SEC Filing | Foot Locker, Inc.

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floc20230327_8k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 19, 2023 (May 17, 2023)

Foot Locker, Inc.

(Exact name of registrant as specified in charter)

New York	1-10299	13-3513936
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

330 West 34th Street, New York, New York 10001

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (212) 720-3700

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	FL	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.

Results of Operations and Financial Condition.

On May 19, 2023, Foot Locker, Inc. (the “Company”) issued a press release (the “Press Release”) announcing its first quarter 2023 financial and operating results. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K, which, in its entirety, is incorporated herein by reference.

The Company is hosting a conference call on May 19, 2023 to discuss its first quarter 2023 financial and operating results, during which the Company will provide an update on the business.

The Company is making reference to financial measures not presented in accordance with U.S. generally accepted accounting principles (“GAAP”) in the Press Release, an investor presentation concerning its first quarter 2023 financial and operating results (the “Investor Presentation”), and a conference call. A reconciliation of these non-GAAP financial measures to the nearest comparable GAAP financial measures is contained in the Press Release. The Company believes these non-GAAP financial measures provide useful information to investors because they allow for a more direct comparison of its first quarter 2023 performance to its performance in the comparable prior-year period. The non-GAAP financial measures are provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP. A reconciliation to GAAP is provided in the Condensed Consolidated Statements of Operations.

The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In the press release, the Company announced that, among other things, Michael Baughn, age 42, has been appointed Executive Vice President and Chief Financial Officer of the Company, effective June 12, 2023. A copy of the press release is furnished as Exhibit 99.1, which, in its entirety, is incorporated herein by reference.

Mr. Baughn has spent over 15 years at Kohl’s Corporation in various roles with increasing responsibility within its finance organization, including Executive Vice President of Finance and Treasurer since July 2021, Senior Vice President of Finance and Treasurer from April 2018 through July 2021, and Vice President of Finance—FP&A and Treasury from June 2015 through April 2018.

In connection with his appointment as Executive Vice President and Chief Financial Officer, Mr. Baughn’s base salary will be set at $650,000 per year, his target annual equity incentive opportunity will be set at 200% of his base salary (20% delivered in restricted stock units (“RSUs”) that vest three years from the date of grant, 60% delivered in performance stock units (“PSUs”), and 20% in non-statutory stock options that vest in equal installments over three years, in each case subject to continued employment through the vesting dates), and his target annual cash incentive opportunity will be set at 85% of his base salary (for the 2023 fiscal year, Mr. Baughn shall be paid a prorated annual cash incentive, but in no event less than an amount equal to the prorated portion of 85% of his base salary or, if greater, the prorated portion of the annual cash incentive opportunity calculated based on actual performance for the 2023 fiscal year). Effective June 12, 2023, Mr. Baughn will receive annual equity incentive grants (20% delivered in RSUs that vest three years from the date of grant, 60% delivered in PSUs for the 2023-25 long-term performance period (prorated for the 2023-25 performance period), and 20% in non-statutory stock options that vest in equal installments over three years, in each case subject to continued employment through the vesting dates). Mr. Baughn will also receive a sign-on cash payment in the amount of $600,000, $300,000 of which is payable within 90 days after his start date, and the remaining $300,000 of which is payable within 90 days after the one-year anniversary of his start date; and a sign-on RSU grant with a value of $600,000, which will vest over two years from the grant date, as long as Mr. Baughn is continuously employed by the Company through each such anniversary date.

Mr. Baughn has no family relationship with any of the Company’s directors or executive officers. Mr. Baughn has no direct or indirect material interest in any related party transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

As previously disclosed on February 21, 2023, Robert Higginbotham will cease to serve as interim Chief Financial Officer, effective on June 11, 2023, and continue to serve as Senior Vice President, Investor Relations and Financial Planning & Analysis, reporting to Mr. Baughn.

At the Company’s annual meeting of shareholders held on May 17, 2023 (the “Annual Meeting”), shareholders approved the 2007 Stock Incentive Plan, as Amended and Restated (the “Plan”), and the 2023 Foot Locker Employee Stock Purchase Plan (the “ESPP”). A summary of the terms and conditions of the Plan and the ESPP may be found on Pages 101-110 and Pages 111-114, respectively, of the 2023 Proxy Statement. Copies of the Plan and the ESPP are filed as Exhibits 10.1 and 10.2, respectively, to the Form S-8 Registration Statement filed on May 17, 2023 (the “Form S-8”), which, in its entirety, is incorporated herein by reference.

