All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak to our views only as of the date of this filing. Additional risks and uncertainties that we do not presently know about or that we currently consider to be insignificant may also affect our business operations and financial performance.

Please refer to “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission for a discussion of certain risks relating to our business and any investment in our securities. Given these risks and uncertainties, you should not rely on forward-looking statements as predictions of actual results. Any or all of the forward-looking statements contained in this report, or any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	*April 29,*			*April 30,*			*January 28,*
($ in millions, except share amounts)	*2023*			*2022*			2023*
ASSETS

Current assets:
Cash and cash equivalents	$	313		$	551		$	536
Merchandise inventories		1,758			1,401			1,643
Other current assets		326			281			342
		2,397			2,233			2,521
Property and equipment, net		901			899			920
Operating lease right-of-use assets		2,331			2,566			2,443
Deferred taxes		94			79			90
Goodwill		781			783			785
Other intangible assets, net		421			441			426
Minority investments		629			759			630
Other assets		89			118			92
	$	7,643		$	7,878		$	7,907

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	474		$	565		$	492
Accrued and other liabilities		447			428			568
Current portion of debt and obligations under finance leases		6			6			6
Current portion of lease obligations		533			557			544
		1,460			1,556			1,610
Long-term debt and obligations under finance leases		445			450			446
Long-term lease obligations		2,132			2,323			2,230
Other liabilities		323			334			328
Total liabilities		4,360			4,663			4,614
Commitments and contingencies
Shareholders’ equity:
Common stock and paid-in capital: 94,175,714; 99,233,112; and 93,396,901 shares issued, respectively		766			779			760
Retained earnings		2,923			2,995			2,925
Accumulated other comprehensive loss		(396	)		(384	)		(392	)
Less: Treasury stock at cost: 260,870; 4,731,931; and 1,489 shares, respectively		(10	)		(178	)		—
Noncontrolling interest		—			3			—
Total shareholders' equity		3,283			3,215			3,293
	$	7,643		$	7,878		$	7,907

The balance sheet at January 28, 2023 has been derived from the previously reported audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.’s Annual Report on Form 10-K for the year ended January 28, 2023.

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

First Quarter 2023 Form 10-Q Page 1

Table of Contents

~~FOOT LOCKER, INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~($ in millions, except shares)~~

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

October 28,

October 29,

January 28,

2017

2016

2017

(Unaudited)

(Unaudited)

*
ASSETS

Current assets:

Cash and cash equivalents
$
890

$
865

$
1,046
Merchandise inventories

1,313

1,361

1,307
Other current assets

295

291

280

2,498

2,517

2,633
Property and equipment, net

835

732

765
Deferred taxes

164

171

161
Goodwill

158

156

155
Other intangible assets, net

45

43

42
Other assets

113

75

84

$
3,813

$
3,694

$
3,840

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
241

$
215

$
249
Accrued and other liabilities

326

327

363
Current portion of capital lease obligations

—

1

—

567

543

612
Long-term debt and obligations under capital leases

126

127

127
Other liabilities

463

391

391
Total liabilities

1,156

1,061

1,130
Shareholders’ equity:

Common stock and paid-in capital: 133,336,171; 174,687,964; and 132,616,087 shares outstanding, respectively

921

1,168

900
Retained earnings

2,467

3,546

2,254
Accumulated other comprehensive loss

(286)

(353)

(363)
Less: Treasury stock at cost: 10,730,582; 42,326,538; and 1,120,466 shares, respectively

(445)

(1,728)

(81)
Total shareholders' equity

2,657

2,633

2,710

$
3,813

$
3,694

$
3,840

	*Thirteen weeks ended*
	*April 29,*			*April 30,*
($ in millions, except per share amounts)	*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

Basic earnings per share	$	0.39		$	1.38
Weighted-average shares outstanding		93.7			96.1

Diluted earnings per share	$	0.38		$	1.37
Weighted-average shares outstanding, assuming dilution		95.1			97.2

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

First Quarter 2023 Form 10-Q Page 2

Table of Contents

* The balance sheet at January 28, 2017 has been derived

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	*Thirteen weeks ended*
	*April 29,*			*April 30,*
($ in millions)	*2023*			*2022*
Net income attributable to Foot Locker, Inc.	$	36		$	133
Other comprehensive income (loss), net of income tax

Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax (benefit)/expense of $- and $(1), respectively		(7	)		(44	)

Hedges contracts:
Change in fair value of derivatives, net of income tax benefit of $-, and $-, respectively		1			1

Pension and postretirement adjustments:
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $1 and $1, respectively		2			2
Comprehensive income	$	32		$	92

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

First Quarter 2023 Form 10-Q Page 3

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

	*Additional Paid-In*													*Accumulated*
	*Capital &*													*Other*					*Total*
Thirteen weeks ended	*Common Stock*				*Treasury Stock*						*Retained*			*Comprehensive*			*Noncontrolling*		*Shareholders'*
(shares in thousands, $ in millions)	*Shares*		*Amount*		*Shares*			*Amount*			*Earnings*			*Loss*			*interests*		*Equity*
Balance at January 28, 2023		93,397	$	760		(1	)	$	—		$	2,925		$	(392	)	$	—	$	3,293
Restricted stock issued		628																		—
Issued under director and stock plans		151		4																4
Share-based compensation expense				2																2
Shares of common stock used to satisfy tax withholding obligations						(260	)	(10		)										(10	)
Net income												36								36
Cash dividends on common stock ($0.40 per share)												(38	)							(38	)
Translation adjustment, net of tax															(7	)				(7	)
Change in cash flow hedges, net of tax															1					1
Pension and postretirement adjustments, net of tax															2					2
Balance at April 29, 2023		94,176	$	766		(261	)	$	(10	)	$	2,923		$	(396	)	$	—	$	3,283

	*Additional Paid-In*													*Accumulated*
	*Capital &*													*Other*						*Total*
Thirteen weeks ended	*Common Stock*				*Treasury Stock*						*Retained*			*Comprehensive*			*Noncontrolling*			*Shareholders'*
(shares in thousands, $ in millions)	*Shares*		*Amount*		*Shares*			*Amount*			*Earnings*			*Loss*			*interests*			*Equity*
Balance at January 29, 2022		99,071	$	770		(2,050	)	$	(88	)	$	2,900		$	(343	)	$	4		$	3,243
Restricted stock issued		88																			—
Issued under director and stock plans		74		2																	2
Share-based compensation expense				7																	7
Shares of common stock used to satisfy tax withholding obligations						(32	)		(1	)											(1	)
Share repurchases						(2,650	)		(89	)											(89	)
Net income												133					(1		)		132
Cash dividends on common stock ($0.40 per share)												(38	)								(38	)
Translation adjustment, net of tax															(44	)					(44	)
Change in hedges, net of tax															1						1
Pension and postretirement adjustments, net of tax															2						2
Balance at April 30, 2022		99,233	$	779		(4,732	)	$	(178	)	$	2,995		$	(384	)	$	3		$	3,215

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

First Quarter 2023 Form 10-Q Page 4

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	*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		(87	)		(80	)
Other, net		(1	)		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

Supplemental information:
Interest paid	$	8		$	8
Income taxes paid		23			18
Cash paid for amounts included in measurement of operating lease liabilities		170			174
Cash paid for amounts included in measurement of finance lease liabilities		2			2
Right-of-use assets obtained in exchange for operating lease obligations		34			138

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

First Quarter 2023 Form 10-Q Page 5

Table of Contents

NOTES TO THE UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Business

Foot Locker, Inc., together with its consolidated subsidiaries (“Foot Locker,” “Company,” “we,” “our,” and “us”), is a leading footwear and apparel retailer. We have integrated all available shopping channels including stores, websites, apps, and social channels. Store sales are primarily fulfilled from the ~~previously reported audited financial statements~~store’s inventory, but may also be shipped from any of our distribution centers or from a different store location if an item is not available at ~~that date,~~the original store. Direct-to-customer orders are generally shipped to our customers through our distribution centers but ~~does~~ may also be shipped from any store or a combination of our distribution centers and stores depending on availability of particular items. We operate in North America, Europe, and Asia Pacific, representing our operating segments. We aggregate these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics.

