of the business that can make up for any shortfall. Kenneth C. Hicks: As Lauren said in her remarks, we're planning all the major divisions up and just some more up a little more than others. So it's planned out for the year. Christopher Svezia - Susquehanna Financial Group, LLLP, Research Division: Okay, that's helpful. And then just -- Lauren, for you, just one on the guidance, particularly on -- when you talk about gross margin improvement in SG&A leverage, you mentioned also the extra week. Is that included in that gross margins up 30 to 40 and SG&A leverage 60 to 80? Is that extra week embedded in that or no? Is that [indiscernible]? Lauren B. Peters: No, it is not. The basis point guidance I gave you is on a 52-week basis. So the 53rd week, since it doesn't have occupancy cost associated with it, we'll have better margin with that one week. John A. Maurer: Okay. Thank you, everyone. That's wrapping up today's call. We look forward to seeing many of you next week at our investor meeting. Please catch the webcast if you can't join us in person. Beyond that, we anticipate holding our first quarter conference Call at 9:00 a.m. on May 18, following the release of our Q1 earnings the previous evening. Thank you very much, and goodbye.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.