Item 5.07.

Submission of Matters to a Vote of Security Holders.

At the Annual Meeting, shareholders voted on the five proposals set forth below. For more information on the proposals, please see the 2023 Proxy Statement, the relevant portions of which are incorporated herein by reference.

As of March 20, 2023, the Company’s record date for the Annual Meeting, there were a total of 93,429,371 shares of common stock, $0.01 par value per share (“Common Stock”), outstanding and entitled to vote at the Annual Meeting. At the Annual Meeting, 72,697,651 shares of Common Stock were represented in person or by proxy and, therefore, a quorum was present.

Proposal 1. With respect to the proposal to elect ten nominees to the Board of Directors (the “Board”), each for a one-year term expiring at the annual meeting of shareholders to be held in 2024, the votes were cast for the proposal as set forth below:

Name	Votes For		Votes Against		Abstentions		Broker Non-Votes
Mary N. Dillon		67,034,124		387,488		76,453		5,199,586
Virginia C. Drosos		66,953,845		462,657		81,563		5,199,586
Alan D. Feldman		65,400,418		2,012,709		84,938		5,199,586
Guillermo G. Marmol		65,098,489		2,312,121		87,455		5,199,586
Darlene Nicosia		66,374,764		1,040,915		82,386		5,199,586
Steven Oakland		67,114,249		301,288		82,528		5,199,586
Ulice Payne, Jr.		66,778,937		637,452		81,676		5,199,586
Kimberly Underhill		66,604,182		811,104		82,779		5,199,586
Tristan Walker		67,091,719		322,138		84,208		5,199,586
Dona D. Young		64,950,700		2,465,909		81,456		5,199,586

Based on the votes set forth above, each of the ten nominees to the Board was duly elected.

Proposal 2. With respect to the proposal to approve, on an advisory basis, the Company’s named executive officers’ (“NEOs”) compensation, the votes were cast for the proposal as set forth below:

Votes For			Votes Against				Abstentions				Broker Non-Votes
65,246,260				2,114,695				137,110				5,199,586

Based on the votes set forth above, the NEOs’ compensation was approved.

Proposal 3. With respect to the proposal to approve the Plan, the votes were cast for the proposal as set forth below:

Votes For			Votes Against				Abstentions				Broker Non-Votes
57,260,191				10,122,202				115,672				5,199,586

Based on the votes set forth above, the Plan was approved. A copy of the Plan is filed as Exhibit 10.1 to the Form S-8, which, in its entirety, is incorporated herein by reference.

Proposal 4. With respect to the proposal to approve ESPP, the votes were cast for the proposal as set forth below:

Votes For			Votes Against				Abstentions				Broker Non-Votes
66,991,515				419,762				86,788				5,199,586

Based on the votes set forth above, the ESPP was approved. A copy of the ESPP is filed as Exhibit 10.2 to the Form S-8, which, in its entirety, is incorporated herein by reference.

Proposal 5. With respect to the proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year, the votes were cast for the proposal as set forth below:

Votes For			Votes Against				Abstentions
71,212,299				1,410,718				74,634

Based on the votes set forth above, the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year was duly ratified.

Item 7.01. Regulation FD Disclosure.

In conjunction with the Press Release, the Company also made available the Investor Presentation. The Investor Presentation, which is available under the “Investor Relations” section of the Company’s corporate website, located at investors.footlocker-inc.com, is included as Exhibit 99.2 to this Current Report on Form 8-K, which, in its entirety, is incorporated herein by reference. Information on the Company’s corporate website is not, and will not be deemed to be, a part of this Current Report on Form 8-K or incorporated into any other filings the Company may make with the U.S. Securities and Exchange Commission.

The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01.	Financial Statements and Exhibits.

(d)	Exhibits.

Exhibit No.	Description

99.1	Press Release, dated May 19, 2023.
99.2	Investor Presentation, dated May 19, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FOOT LOCKER, INC.

