With shoemakers Nike (NYSE:NKE), Reebok (NYSE:RBK), and Saucony (NASDAQ:SCNYB) all sprinting to solid results, it should be no surprise that retailers like Finish Line (NASDAQ:FINL) continue to do well. Not to be outdone, Foot Locker (NYSE:FL) is running stride for stride.

Foot Locker's fourth-quarter net income increased 25% to $89 million, compared with $71 million in the same period a year ago. Its sales leaped forward by 15% to $1.5 billion.

The strong revenue growth played the greatest role in the company's earnings increase. Slightly improved operating margins, up 3.6% to a level of 8.5%, also helped, as did a lower tax payout.

For the year, Foot Locker's fiscal 2004 sales climbed 12%, while its net income jumped 42% to $293 million. The company's earnings ended at $1.88 per share, up 35% year-over-year. Its shares outstanding rose 4.2 million, or 1.8%.

Going forward, Foot Locker expects its EPS to be in the range of 10% to 20%. If the company hits the top end of guidance, its earnings will come in at $2.26 per share. At a price of around $29, its stock, trading at 13 times forward earnings -- roughly equivalent to its estimated blended growth rate -- fits nicely with its reasonable valuation.

Potential investors will also take comfort in Foot Locker's manageable balance sheet, containing $492 million in cash and equivalents and long-term debt of $347 million. But with an anticipated $170 million in capital expenditures for the upcoming year, caused mostly by the planned opening of 100 new stores, Foot Locker could end up having to tap into its cash position to fund the expansion. The company does have a strong cash flow that could support its aggressive plans, but the situation bears watching.

With plenty of overpriced equities giving off that funky-smelling old basketball shoe odor, it's nice when you can add a potential investment that won't stink up your portfolio. Foot Locker is a worthy candidate for one's watch list, and given the results of further research, it may even be worth lacing up.

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Fool contributor Jeremy MacNealy does not own shares in any company mentioned.