John Maurer - VP of IR Lauren Peters - EVP and CFO Richard Johnson - EVP and COO Kenneth Hicks - Chairman, President and CEO

Seth Sigman - Credit Suisse Camilo Lyon - Canaccord Genuity Kate McShane - Citi Research Mitchel Kummetz - Robert W. Baird Sam Poser - Sterne Agee & Leach Inc. Jay Sole - Morgan Stanley Matthew Boss - JPMorgan Paul Trussell - Deutsche Bank AG Robert F. Ohmes - Bank of America, Merrill Lynch Christopher Svezia - Susquehanna Financial Group Omar Saad - ISI Group Michael Binetti - UBS Investment Bank

Good morning, ladies and gentlemen, and welcome to the Foot Locker's First Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. This conference call may contain forward-looking statements that reflect 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 release and SEC filings. We refer you to Foot Locker Inc.'s most recently filed 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 forward-looking statements. If you have not received today'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 Mr. John Maurer, Vice President, Treasurer and Investor Relations. Mr. Maurer, you may begin. John A. Maurer: Thank you, Christine. I'd like to welcome all of you to Foot Locker Inc.'s first quarter earnings conference call. This morning we reported first quarter net income of $162 million, an increase of 17% compared to last year's net income of $138 million. On a GAAP basis, this year's net income represents $1.10 per share, a 22% increase over the $0.90 per share we earned in the first quarter of 2013. This quarter was the most profitable first quarter ever in the long history of our company. Q1 was also the most profitable of any quarter, not just a first quarter, in our history as an athletic company. Included in these results are approximately $2 million of charges related to a trade name impairment in Ireland and additional Runners Point Group integration costs. Excluding these items on a non-GAAP basis, Foot Locker's first quarter earnings were $1.11 per share compared to the $0.91 recorded in the first quarter of 2013 after excluding certain RPG acquisition costs. Except as noted otherwise, the figures and rates mentioned during our remarks will be based on these non-GAAP results. A reconciliation of GAAP to non-GAAP results is included in this morning's press release. Lauren Peters, Executive Vice President and Chief Financial Officer will kick off our prepared remarks this morning with a detailed review of our first quarter financial results. She will then hand the ball to Dick Johnson, our Executive Vice President and Chief Operating Officer to provide additional product and operational insight into our results. And finally Ken Hicks, our Chairman and CEO, will team with Dick to review the progress we are making on seizing the many near and long-term opportunities the company is executing against. And we will conclude with an opportunity for you to ask questions. Lauren? Lauren B. Peters: Thank you, and good morning to you all. 2014 has started off quite well, as indicated by the very strong earnings John just outlined, and the 7.6% comparable sales gain we reported today. In fact, including Runners Point Group, our total sales increased 14% in the first quarter. Breaking out our comparable sales gains by segment, our stores were up 6.4% while our direct to customer segment was up 17.2%. We noted on our previous call that February's comp gain was in the low double-digits. March comp sales were up in the low single-digits despite the negative impact of the shift of Easter into April this year, while April's gain was in the low double-digits. Among our domestic store divisions, Kids Foot Locker was once again the sales leader in the quarter with a stellar mid-teen comp gain. Foot Locker division in the U.S. also had an excellent result, posting a high single-digit comp sales gain. Footaction and Champs Sports posted a mid-single and low single-digit gain respectively. Lady Foot Locker came in with a low single-digit comp loss which represents a significant sequential improvement over last year, which Dick will discuss further during his remarks. Foot Locker Europe generated a solid mid-single-digit comp gain. With only one country, Italy, not posting an overall sales gain in the quarter. In fact, several countries were up double-digits, including our Foot Locker business in Germany. On top of that, Runners Point Group delivered a comp gain in the double-digits, although I need to remind you that RPG sales will not be included in our reported comp base until October of this year. Foot Locker Asia-Pacific continued its strong run producing a high single-digit comp gain. Foot Locker Canada posted a mid-single-digit decline. Our 17.2% comp gain in our direct-to-customer segment was driven by our store banner.com business in which we achieved yet another gain in excess of 40%. Eastbay, still the biggest part of direct to customer was up low single digits while CCS, the smallest piece, was down mid-single-digits. Our direct-to-customer sales were 11.3% of total sales, up almost 100 basis points from a year ago. These strong sales results yielded an equally strong result in gross margin, which improved to 34.6% of sales from 34.2% a year ago. Consistent with the guidance on our call in March, the increase was primarily related to leveraging the fixed elements of our gross margin, producing a gain of 70 basis points. Merchandise margin was down 30 basis points due primarily to initial markup decline. Our SG&A rate also improved to 19% of sales from 19.2%. As good as this result is, in fact, 19% is our best ever quarterly SG&A rate as an athletic company. It was negatively impacted by a couple of things. First, excluding Runners Point Group our SG&A rate would have been 18.6%. We bought a profitable business with a full management team and infrastructure and for the most part we intend to keep that structure in place leveraging it for growth. That said, there are definitely operating synergies we're beginning to realize and which will continue to benefit us going forward. The second factor impacting our SG&A rate this quarter was a $2 million increase in our legal reserves. As expected, depreciation expense increased to $36 million, reflecting a higher level of capital investments we've been making in the last couple of years. The rest of the income statement, primarily interest and income taxes, came in very close to our expectations going into the quarter. We also delivered balance sheet results in line with our targets. First, inventory increased 8.5% overall, compared to our 14% total sales increase. Excluding RPG and using constant currencies, inventory was up just over 3% compared to our comparable sales gain of 7.6%. We also ended the quarter with just over $1 billion of cash and short-term investments, a decrease of about $100 million from the end of Q1 last year. We continued to execute our share repurchase program, acquiring approximately 1.5 million shares for $70 million and we also paid an increased dividend of $0.22 per share representing an additional $32 million. Together, the share repurchases and dividends amounted to over $100 million of cash returned to our shareholders. We also invested approximately $500 million of capital into our business-- John A. Maurer: $50 million. Lauren B. Peters: Thank you for that correction, John, $50 million of capital into our business to drive future growth. During the first quarter, we opened 27 stores and closed 36. As outlined in March the largest number of openings was in Europe and in Kids Foot Locker, while half of the closures were in Lady Foot Locker. We ended the quarter with 3,464 company-owned stores. I would characterize the quarter as one in which we executed efficiently, both operationally and financially and delivered everything we said we would, along with some solid upside on the topline which flowed nicely to the bottom-line to produce the best quarter in our history. It was an excellent performance by everyone on the Foot Locker team and certainly results of which we're all