Date: May 19, 2023	By:	/s/ Sheilagh M. Clarke
		Name:	Sheilagh M. Clarke
		Title:	Executive Vice President, General Counsel and Secretary

ex_493500.htm

Exhibit 99.1

https://cdn.kscope.io/76dbf39261fb0f0261bfa6befe0ae2d0-logolg.jpg

N E W S R E L E A S E

Contact:

Robert Higginbotham

Interim Chief Financial Officer

ir@footlocker.com

(212) 720-4600

FOOT LOCKER, INC. REPORTS 2023 FIRST QUARTER RESULTS

● Total Sales Decreased 11.4%; Comparable-Store Sales Decreased 9.1%

● EPS of $0.38 and Non-GAAP EPS $0.70

● Lowering 2023 Sales and Earnings Guidance

● Announces Retail Industry Veteran Mike Baughn as Chief Financial Officer

NEW YORK, NY, May 19, 2023 – Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended April 29, 2023.

“Coming off the recent launch of our Lace Up Strategy at our Investor Day in March, we are making early progress in building a strong foundation to return to sustainable growth beyond this year,” said Mary Dillon, President and Chief Executive Officer. “However, our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.”

Ms. Dillon continued, “Despite the challenging near-term trends, we remain committed to our long-term strategy, including making the necessary investments to drive our Lace Up plan, and maintain conviction in our ability to execute against our new strategic imperatives.”

First Quarter Results

●

Comparable-store sales decreased by 9.1%, driven by macroeconomic headwinds, including lower income tax refunds in the United States, as well as the changing vendor mix and our repositioning of Champs Sports.

●

Total sales decreased by 11.4%, to $1,927 million, compared with sales of $2,175 million in the first quarter of 2022. Excluding the effect of foreign exchange rate fluctuations, total sales for the first quarter decreased by 10%.

Please refer to the Sales by Banner table below for detailed sales performance by banner and region.

●

Gross margin declined by 400 basis points compared with the prior-year period, driven by a combination of higher markdowns compared to historically low levels in the prior year, and occupancy deleverage, as well as an increase in theft-related shrink.

●

SG&A increased by 110 basis points as a percentage of sales compared with the prior year, with savings from the cost optimization program more than offset by underlying deleverage on the sales decline, inflation, and investments in front-line wages and technology.

●

Net income decreased to $36 million as compared with $133 million in the first quarter of fiscal 2022. Non-GAAP net income decreased to $66 million from $155 million in the prior-year period.

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●

EPS decreased to $0.38 per share, versus $1.37 in the first quarter of fiscal 2022. Non-GAAP EPS decreased to $0.70 per share compared with non-GAAP EPS of $1.60 in the prior-year period.

Balance Sheet

At quarter-end, the Company’s cash and cash equivalents totaled $313 million, while debt on its balance sheet was $451 million.

As of April 29, 2023, the Company’s merchandise inventories totaled $1,758 million, 25% higher than at the end of the first quarter last year.

Dividend and Share Repurchases

During the first quarter of 2023, the Company paid a quarterly dividend of $0.40 per share for a total of $38 million.

The Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.40 per share, which will be payable on July 28, 2023, to shareholders of record on July 14, 2023.

Store Base Update

During the first quarter, the Company opened 13 new stores, remodeled, or relocated 18 stores, and closed 35 stores.

As of April 29, 2023, the Company operated 2,692 stores in 29 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 163 franchised stores were operating in the Middle East and Asia.

2023 Financial Outlook

Fiscal year 2023 represents the 53 weeks ending February 3, 2024. The Company’s full year 2023 outlook, which includes the 53^rd week, is summarized in the table below.

Metric	Prior Guidance	Updated Guidance	Commentary
Sales Change	Down 3.5% to 5.5%	Down 6.5% to 8.0%	Including ~1% from the extra week
Comparable Sales Change	Down 3.5% to 5.5%	Down 7.5% to 9.0%	Softer sales through balance of year
Square Footage Change	Down ~4%
Licensing Revenue	~$20 million	~$20 million
Gross Margin	30.8% to 31.0%	28.6% to 28.8%	More aggressive markdowns and higher shrink
SG&A Rate	22.6% to 22.8%	22.4% to 22.6%	Solid expense management
D&A	~$205 million	~$205 million
Interest	~$12 million	~$16 million	Less interest income on lower cash balance
Non-GAAP Tax Rate	31.5% to 31.7%	32.9% to 33.1%	Higher on geographic mix of income
Non-GAAP EPS	$3.35-$3.65 including $0.15 from the extra week	$2.00-$2.25
Adj. Capital Expenditures*	~$305 million	~$305 million

* Adjusted Capex includes capitalized Technology expense

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The Company provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the Company’s forward-looking tax rate, capital expenditures, and diluted earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.