Basis of Presentation

The accompanying interim Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and ~~footnotes~~notes required by U.S. ~~generally accepted accounting principles~~GAAP for complete financial statements. ~~For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.’s Annual Report on Form 10-K for the year ended January 28, 2017.~~

~~FOOT LOCKER, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited)~~

~~(in millions, except per share amounts)~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

Sales

$
1,870

$
1,886

$
5,572

$
5,653

Cost of sales

1,290

1,246

3,809

3,730
Selling, general and administrative expenses

368

366

1,078

1,077
Depreciation and amortization

44

40

127

118
Litigation and other charges

13

6

63

6
Income from operations

155

228

495

722

Interest (income) / expense, net

—

1

(1)

2
Other income

(1)

—

(2)

(3)
Income before income taxes

156

227

498

723
Income tax expense

54

70

165

248
Net income

$
102

$
157

$
333

$
475

  Basic earnings per share

$
0.81

$
1.18

$
2.57

$
3.53
  Weighted-average shares outstanding

126.0

132.9

129.6

134.6

  Diluted earnings per share

$
0.81

$
1.17

$
2.55

$
3.50
  Weighted-average shares outstanding, assuming dilution

126.4

134.0

130.3

135.7

~~See Accompanying Notes to Condensed Consolidated Financial Statements.~~

~~FOOT LOCKER, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~

~~($ in millions)~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016
Net income

$
102

$
157

$
333

$
475

Other comprehensive income, net of income tax:

Foreign currency translation adjustment:

Translation adjustment arising during the period, net of income tax

(4)

(14)

70

3

Cash flow hedges:

Change in fair value of derivatives, net of income tax

—

1

1

4

Available for sale securities:

Unrealized gain on available for sale securities

—

—

1

1

Pension and postretirement adjustments:

Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $1, $1, $3 and $3 million, respectively, and foreign currency fluctuations

2

3

5

5
Comprehensive income

$
100

$
147

$
410

$
488

~~See Accompanying Notes to Condensed Consolidated Financial Statements.~~

~~FOOT LOCKER, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

~~($ in millions)~~

Thirty-nine weeks ended

October 28,

October 29,

2017

2016 *

From operating activities:

   Net income
$
333

$
475
   Adjustments to reconcile net income to net cash provided by operating activities:

      Non-cash impairment charges

—

6
      Depreciation and amortization

127

118
      Share-based compensation expense

11

17
      Qualified pension plan contributions

(25)

(33)
      Change in assets and liabilities:

         Merchandise inventories

18

(77)
         Accounts payable

(13)

(66)
         Accrued and other liabilities

(29)

(3)
         Pension litigation accrual

50

—
         Other, net

24

40
Net cash provided by operating activities

496

477

From investing activities:

   Capital expenditures

(204)

(193)
Net cash used in investing activities

(204)

(193)

From financing activities:

   Purchase of treasury shares

(362)

(352)
   Dividends paid on common stock

(120)

(111)
   Proceeds from exercise of stock options

12

24
   Treasury stock reissued under employee stock plan

5

4
   Shares of common stock repurchased to satisfy tax withholding obligations

(10)

(6)
   Payment of revolving credit agreement costs

—

(2)
Net cash used in financing activities

(475)

(443)

Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash

30

4
Net change in cash, cash equivalents, and restricted cash

(153)

(155)
Cash, cash equivalents, and restricted cash at beginning of period

1,073

1,048
Cash, cash equivalents, and restricted cash at end of period
$
920

$
893

Cash paid during the period:

   Interest
$
6

$
6
   Income taxes
$
187

$
271

~~See Accompanying Notes to Condensed Consolidated Financial Statements.~~

* Amounts for the thirty-nine weeks ended October 29, 2016 have been revised from previously reported amounts to reflect the adoption of new accounting standards in the first quarter of 2017. For additional information, see the ~~Recently Adopted Accounting Pronouncements~~ ~~note.~~

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~1. Summary of Significant Accounting Policies~~