very proud. Based on these results and what we can see over the rest of the year, we are reiterating the strong outlook we gave you at the beginning of the year. Quarterly mid-single-digit comparable sales gain, 30 basis points to 50 basis points of leverage gains and gross margins, 20 basis points to 30 basis points in improvement in SG&A, depreciation and amortization between $145 million and $150 million for the year, an effective tax rate of approximately 36.5% and double-digit percentage EPS gains. Our results for the first couple of weeks in May are consistent with this outlook, with comparable sales through yesterday up mid-single-digits. Let me now turn the call over to Dick to review the merchandising strategies that led to these strong results. Richard A. Johnson: Thanks, Lauren, and good morning. I appreciate everyone taking the time to be with us this morning. Let's start with the families of business. Footwear was the leader in the first quarter with a gain in the low double digits. Apparel was down mid-single-digits and our accessories business was up low single-digits. Starting with footwear, where we had a lot of our strengths, our biggest category was also our strongest, with basketball up solidly in the teens. The gains were led by Jordan and Nike Marquis player shoes. As was the case throughout most of last year Jordan was strong across the Board. Jordan brand shoes like the True Flight, all of the retro releases, and the Player Edition shoes including Melo and CP performed well in the quarter. The three key players in Nike Marquis basketball, Lebron, KD, and Kobe also performed consistently well in our stores and online. Basketball footwear sales were up in all of our geographies. Outside of North America, however, the running business is actually our largest category and our international running business was up well into the double-digits. Our gains in running in Europe were led by Max Air by Nike, especially the Max 90 and Max One style; Adidas also stepped up with the strong program, the ZX Flux that contributed significantly to our success in the category in Europe. Across our total company, running was up high single-digits with the international gains partially offset by a low single-digit decline in the U.S. Overall, Nike lightweight running was strong with the Free continuing to provide meaningful growth as was the Fingertrap Max where we had a good assortment of exclusive products. Some of the other technical brands trended off, although Under Armour Speedform Apollo shoe got off to a good start albeit with limited pairs thus far. Also on the positive side, we're taking a strong position of Puma, as they begin to draw inspiration for their new innovative products from their performance sports heritage. We've introduced Puma Lab bays in about 100 of our U.S. Foot Locker stores and so far they are performing well. Within our casual business, styles such as the Huarache, Roshe and Thea, all from Nike also performed well. Vans did well, especially in the classic silhouettes. We also had good business in core White/White Air Force Ones. And while Converse was down for us in total the basic white and black Chuck Taylors continue to sell well. Turning to our apparel business, I mentioned we were down mid-single-digits in total. The competitive environment in the malls and online remains challenging and yet we did hold nearly flat from the U.S. The premium tees, tanks, fleece and shorts that hook to our footwear did well, especially, in Jordan and Nike signature basketball. Our remodeled stores showcase this apparel particularly well and apparel sales were up in these stores. Our biggest challenge in apparel was in Europe where the business declined double-digits. We had some successes, such as in Jordan and NBA license tees and shorts, but not enough to offset a decline in the Adidas originals product. Nonetheless, we're optimistic about the Adidas business for the back half of the year as we see a more innovative pipeline of product arriving during that period. Finally, the weather was quite a bit warmer in most of Europe this quarter compared to last year. While that probably helped our running business it hurt our fleece business which was particularly strong a year ago. Our sock business continues to drive the accessories category. Although, the growth is not as strong as it has been. In performance styles, growth is coming mostly from fashion socks with sublimated prints and other fun styles from vendors such as Stamps. We also continue to be a key destination for multi-pack basic socks from our major vendors as well as our own private label socks. Head wear was strong especially knit hats, including the licensed hats with fresh team logos and prints. These knot hats sold well not just in cold weather markets and like Timberland boots, knit hats were a popular style choice around the country, north and south throughout the quarter. Before I turn the call over to Ken, let me touch briefly on some of our operational metrics. First, our traffic was up in the quarter, as were units sold. Our marketing teams did a terrific job bringing customers to our stores and our operation teams were at the top of their game making sure those customers were happy and left with a bag full of merchandise. We also posted an increase in average unit retail which was a combination of customer preference for premium product and the lower mark down rate that Lauren mentioned. Let me now hand it off to Ken to review where we are in the execution of the initiatives addressing our many opportunities. Kenneth C. Hicks: Thanks, Dick. Good morning to you all. Let me start off by echoing Lauren's remarks that this quarter's results are something everyone at Foot Locker should be very proud of. We produced our 17th consecutive quarter of comparable sales gains and profit increases. We achieved our third consecutive first quarter of all-time record profits and John tells me, he went back and reviewed every annual report for the last 100 years to be sure we've never earned more than $162 million of net income in a first quarter and we're strong in almost every region and division. It took every person in the company performing their job well, displaying energy and passion and the pursuit of our goals and adhering to our core values in order to produce the results we did this quarter. I want to thank all of them for their hard work that went into this performance. I'll now highlight some of the initiatives that are generating our current success and which we believe can lead to even better results in the future. You've heard about many of these opportunities before, but I believe they're worth reiterating. First, our children's business is growing rapidly. Lauren mentioned the mid-teen comparable sales gain at Kids Foot Locker. Including the children's sales and other banners, the overall gain in children's was in the very high teens, as we invest successfully in the kids business in most of our other banners as well. That said, we have further opportunities both domestically and overseas to capture more sales of merchandise for children. We'll be opening new Kids Foot Locker stores in certain markets and dedicating more space to the children's business and many of our other banners. Second, sales are growing in Europe. Not only is our base Foot Locker business improving in most countries, we're increasing our store count in markets where we're relatively under penetrated. For example, we opened six stores in France in the first quarter. We also had high expectations for the Runners Point Group and so far we've not been disappointed. They've gotten off to a terrific start this year. We're still in the process of more clearly differentiating the assortments in our unique banners, that effort has been going very well as you can see from a strong double-digit comp gain Lauren mentioned. And finally in terms of Europe, our digital business is growing rapidly. This applies to both our legacy Foot Locker business throughout much of Europe as well as to RPG solid online