Chief Financial Officer Appointment

Today, Foot Locker, Inc., announces the appointment of Mike Baughn as Executive Vice President and Chief Financial Officer, effective June 12, 2023.  

Mike joins us from Kohl’s Corporation where he most recently served as Executive Vice President of Finance and Treasurer. He brings to Foot Locker more than 15 years of experience in various financial leadership roles across Kohl’s.   

Mike will report directly to Mary Dillon, President, and Chief Executive Officer, and oversee Foot Locker, Inc.'s financial initiatives and position the company for long-term growth.   

With Mike’s start, Robert Higginbotham, Interim Chief Financial Officer, will resume his role as Senior Vice President, Investor Relations, and Financial Planning & Analysis, reporting to Mike.   

“Following a rigorous search process, we are thrilled to welcome to our leadership team, Mike Baughn, whose role will be instrumental in delivering our Lace Up plan,” said Mary Dillon. “I am confident Mike will further accelerate our new set of strategic imperatives and financial objectives designed to set us up for the next 50 years of growth. Let me also thank Rob for his leadership of the finance organization while we conducted the search, ongoing contributions, and critical role in launching our strategy at our Investor Day.” 

“Foot Locker is a cultural staple that has led the footwear category for nearly 50 years. I am honored to join this incredible team as CFO at such a pivotal time for the company as they deliver the Lace Up plan,” said Mike Baughn. “Foot Locker has a rich heritage to build upon and I am looking forward to working closely with Mary Dillon and the leadership team to ensure great customer experiences, as well as value for our stakeholders."  

Conference Call and Webcast

The Company is hosting a live conference call at 9:00 a.m. ET today, May 19, 2023, to review these results and provide an update on the business. An investor presentation will be available under the Investor Relations section of the Company’s corporate website before the start of the conference call. This conference call may be accessed live by calling toll-free 1-844-701-1163 or international toll 1-412-317-5490, or via the Investor Relations section of footlocker-inc.com. Please log on to the website 15 minutes prior to the call to register. An archived replay of the conference call can be accessed approximately one hour following the end of the call at 1-877-344-7529 in the U.S. or 1-855-669-9658 in Canada or 1-412-317-0088 internationally with passcode 6393779 through June 2, 2023. A replay of the call will also be available via webcast from footlocker-inc.com.

Disclosure Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as future capital expenditures, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues, and earnings, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the Company’s filings with the U.S. Securities and Exchange Commission.

These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. For additional discussion regarding risks and uncertainties that may affect forward-looking statements, see “Risk Factors” disclosed in the Company’s Annual Report on Form 10-K for the year ended January 28, 2023, filed on March 27, 2023. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update the forward-looking statements, whether as a result of new information, future events, or otherwise.

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Condensed Consolidated Statements of Operations

(unaudited)

Periods ended April 29, 2023 and April 30, 2022

(In millions, except per share amounts)

	First Quarter
	2023			2022
Sales	$	1,927		$	2,175
Licensing revenue		4			3
Total revenue		1,931			2,178

Cost of sales		1,349			1,435
Selling, general and administrative expenses		431			463
Depreciation and amortization		51			54
Impairment and other		39			6
Income from operations		61			220

Interest expense, net		(1	)		(5	)
Other income / (expense), net		(3	)		(25	)
Income before income taxes		57			190
Income tax expense		21			58
Net income		36			132
Net loss attributable to noncontrolling interests		—			1
Net income attributable to Foot Locker, Inc.	$	36		$	133

Diluted earnings per share	$	0.38		$	1.37
Weighted-average diluted shares outstanding		95.1			97.2

Non-GAAP Financial Measures

In addition to reporting the Company’s financial results in accordance with generally accepted accounting principles (“GAAP”), the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP financial measures that will be presented will exclude (i) gains or losses related to our minority investments, (ii) impairments and other, and (iii) certain tax matters that we believe are nonrecurring or unusual in nature.