~~Basis of Presentation~~

~~The accompanying condensed consolidated financial statements contained in this report are unaudited.~~ In the opinion of management, ~~the condensed consolidated financial statements include~~ all adjustments (consisting of normal recurring ~~adjustments~~accruals) considered necessary for a fair presentation of the results for the interim periods of the fiscal year ending February 3, 2018 and of the fiscal year ended January 28, 2017. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates.have been included. The results of operations for any interim period are not necessarily indicative of the results expected for the year. Additionally, the results of operations for the period ended April 29, 2023 are not necessarily indicative of the results to be expected for the full fiscal year due to the continued uncertainty of general economic conditions that may affect us for the remainder of the year. Fiscal year 2023 will include the 53-week period that ends on February 3, 2024.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in ~~Foot Locker, Inc.’s (the “Company”)~~our 2022 Form ~~10-K for~~10-K. Certain reclassifications have been made to prior period financial statements to conform to the ~~year ended January 28, 2017,~~current period presentation. In 2023, we separately present licensing revenue as ~~filed with~~a component of total revenue in the ~~U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017.~~Condensed Consolidated Statements of Operations, as previously licensing revenue was presented within other income / (expense), net.

There were no significant changes to the policies disclosed in Note 1,Summary of Significant Accounting Policies of our 2022 Form 10-K.

Recent Accounting Pronouncements

~~In May 2014, the~~ ~~Financial Accounting Standards Board (“FASB”) issued~~ ~~Accounting Standards Update (“ASU”)~~ ~~2014-09,~~ ~~Revenue from Contracts with Customers~~. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09, as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein. These ASUs can be adopted either retrospectively to each prior reporting period presented or ~~as a cumulative-effect adjustment as of the date of adoption~~. The Company expects a change in the timing of recognizing gift card breakage, sales relating to shipping and handling for undelivered orders, and a change in timing for the recognition of expenses related to direct-response advertising costs. In addition, we expect a balance sheet reclassification from inventory to other current assets relating to our right to recover products for our sales returns, as well as a change to the accounting for our unredeemed rewards for our loyalty program as a reduction to sales instead of recording the charge to cost of goods sold. Although we are in the process of finalizing the quantification of the effects on the areas discussed above, we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows. The Company expects to adopt the provisions of this standard using the modified retrospective method, which requires a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption.

~~In February 2016, the~~ ~~FASB~~ ~~issued~~ ~~ASU~~ ~~2016-02,~~ ~~Leases~~. This ASU requires lessees to recognize a lease liability and a right-of-use asset for all leases, as well as additional disclosure regarding leasing arrangements. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods therein, and requires a modified retrospective adoption, with earlier adoption permitted. The Company does not expect to adopt this ASU until required and is evaluating the effect of this guidance. The Company has historically presented a non-GAAP measure to adjust its balance sheet to present operating leases as if they were capital leases. Based upon that analysis and preliminary evaluation of the standard, we estimate the adoption will result in the addition of $3 billion to $4 billion of assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows.

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Income Taxes (Topic 740):Intra-Entity Transfers of Assets Other Than Inventory~~. ASU 2016-16 requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective and will be adopted by the Company for annual reporting periods beginning after December 15, 2017, including interim periods therein. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Upon adoption, a company would write off any income tax effects that had been deferred from past intercompany transactions involving non-inventory assets to opening retained earnings. In addition, an entity would record deferred tax assets with an offset to opening retained earnings for amounts that entity had previously not recognized under existing guidance but would recognize under the new guidance. Based on deferred tax amounts related to applicable past intercompany transactions and the foreign exchange rates as of October 28, 2017, we expect the adoption will result in an increase in deferred income tax assets of approximately $40 million to $45 million.

~~Other recently~~Recently issued accounting pronouncements did not, or are not believed by management to, have a material effect on ~~the Company’s~~our present or future consolidated financial statements.

52. Revenue

The table below presents sales disaggregated by sales channel, as well as licensing revenue earned from our various franchised arrangements. Sales are attributable to the channel in which the sales transaction is initiated.

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Sales by Channel
Stores	$	1,613	$	1,776
Direct-to-customers		314		399
Total sales		1,927		2,175
Licensing revenue		4		3
Total revenue	$	1,931	$	2,178

First Quarter 2023 Form 10-Q Page 6

Table of Contents

~~FOOT LOCKER, INC.~~

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Recently Adopted Accounting Pronouncements~~2. Revenue (continued)

~~In March 2016,~~Revenue is attributed to the ~~FASB issued ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting.~~ ~~ASU 2016-09 simplifies~~country in which the ~~accounting for share-based payment transactions, including tax consequences, forfeitures,~~transaction is fulfilled, and ~~classifications of the tax related items~~revenue by geographic area is presented in the ~~statement of cash flows. The Company adopted ASU 2016-09 during~~following table.