positioning in Germany. Our base is still small compared to the U.S., so we're working hard to build our capabilities and ultimately make digital in Europe another one of our real strengths. Our third near-term opportunity is elevating our running in apparel businesses. It touched down our current results, let me just add we're very optimistic that we're taking the right steps to build the best assortment of Running footwear for our customers with exciting new products from Nike, Adidas, Under Armour, New Balance, ASICS, Brooks and Puma, either in our stores now or coming this summer. While our strength in basketball was undeniable, we intend to ensure that we have multiple solid legs on our stool including running and casual foot wear as well as apparel. Well our apparel penetration continued to edge back in the first quarter. We're confident in our ability to build that business overtime up to the 30% level that was in the past. We're seeing positive results from the actions we're taking to focus on premium apparel, often exclusive to us, that complements our exciting footwear offerings. We still have many stores to remodel which will allow us to showcase and sell even more apparel in the future. However, it's an ongoing process to build the right mix of performance in basic apparel now given that the majority of our stores at this point are not yet remodeled. Fourth, we're in various stages of rolling-out, prototyping and casting our various shopping - shop concepts in a partnership with our vendors. The concept furthest along in rollout is of course our House of Hoops shops of which we operated 139 at the end of the quarter. We plan to take it to 200 shops very soon and once we get there, we'll see how much further we can go with this very productive concept. We're also testing the Nike Yardlines in Champs Sports in several locations. A handful of Adi collective shops in Footaction, a prototype Jordan Flight 23 shop also in Footaction. The Fly Zone in Kids Foot Locker and we have two Puma performance labs in Footlocker. Some of these tests are too early to call, but we'll make adjustments in order to maximize the profit potential and we're optimistic about all of them at this point. Fifth and finally in terms of near-term opportunities, we continue to integrate our brick-and-motor operations with our e-commerce capabilities. We announced our most recent innovation just this week, the Eastbay performance zone at Champs Sports. This is a very exciting opportunity for us and for our customers because we are bringing the full power of the Eastbay brand into the mall for the first time. The Eastbay performance zone is a 150 square foot area inside select Champs Sports with a premium league product for what Eastbay is known will be featured. There will be an extensive array of this product available to sample and buy in the stores and a four foot touch screen will highlight size and color extensions of the even more of Eastbay's best products. The in-store merchandize will be seasonally relevant rotating through a variety of sports and activities. And the customer will have access to the entire inventory of literally hundreds of thousands of SKUs of each day on a computer located in the zone. This collaboration between Eastbay and Champs Sports is another great example of the creativity of our teams as we drive the evolution of the store experience to be integrated with our industry leading digital capabilities. The first four Eastbay performance on shops will open in Champs Sports next month. We'll have one each in St. Petersburg Florida, Minneapolis, Milwaukee, and Sacramento. Now let me turn it back to Dick to discuss our progress on some of our intermediate and longer term opportunities. Dick? Richard A. Johnson: Thanks Ken. Our biggest incremental capital commitment both during the last few years and going forward is our store remodel program. We continue to roll-out the Tyrone format at Champs Sports and the Willowbrook format at Foot Locker. We're on track to have remodeled 20% of the Foot Locker stores in the U.S. and 30% of the Champs Sports stores by the end of 2014. We're still in test mode for the new remodel format for Footaction. Yearly leagues there are also encouraging. So, we will be expanding that past this year. We're getting better and better at executing these remodel projects and the Willowbrook format is proving successful internationally. So, we believe we have a long runway ahead of us. Cumulatively, the remodel program is already producing good net sales reps even factoring in the time when stores are closed for construction. We believe the momentum of improved sales will get even stronger as we complete more remodel projects during next several quarters. Next, our investment and technology is also continuing. Our labor scheduling system is in place in North America and Europe and our teams in the field already love it. We expect our store managers to learn to use the tool even more effectively in the years ahead. Meanwhile, our hiring tool has been implemented with great success throughout the U.S and we're currently evaluating the 2015 rollout in Europe. We're already seeing the benefits of both of these tools and the sales productivity of our associates in our expense results. We're in the final stages of preparing our new merchandise allocation system for a rollout beginning in the fall of this year. We're testing the system carefully. We expect this to be a very powerful tool in the hands of our merchants as we seek to lower markdowns and improve sales further by delivering the right product to right stores at the right time in the right quantities and sizes. We are also investing in other ways to make our inventory more productive. For example, we're providing our store associates with tools such as handheld devices and digital displays, to serve their customers better even when the product they want isn't in a particular store. We found we can't take a one size fits all approach. Technology is changing quickly. We have stores for different size and staff and challenges. But we're constantly looking for ways to help our associates to satisfy their customers and invest aggressively when the returns justify. Finally, our women's banners are improving with a positive low single-digit comp in April and so far this month. But the business is not yet where we want it to be. The Lady Foot Locker, the Bridgewater remodel changes we talked about last time, which include an enhanced footwear wall and pant helping to improve are helping to improve the base per chain. We have quite a few more of these Bridgewater projects to complete this spring in summer. Meanwhile, SIX:02 continues to do well. But we are still in the test mode. We've opened helping to improve stores in the Dallas area, and in Florida and we're working to build the brand awareness quickly in those local markets. We're also testing different assortment mixes to ensure that the productivity formula for SIX:02 is optimal prior to making a roll-out decision later this year. Ken? Kenneth C. Hicks: Thanks Dick. Before we get to your questions, let me just summarize the quarter by saying that during our call in March, we laid out some challenging expectations for 2014. And we executed consistently in the first quarter to meet and in fact exceed those expectations. And I know from experience, that not every quarter will be a strong as the past one, but the message I want to leave you with is that this performance is not the result of floating down a stream and letting the currents dictate our results by chance. On the contrary, our entire team is highly focused on our financial and operational objectives and actively driving our business to achieve those objectives. There will be headwinds on the course ahead I’m sure, but at the same time, we have every confidence and ability of the team at Foot Locker to respond quickly to those challenges, make adjustments and continue to move forwards towards (audio gap). We’ll be happy to take your questions. Could you go ahead, Christine?