Certain financial measures are identified as non-GAAP, such as sales changes excluding foreign currency fluctuations, adjusted income before income taxes, adjusted net income, and adjusted diluted earnings per share. We present certain amounts as excluding the effects of foreign currency fluctuations, which are also considered non-GAAP measures. Where amounts are expressed as excluding the effects of foreign currency fluctuations, such changes are determined by translating all amounts in both years using the prior-year average foreign exchange rates. Presenting amounts on a constant currency basis is useful to investors because it enables them to better understand the changes in our business that are not related to currency movements.

These non-GAAP measures are presented because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core business or affect comparability. In addition, these non-GAAP measures are useful in assessing our progress in achieving our long-term financial objectives and are consistent with how executive compensation is determined.

We estimate the tax effect of all non-GAAP adjustments by applying a marginal tax rate to each item. The income tax items represent the discrete amount that affected the period. The non-GAAP financial information is provided in addition, and not as an alternative, to our reported results prepared in accordance with GAAP. The various non-GAAP adjustments are summarized in the tables below.

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Non-GAAP Reconciliation

(unaudited)

Periods ended April 29, 2023 and April 30, 2022

(In millions, except per share amounts)

Reconciliation of GAAP to non-GAAP results:

	First Quarter
	2023			2022
Pre-tax income:
Income before income taxes	$	57		$	190
Pre-tax adjustments excluded from GAAP:
Impairment and other ⁽¹⁾		39			6
Other income / expense ⁽²⁾		1			24
Adjusted income before income taxes (non-GAAP)	$	97		$	220

After-tax income:
Net income attributable to Foot Locker, Inc.	$	36		$	133
After-tax adjustments excluded from GAAP:
Impairment and other, net of income tax benefit of $6 and $2 million, respectively ⁽¹⁾		33			4
Other income / expense, net of income tax benefit of $- and $6 million, respectively ⁽²⁾		1			18
Tax reserves benefit ⁽³⁾		(4	)		—
Adjusted net income (non-GAAP)	$	66		$	155

	First Quarter
	2023				2022
Earnings per share:
Diluted earnings per share	$	0.38		$	1.37
Diluted EPS amounts excluded from GAAP:
Impairment and other ⁽¹⁾		0.36			0.05
Other income / expense ⁽²⁾		—			0.18
Tax reserves benefit ⁽³⁾		(0.04	)		—
Adjusted diluted earnings per share (non-GAAP)	$	0.70		$	1.60

Notes on Non-GAAP Adjustments:

(1)

For the first quarter of 2023, impairment and other included transformation consulting expense of $19 million, impairment charges of $18 million, primarily accelerated tenancy charges on right-of-use assets for the closures of the Sidestep banner and certain Foot Locker Asia stores, and $2 million of reorganizations costs, primarily related to the announced closure of a North American distribution center, and other costs associated with the closures of the Sidestep banner and certain Foot Locker Asia stores.

For the first quarter of 2022, impairment and other included $3 million of impairment of long-lived assets and right-of-use assets and accelerated tenancy charges, $2 million of acquisition and integration costs related to WSS and atmos, and $1 million of other expenses.

(2)

For the first quarter of 2023, other expense represented of our share of losses related to equity method investments of $1 million.

For the first quarter of 2022, other expense primarily consisted of a $25 million loss on the change in fair value of our previous investment in Retailors, Ltd., a publicly-listed entity, which was partially offset by $1 million of dividend income and income from other various equity method investments.

(3)	In the first quarter of 2023, the Company recorded a $4 million benefit related to income tax reserves due to a statute of limitations release.

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Sales by Banner

(unaudited)

Periods ended April 29, 2023 and April 30, 2022

(In millions)

	First Quarter
	2023		2022		Constant Currencies			Comparable Sales
Foot Locker	$	744	$	807		(7.2	)%		(5.5	)%
Champs Sports		328		454		(27.3	)		(24.6	)
Kids Foot Locker		167		180		(7.2	)		(7.7	)
WSS		150		138		8.7			(3.4	)
Other		—		53		(100.0	)		n.m.
North America		1,389		1,632		(14.5	)		(12.8	)
Foot Locker		379		377		3.7			2.1
Sidestep		14		24		(41.7	)		(37.8	)
EMEA		393		401		1.0			(0.1	)
Foot Locker		98		93		12.9			11.2
atmos		47		49		6.1			2.7
Asia Pacific		145		142		10.6			8.9
Total	$	1,927	$	2,175		(10.0	)%		(9.1	)%