Thank you. We will not begin the question-and-answer session. (Operator Instructions) Our first question comes from Seth Sigman from Credit Suisse. Please go ahead. Seth Sigman - Credit Suisse: Okay. Thanks and congrats guys on a great quarter. Kenneth C. Hicks: Thanks, Seth. Seth Sigman - Credit Suisse: Just follow-up on the women’s business, the low single-digit improvement you’re seeing in April or you start in April and then so far this month, anything specific that you can point to that striving that. Do you feel like it’s a little bit of weather or anything else that’s maybe changed in the business? And then maybe more broadly the improvement that you’re seeing in some of the women’s remodels or prototypes that you have, is that both in footwear and apparel, any areas that maybe working better than others, just more color would be great? Kenneth C. Hicks: Yes, Seth. We’re seeing an improvement, because I think we’re getting the assortment to work more right there, focused on at mid-20 to 30-year old woman and performance oriented. And we also to some degree are anniversaring out of some of the things that we did in the past promotional elements. Hence, we are seeing a good performance in the -- that performance apparel as we get more of it right in the stores. We all saw the performance shoes are doing well. So, we think now we’ve got the assortment right. We’re fine tuning it in the stores. We also have more stores that have more apparel in them, and we know that apparel is an important part of that what that customers looking for as she puts here outfits together. So, I would say it’s not just one thing, but getting a lot of work that we’ve done over the past year and a half since we opened our first SIX:02 and started to updated the Lady Foot Locker stores and we’re starting to see the benefits of that. Seth Sigman - Credit Suisse: And the stores certainly look better, but do you feel like the awareness of those changes where it needs to be or is that an opportunity just to kind of let that shopper know that things are looking a lot better in the store that they should come back? Kenneth C. Hicks: It’s a definite opportunity. It's one of the reasons why as Dick mentioned, we’re clustering some of those stores and markets, so that we get more awareness and help ourselves there. We are actually doing better in the ladies, because they’ve got to built-in customer base when we start to put the apparel in. But I think ultimately, we know the customer when she gets into SIX:02, she like SIX:02, we just have to get more people to become aware of it. Seth Sigman - Credit Suisse: Sure. Okay. Thanks. Kenneth C. Hicks: Thanks, Seth.

Thank you. Our next question comes from Camilo Lyon from Canaccord Genuity. Please go ahead. Camilo Lyon - Canaccord Genuity: Thanks and nice job in the quarter, guys. Kenneth C. Hicks: Thanks, Camilo. Camilo Lyon - Canaccord Genuity: I was hoping, you could talk a little bit more about the relative performance of apparel in the remodel stores versus the base, and maybe help us understand the magnitude of improvement in those remodeled store, so we can see a pathway towards you ultimately getting to that 30% mix contribution? Richard A. Johnson: As we said, this is Dick, Camilo. As I’ve said in the remarks, I mean, we’re certainly seeing apparel performed better in our remodeled stores. We can tell our merchandizing stories. We got better adjacencies with the footwear and we see a pickup. We’re not going to get into the specifics of the amount of the pickup, just to tell you that it is better. We’ll have 20% of the Foot Locker stores remodeled by the end of the year and 30% of the Champs stores remodeled by the end of the year. So we anticipate continuing to see progress. Camilo Lyon - Canaccord Genuity: Is it fair to say that it’s…? Kenneth C. Hicks: Let me just one other thing, well it's not the only factor, but one of the things -- we’re pretty well through remodeling the children’s chain, and we feel pretty good about the performance in children’s. And so, while we don’t think we’ll get the same big impact in kids. We know that our current remodels in Champs and Foot Locker are meeting their expectations and our capital goals. Camilo Lyon - Canaccord Genuity: Okay, great. And then just shifting over to the quarter to-date trends that you said mid-single-digit thus far, is there any difference in the number of launches in this period if quarter to-date versus last year, because I think that there are eight new launches from Nike over the next few days that would seemingly have a pretty big impact on that quarter to-date number that were reported few days later? Richard A. Johnson: Well, we’ve got -- when we look at the launch calendars coming over, whether they line ups specifically on the day or the weekend is not always the case, but throughout the quarter they are relatively equal. So, the quarter to-date number was certainly be impacted by the line that launches on Saturday, but that just an offset to a different launch a year ago. So, I think that again, the second quarter doesn’t have quite as many exciting events whether it’s a February with the All-Star game and a chance to drive or Spring Breaks or whatever it is. So, I think the mid-single-digit put long reference to our in line with our expectation. Camilo Lyon - Canaccord Genuity: Okay. And just a housekeeping question for Lauren, what was the dollar contribution from RBG in the quarter? Lauren B. Peters: We don't disclose the results of the segments individually. But it was positive to the quarter. Camilo Lyon - Canaccord Genuity: All right. Okay. Thanks. Good luck for the rest of the year. Kenneth C. Hicks: Thank you, sir.

Thank you. Our next question comes from Kate McShane from Citigroup. Please go ahead. Kate McShane - Citi Research: Thanks, good morning. With regards to the merchandize margin pressure, I know that this has been an ongoing thing, can you remind us again where the pressure is coming from, is it more footwear or apparel and what your outlook is for this sort of for the rest of the year. And well, I know you’re being successful of offsetting some of these margin pressure from the control of inventory and the limited markdowns, are there any kinds of changes to mix that can help, alleviate some of the merchandizing margin pressure? Lauren B. Peters: Let start with what we saw in Q1, because mix was faster. So, we back off 30 basis points in merchandize margins and more of that was related to -- I am new which was not a case of the costs to up-selling, it was more case of the vendor. So IMU is not equal across all vendors. So as vendor mix shift that hasn’t impact. The other element to the quarter, our merchandized margin with a strong result in direct-to-customer segment, which does have a bit of a lower merchandize margins, but very comparable finished margins plus fixed costs, so that’s what happened in Q1. But as we look forward, we expect to get strong leverage on the fixed, which gives us 30 to 50 basis points opportunity we outlined. And there are numbers of things that we’re working on that we believe in the long-term we’ll improve the merchandize margins. So things like that allocation tool that comes on line for in the fall, will help us to do better job of the right and getting place -- right product at right place, right time etcetera, etcetera. So that will help us on the top line, but it's also going to help us on the margin, because this should impact our fewer markdowns. And then as we work on apparel, that’s another opportunity as we get up to back to the 30% penetration that we think we can achieve, and ultimately get to merchandize margin rates on apparels that are other than footwear, should be the case. Kenneth C. Hicks: We also have then apparel, the opportunity to start to rebuild lot of brands and we’re starting to see that as we’ve shifted from cotton by the pound to more appropriate product for the assortment we’ve had. And as we get that business moving forward, that will also help our margins. Kate McShane - Citi Research: And if I could just follow-up to one thing that you said with regards to the new systems and implementations that come on in the fall, will that be an immediate impact to margins or we see that as soon as the new systems are implemented? Lauren B. Peters: That something that we will build over time, right, so its intention how to get the right product to the right place. It will give you a little bit of insight immediately to stuff that you haven't sent out to a store yet where you might make adjustments but where it gives you your real power is you start to influence orders. Kenneth C. Hicks: Most systems today, it’s a learning systems, so it will learn as we allocate stores and see selling patterns etcetera, the system will start to track that history. So -- while there would be some immediate impact is more I’ll talk about, that will certainly grow over time as the system learns and sees our selling patterns. Lauren B. Peters: Yes, as we get every quarter using that. Kenneth C. Hicks: And we put more categories on because it’s going to be rolled out by category. Kate McShane - Citi Research: Okay, great. And if I could snick in more questions on kids, I think you said you’re expanding some of the kids business within the other brand banners, is this something that would be completed by back-to-school or will this be ongoing? Kenneth C. Hicks: That’s an ongoing effort. As we evaluate the loss space in the sales productivity, we will identify opportunities to expand in that various across banner and across geography. So, KFL certainly our strongest, we continue to open doors and KFL will see some progress, some expand of space back-to-school, but it’s an ongoing effort. Kate McShane - Citi Research: Okay. Thank you. Kenneth C. Hicks: Thank you.

Thank you. Our next question comes from Mitchel Kummetz from Robert W. Baird. Please go ahead. Mitchel Kummetz - Robert W. Baird: Thank you. Let me ask about kids, how is that business performing in Europe and what are the opportunities to kind of build the kids business there? Richard A. Johnson: It's -- as we talked about, kids has a great opportunity in all geographies with actually our opening and testing in Kids Foot Lockers in various countries in Western Europe where we do business already. So it continues to become a bigger part of the mix in Europe and we think that there are opportunities to potentially have a more complete chain of kids Foot Lockers in Western Europe. Mitchel Kummetz - Robert W. Baird: And it has the performance of the kids business within the Foot Lockers stores is there been a strong as what you’re seeing in the U.S. or? Richard A. Johnson: Yes. Mitchel Kummetz - Robert W. Baird: Okay. And then on the running business, I think you guys said that international is up low double-digit, U.S. down mid-singles, what’s the reason for that big difference, I mean, is it somewhat weather-related or is it from fashion standpoint or why the big difference there? Richard A. Johnson: Well, outside of the U.S. the running silhouette is the preferred silhouette for our key consumers. So, in the U.S. basketball silhouettes and if you take a look at some of the basketball silhouettes today, the low tops, the Venomenon, some of the KD product, they are not distinctly different than a running silhouette. They are not distinctly different than the running silhouette, I mean, obviously their performance basketball shoes, but if they’re on quote they’re able to be warned in many circumstances. So I think the difference is really that across the globe running is silhouette of preference and the U.S. basketball just as very significantly and very strong. Mitchel Kummetz - Robert W. Baird: Okay. And then you said that pretty encouraged that with new running product in the pipeline, maybe this is my interpretation, but it sounds like you guys that business could get better as we go into the back half of the year, is that the case and if that is when do you think the new product will have an impact on the running business in the U.S? Richard A. Johnson: Well, we see a good product in the pipeline across a lot of categories, but certainly in running and then the ZX Flux that I mentioned over in Europe. Some of the three nets that we’ve seen hit in U.S. we’ll continue to add to quantities that we’ve got available. So, we expect going into the summer and back-to-school that we’ll see more running product available and strong powerful sales from that product. Mitchel Kummetz - Robert W. Baird: Okay. That’s helpful. Thanks. Good luck. Kenneth C. Hicks: Thanks, Mitchel.