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Condensed Consolidated Balance Sheets

(unaudited)

(In millions)

	April 29,		April 30,
	2023		2022
ASSETS

Current assets:
Cash and cash equivalents	$	313	$	551
Merchandise inventories		1,758		1,401
Other current assets		384		281
		2,455		2,233
Property and equipment, net		901		899
Operating lease right-of-use assets		2,331		2,566
Deferred taxes		94		79
Goodwill		781		783
Other intangible assets, net		421		441
Minority investments		629		759
Other assets		89		118
	$	7,701	$	7,878

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	474	$	565
Accrued and other liabilities		505		428
Current portion of long-term debt and obligations under finance leases		6		6
Current portion of lease obligations		533		557
		1,518		1,556
Long-term debt and obligations under finance leases		445		450
Long-term lease obligations		2,132		2,323
Other liabilities		323		334
Total liabilities		4,418		4,663
Total shareholders' equity		3,283		3,215
	$	7,701	$	7,878

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Condensed Consolidated Statement of Cash Flows

(unaudited)

(In millions)

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
From operating activities:
Net income	$	36		$	132
Adjustments to reconcile net income to net cash from operating activities:
Non-cash impairment and other		18			3
Fair value adjustments to minority investments		—			25
Depreciation and amortization		51			54
Deferred income taxes		(4	)		3
Share-based compensation expense		2			7
Change in assets and liabilities:
Merchandise inventories		(117	)		(150	)
Accounts payable		(16	)		(25	)
Accrued and other liabilities		(30	)		(80	)
Other, net		(58	)		10
Net cash used in operating activities		(118	)		(21	)
From investing activities:
Capital expenditures		(59	)		(95	)
Purchase of business, net of cash acquired		—			(7	)
Minority investments		—			(3	)
Net cash used in investing activities		(59	)		(105	)
From financing activities:
Dividends paid on common stock		(38	)		(38	)
Purchase of treasury shares		—			(89	)
Payment of obligations under finance leases		(2	)		(2	)
Shares of common stock repurchased to satisfy tax withholding obligations		(10	)		(1	)
Proceeds from exercise of stock options		4			2
Net cash used in financing activities		(46	)		(128	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		—			(1	)
Net change in cash, cash equivalents, and restricted cash		(223	)		(255	)
Cash, cash equivalents, and restricted cash at beginning of year		582			850
Cash, cash equivalents, and restricted cash at end of period	$	359		$	595

-MORE-

Store Count and Square Footage

(unaudited)

Store activity is as follows:

	January 28,						April 29,		Relocations/
	2023		Opened		Closed		2023		Remodels
Foot Locker U.S.		747		-		6		741		3
Foot Locker Canada		86		-		1		85		4
Champs Sports		486		-		5		481		-
Kids Foot Locker		410		-		5		405		3
WSS		115		6		1		120		-
Footaction		2		-		-		2		-
North America		1,846		6		18		1,834		10
Foot Locker Europe		628		5		11		622		7
Sidestep		78		-		5		73		-
EMEA		706		5		16		695		7
Foot Locker Pacific		94		1		-		95		1
Foot Locker Asia		33		-		-		33		-
atmos		35		1		1		35		-
Asia Pacific		162		2		1		163		1
Total		2,714		13		35		2,692		18

Selling and gross square footage are as follows:

	April 30, 2022				April 29, 2023
(in thousands)	Selling		Gross		Selling		Gross
Foot Locker U.S.		2,393		4,134		2,351		4,025
Foot Locker Canada		253		417		251		413
Champs Sports		1,903		2,980		1,775		2,784
Kids Foot Locker		760		1,292		767		1,295
WSS		972		1,223		1,235		1,479
Footaction		59		104		6		11
North America		6,340		10,150		6,385		10,007
Foot Locker Europe		1,085		2,256		1,140		2,339
Sidestep		101		191		93		179
EMEA		1,186		2,447		1,233		2,518
Foot Locker Pacific		192		299		216		331
Foot Locker Asia		114		199		126		233
atmos		38		65		36		62
Asia Pacific		344		563		378		626
Total		7,870		13,160		7,996		13,151

- END -

Image Exhibit

Exhibit 99.2

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