Thank you. Our next question comes from Sam Poser from Sterne Agee. Please go ahead. Sam Poser - Sterne Agee & Leach Inc.: Good morning. Thanks for taking my questions. Kenneth C. Hicks: Hi, Sam. Sam Poser - Sterne Agee & Leach Inc.: Hi. Couple of things, one, can you give us some idea of a differential between European and domestic margins. Right now I don't need the specifics but I mean to say, what kind of base point differential are we seeing and can that evolve into something different overtime? Lauren B. Peters: Yeah, again we don't disclose by banners. There is opportunity in Europe, in our international businesses. They have been historically less commercial which supports very strong product margins but as we have improved the productivity in the U.S. we're seeing the gap grow. So we think that there is upside still to the international margins. Sam Poser - Sterne Agee & Leach Inc.: Thank you. And then, what is the - what's the long-term store growth targets now for both Europe and for RPG, and what are we seeing there for - how you're looking at the longer term store base opportunity there? Richard A. Johnson: We think there is still opportunities to open stores Sam, but the reality is that when we remodel and do things adding House of Hoops, adding Yardlines, we're actually increasing our square footage. So, we're driving productivity, we're increasing our square footage as we begin to segment and differentiate the Runners Point stores and Runners Point Foot Locker and Sidestep in Germany and we get that formula right, we think there will be the opportunity as we've said in previous calls to Runners Point and test Runners Point and Sidestep outside of Germany. So, we've said that we believe across Europe there is an opportunity more than 700, 750 Foot Locker's and that could be Foot Locker's, Kid Foot Locker's in Europe there are under penetrated markets such as France, markets that we are just getting into such as Turkey. But we think there is an opportunity for Foot Locker. We also believe that Runners Point Group provides an opportunity in other parts of Europe and whether that's a Runners Point or Sidestep store, we are in the process of determining and we have not really made up - developed a point of view as to where and how big that will be but when we bought the chain, we said this is more than just a Germany business. Sam Poser - Sterne Agee & Leach Inc.: Thank you. And then lastly are you seeing - you commented Dick that the launches were pretty equal year-over-year. Are you seeing, - what kind of increases and allocations are you seeing on the marquee products either Jordon or Nike marquee? Richard A. Johnson: Sam, we don't really discuss the level of allocation. I mean that's an ongoing discussion and opportunity with our suppliers. So, - Sam Poser - Sterne Agee & Leach Inc.: Have you seek to drive like your good comps for the quarter and your good comps quarter to-date. I mean how much of that was driven by having great product and how much of it is was being driven by having more grade products-- Kenneth C. Hicks: We have a lot of great products that is both release and non-release related. We're not going to impact with our allocations for release products there. Sam Poser - Sterne Agee & Leach Inc.: Well, thank you very much, and continued success. Kenneth C. Hicks: Thanks.

Thank you. Our next question comes from Jay Sole from Morgan Stanley. Please go ahead. Jay Sole - Morgan Stanley: Hi, good morning. Kenneth C. Hicks: Good morning, Jay. Jay Sole - Morgan Stanley: I just want to ask about buybacks. $70 million of buybacks in the quarter was the highest first quarter in the company's history. Are you looking to continue to maintain that level through the rest of the year? And can we continue to see buybacks increase as the cash flows allows it even into 2015 and beyond? Lauren B. Peters: We announced at the beginning of the last year $600 billion of program in five quarter and have spent 300 of that, we got half of it locked by that math you can see that the pace is up. Jay Sole - Morgan Stanley: Okay. That sounds great. And then let me just ask in a quick e-com question. I think you said DTC was up 17.2. There has been obviously e-commerce growing much faster than stores. Can you talk about when you see the DTC growth maybe normalizing because fairly a shift from stores to online, but is there a point where you see that growth rate slowing or did you see a continuous shift from stores into online? Kenneth C. Hicks: I think that e-commerce will continue to grow faster than brick-and-mortar for some time. It's a much smaller number. Even as fast as it's growing, it's still just a fraction of what all the brick-and-mortar is. That said, what we are doing is rather than, particularly the more developed e-commerce market, the United States, we are not adding stores, we are making our stores more exciting places to draw people and we think that's benefiting us. So, our square footage is up but the number of stores are down and our focus is connecting the online and the store because we're seeing the customer, particularly our customer is somewhat agnostic as to where and how they buy and they go back and forth between stores and e-commerce to shop online in the store, they will shop at home, and then come to a store, all sorts of different ways. And we're very excited about the concept that we're putting in between Champs and Eastbay, because that ultimately connects and makes our virtual store a real store for the customer. And it takes a real store and helps give it a much more virtual capability. And I think ultimately this is where retail will go and it'll be a combination and it's one of the reasons why retailers include .com in their store for store number because it's the bigger store. It is a store and it is connected to all of the stores. Jay Sole - Morgan Stanley: Got it. Thanks so much. Kenneth C. Hicks: So, we got that commercial element. Jay Sole - Morgan Stanley: Thanks. Kenneth C. Hicks: All right, thanks Jay.

Thank you. Our next question comes from Matthew Boss from JPMorgan. Please go ahead. Matthew Boss - JPMorgan: Hi, good morning. So, as we think about sales productivity longer term, what do you guys see the greatest opportunity as we're approaching that $500 target? Richard A. Johnson: The single greatest would be really difficult to say, I think that we see as we had tools as we give the merchandise mix right in the store, as we had training for our associates. Those all drive productivities. So, whether that's in a singular banner or singular geography, I think we've got tremendous productivity opportunities across the board. Matthew Boss - JPMorgan: So, we shouldn't think about $500 as a sealing by any means, just more of a goal. Richard A. Johnson: $500 is the goal. What we have done in the past and probably will do in the future is set goals to hit and then move beyond them. People do always talk about retail as a marathon and I say no, a marathon has an end. Retail does not have an end. We just keep going. And so we have one goal, we go past another and it's indicative by the results of this quarter when you think about it, our company has a history of over 100 years and this was the best quarter in over 100 years. By the way, next first quarter next year, want to see that again, and the next first quarter and the next first quarter. That's what we're working towards. Matthew Boss - JPMorgan: Great. And then as we think about the SG&A line, so excluding RPG and the legal reserve, looks like leverage is almost 75 basis points. As we think going forward, should we think about our low single-digit fixed cost hurdles that you can hold that over time, is that kind of the best way to think about the expenses? Lauren B. Peters: We can lever with single digits content. Again think about the guidance we gave you 20 to 30 basis points on the single-digit comp gain. Matthew Boss - JPMorgan: Great. Best of luck. Richard A. Johnson: Okay. Thank you. Kenneth C. Hicks: Thanks Matt.

Thank you. Our next question comes from Paul Trussell from Deutsche Bank. Please go ahead. Paul Trussell - Deutsche Bank AG: Hey good morning, I share my congrats on a great first quarter and for good month to date results ahead of a blockbuster Memorial Day weekend headlines - all of my questions have been asked. So, I'll pass the mic. Kenneth C. Hicks: Thanks Paul. Appreciated.

Thank you. Our next question comes from Roby Ohmes from Bank of America, Merrill Lynch. Please go ahead. Robert F. Ohmes - Bank of America, Merrill Lynch: Hey, good morning. Thanks for taking my question. Actually it's -- Ken I wanted to ask you guys commented already on the share repurchase, but could you remind us, I mean you have $1 billion of cash on the balance sheet. Can you remind us priorities you see for that cash? And maybe weave in there your appetite for more acquisitions, especially in Europe? Thanks. Kenneth C. Hicks: Okay, sure, Robbie. Our priorities remain the same, first and foremost, to make sure that we have a solid financial base for the company. We're in an industry that has up and downs and we need to make sure that we're positioned securely. And there are companies right now that aren't -- they don't have the financial strength and they're in trouble, we don't want to get in that position. Two, to grow and take advantage of the opportunities, so we can continue to deliver the results. We're doing that with remodels, with systems and with different things to improve our business where appropriate. The third is to make sure we recognize and reward our shareowners. We have a very viable dividend program and an active share buyback program that we've talked about. We look and evaluate opportunities to grow the company externally on an ongoing basis. We look at a lot of different things all the time and when we see one that is appropriate, we will take action. In Europe, we've had a couple over the last couple years. One that was a very small acquisition in the Czech Republic that allowed us to get in there, position ourselves with eight stores and make sure that we started on the right foot in that market. Another was the Runners Point Group, a much more significant acquisition that we feel positions us: one, in the biggest country in Europe, much better. Two, gives us some other formats that we can develop in Europe. And three, a dot com capability. If we can find things that will enhance the company like those two acquisitions in Europe, we will take advantage of them. But as I say all the time, we've got good open to listen, but we're not going to -- we don't have the money burning a hole in our pocket that we've got to go do something that's not very smart. Robert F. Ohmes - Bank of America, Merrill Lynch: Got it and I just have a quick follow-up question for Dick. Dick, I think you mentioned in the comments something about the competitive environment in apparel in the malls and on the internet. And could you -- I was hoping you could maybe just elaborate what you were referring to. Thanks. Richard A. Johnson: I think, Robbie, if you look at the nature of some of the vertical fast fashion people, our kid shops a lot of different places and the big verticals and the fast fashion guys make it difficult to necessarily compete on some of the fundamental basics. So, as we target more premium athletic hook up apparel, we just have to learn to react quicker. I think that the kid has a lot of options; both online and in the mall and we have to create reasons for them to come and shop for apparel from us. Kenneth C. Hicks: It's the reason we got out of like the cheap T-shirts, the promotional T-shirts. We were not making it a major part of our business. There's too many choices. And then when you take even a printed T-shirt now and you've got some of the vertical people who are selling their name T-shirts that used to sell for very high prices at big discounts that makes it more challenging for us to sell $20 and $25 T-shirts. Robert F. Ohmes - Bank of America, Merrill Lynch: Got it. That's very helpful. Thanks so much. Kenneth C. Hicks: Okay.

Thank you. Our next question comes from Chris Svezia from Susquehanna Financial. Please go ahead. Christopher Svezia - Susquehanna Financial Group: Good morning everyone. Congratulations as well. Kenneth C. Hicks: Thanks, Chris. Christopher Svezia - Susquehanna Financial Group: Just quick -- just first question -- just on Europe. Just impressive to continue to see the momentum there. I know the apparel business was tough. I guess just give us your thoughts about sustainability of that comp performance. Just kind of how you see things potentially unfolding as the year progresses, maybe some catalysts around the European business will be helpful. Richard A. Johnson: Yes, I think Chris that we've got some momentum and traction there, as we continue with our strong kids business, as we look at the remodels and the Willowbrooks that we're putting in play where apparel will be again able to be featured more, as we get the apparel assortment right. We think that what we're doing in Europe, we're doing a lot of the right things. So, we think that the traction we've seen is sustainable. Kenneth C. Hicks: Yeah, we've also, Chris, seen an expansion of what we're doing in running, Dick talked about the ZX and Frees and things like that that have a better position in running. And basketball is actually developing as a business in Europe and we're positioned as the leading basketball person. So, you take the kids business, getting the apparel business on track the way we want and we're both the big elements in footwear, feel pretty good about Europe. Lauren B. Peters: And our growth in digital. Kenneth C. Hicks: Yeah. Christopher Svezia - Susquehanna Financial Group: Okay, all right that's good to hear. And then just on the apparel business, it's nice to see some improvement in the remodels. I know Europe has been a little tough, but I think previously you had thought possibly apparel could be a comp business this year. Is that potentially still the case or is there still -- you just kind of feel there's more work that needs to be done there before you can claim victory there on the apparel business? Kenneth C. Hicks: I don't know if we had said in the past about claiming victory in apparel. We believe that we've got some things that will help us improve our apparel business. And-- Lauren B. Peters: One of those being the remodels. Kenneth C. Hicks: The remodels are one of them. The growth quite frankly in children's and women's helped because we didn't have an apparel business in kids and now we've got an apparel business in kids. Women's apparel is a bigger part of their business than other businesses. And so we think that and our vendors efforts on apparel, they are having some of the same challenges and they're making some new product and things that I think will help us in apparel. Christopher Svezia - Susquehanna Financial Group: Okay, all right. Well, all the best, talk to you soon. Thank you. Kenneth C. Hicks: Okay. Thanks, Chris.

Thank you. Our next question comes from Omar Saad from ISI Group. Please go ahead. Omar Saad - ISI Group: Thanks. Really nice execution, guys, congratulations. Kenneth C. Hicks: Thank you, Omar. Omar Saad - ISI Group: It's also nice not to have a golf business I'm sure, at least a meaningful one. Two quick questions. Number one, it was interesting to hear you mention Puma earlier in the call. It's really been several years since that brand had a significant seat at the table back when the low profile trend was big. Any thoughts there what's happening with that brand? Is low profile coming back or is Puma evolving its brand in a way that's more relevant to your customer? And then just also just another follow-up on Europe. I look at the huge, the really strong balance sheet situation, the cash on the balance sheet. Europe is a market where there really isn't a pan-European competitor that's relevant. And even allows a local market competitors are competitors. Why not get more aggressive there with store openings really to fill in that marketplace given how much white space there is? Is that something you'd consider doing, pushing the accelerator in Europe? Thanks. Richard A. Johnson: Well, we obviously invested in RPG. I'll answer your second question first. We obviously invested in RPG, which gave us almost 200 more doors in Germany which, strongest economy in Western Europe. Over the last five years I think we've opened 160, 150 or 160 Foot Locker -- Kids Foot Locker doors. So, we've had a pretty aggressive program in Western Europe. And we've got -- when we talked about the use of capitals, our remodel program is a big program. So, again part of it is having all of the geographies, all of the banners that we have to make progress in and weighing those -- we love all of our children, we just sometimes we can't love them equally, but they all get a slice of capital. So, we think that there's certainly opportunity in Western Europe. Kenneth C. Hicks: Yeah. And another thing that we're doing in Western Europe is the development of the internet which will help that business and also cover some of the territories. Your first question, we are a house of brands and we work very hard to make sure that those leading brands are positioned well. We've got a terrific partner in Nike and working with them on some franchises. We've got a terrific party in Jordan working with them on franchises. We've got a terrific partner in Adidas working with them and other brands, Converse you go into our Kids store; we have a place where Converse is set up. We've got some places with Under Armour that we're working on. Puma is a brand that has fallen on hard times. We think that it has potential, whether our timing is perfect, I don't know. But I believe in the Management team that Puma has now and I believe that they will come back and that it will be a good opportunity for both of us. Omar Saad - ISI Group: Thanks, Ken great job. Kenneth C. Hicks: Okay. Thanks, Omar. John A. Maurer: All right, I think we have time for just one more question.

Thank you. Our final question comes from Michael Binetti from UBS. Please go ahead. Michael Binetti - UBS Investment Bank: Hey good morning. Congrats on a nice quarter guys. Kenneth C. Hicks: Thank you. Michael Binetti - UBS Investment Bank: May be Lauren, just one modeling question quickly. The spread of total revenue growth versus comp growth, it was pretty wide versus flat to negative in the past few quarters. Could you help us think about that for the model and how is that going to continue going forward? Lauren B. Peters: Yeah, that big gap is the addition of the Runners Point Group business which came in to us in July, so we'll have that delta there for May and June and then we begin to cycle against that. Kenneth C. Hicks: And like we've said spring is their biggest season, so this was a bigger sales lift than the fall seasons were. Michael Binetti - UBS Investment Bank: Okay, thanks. And then Ken, just as we think about everything we've talked about over the years since you got to the company and I think women's and Lady Foot Locker have been one of the areas that's been slower to turn than you thought. We've seen obviously the department stores at the end of the mall are piling into a lot more square footage allocated to women's, obviously the off mall guys struggle with getting their percent of mix to women up higher. Do you feel like as with the end of the mall and the anchors getting much more aggressive in that category, there's maybe a window of opportunity that's closing for you guys? Or do you feel any need to, I guess, speed up the approach to try and get Lady Foot Locker turned around and get 602 rolled out or anything like that? Kenneth C. Hicks: Well, we -- I believe that women's business is still the biggest opportunity. I never -- believe me; I knew it would be a challenge. There have been a lot of reasons why, part of it is some legacy and things that we have, part of it is as the brands develop their capability. One of the things that I firmly believe is as the general merchandisers start to step something up, that presents an even better opportunity for the specialists. So, we're working to make sure we have it right and I think we're getting much closer to that. And we will be able to step out and offer something that nobody else can, a place for a woman to shop, to buy her shoes and apparel, to be physically active and look good, and find different brands and fits to best satisfy her needs. And that's really what we're looking at, where we're going, and I don't think a department store can do that. I don't think a sporting goods store can do that. The space is not conducive to giving her that opportunity. And because we are a house of brands and we offer those things, I firmly believe that we are fast approaching -- or the window is not closing and we're fast approaching where we have a good answer. We will be thoughtful in how we do it and people can be critical of being maybe a little bit slow, but I think that over the past 17 quarters, the results show being a little bit slow ain't always bad. Michael Binetti - UBS Investment Bank: For sure. And I didn't mean to sound like-- Kenneth C. Hicks: It's hard to deliver. Michael Binetti - UBS Investment Bank: Thanks guys. Kenneth C. Hicks: Okay. Thanks, Michael. And thanks everybody for the call. John A. Maurer: That's all we have time for today. We look forward to having you join us on our next call that we anticipate will take place at 9:00 A.M. on Friday, August 22nd following the release of our second quarter and year-to-date earnings results earlier that morning. Thanks again and goodbye.