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Revenue by Geography
United States	$	1,287	$	1,544
International		644		634
Total revenue	$	1,931	$	2,178

Sales by banner and operating segment are presented in the ~~first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies~~following table.

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Foot Locker	$	744	$	807
Champs Sports		328		454
Kids Foot Locker		167		180
WSS		150		138
Other ⁽¹⁾		—		53
North America		1,389		1,632
Foot Locker		379		377
Sidestep		14		24
EMEA		393		401
Foot Locker		98		93
atmos		47		49
Asia Pacific		145		142
Total sales	$	1,927	$	2,175

⁽¹⁾	Other includes sales from banners that we no longer operate and primarily represented Eastbay in the prior-year period.

Contract Liabilities

We sell gift cards, which do not have ~~been adopted prospectively. For~~expiration dates. Revenue from gift card sales is recorded when the ~~thirteen and thirty-nine weeks ended October 28,2017, the Company recorded excess tax benefits related to share-based compensation awards of $2 million and $9 million, respectively,~~gift cards are redeemed by customers. Breakage income is recognized as revenue in proportion to the ~~income statement, within~~pattern of rights exercised by the ~~income tax provision, whereas such benefits were previously recognized in equity. Also, in~~customer. The table below presents the ~~diluted net earnings per share calculation, when applying~~activity of our gift card liability balance.

	*April 29,*			*April 30,*
($ in millions)	*2023*			*2022*
Gift card liability at beginning of year	$	36		$	46
Redemptions		(61	)		(65	)
Breakage recognized in sales		(4	)		(4	)
Activations		56			60
Gift card liability	$	27		$	37

We elected not to disclose the ~~treasury stock method for shares that could be repurchased, the assumed proceeds no longer include~~information about remaining performance obligations since the amount of ~~excess tax benefits. This ASU also requires that we present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement~~gift cards redeemed after 12 months is not significant.

First Quarter 2023 Form 10-Q Page 7

Table of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $16 million which were previously classified as cash flows from financing activities to operating activities for the thirty-nine weeks ended October 29, 2016. Additionally, the presentation of employee taxes paid to taxing authorities for share-based transactions of $6 million, previously classified as cash flows from operating activities, were reclassified to financing activities for the thirty-nine weeks ended October 29, 2016. The Company has made a policy election of recording forfeitures as they occur instead of estimating forfeitures using a modified retrospective approach. The cumulative effect of this change was not significant.Contents

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Segment Information

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash.~~ ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU is effective for annual reporting periods beginning after December 15, 2017 including interim periods therein. The Company has adopted this ASU as of the first quarter of 2017. ~~Accordingly, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $28 million as of October29,2016 and $27 million as of both January 30, 2016, and January 28, 2017. Please see Note 5,~~ ~~Restricted Cash~~, for a reconciliation of cash and cash equivalents as presented on our condensed consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our condensed consolidated statements of cash flows.

2~~. Segment Information~~

~~The Company has determined that its~~Foot Locker operates one reportable segments are those that are based on its method of internal reporting. The Company has two reportable segments, Athletic Stores and Direct-to-Customers. The Company evaluates performance based on several factors, of which the primary financial measure is division results.segment. Division profit reflects income before income taxes, ~~pension litigation charge, reorganization charge,~~impairment and other, corporate expense, ~~non-operating~~other income / (expense), net, and net interest ~~(income) /~~ expense.

	*Thirteen weeks ended*
	*April 29,*			*April 30,*
($ in millions)	*2023*			*2022*
Division profit	$	104		$	263
Less: Impairment and other ⁽¹⁾		39			6
Less: Corporate expense ⁽²⁾		4			37
Income from operations		61			220
Interest expense, net		(1	)		(5	)
Other income / (expense), net ⁽³⁾		(3	)		(25	)
Income before income taxes	$	57		$	190

⁽¹⁾	See Note 4,Impairment and Other Charges for further detail.
⁽²⁾	Corporate expense consists of unallocated selling, general and administrative expenses, as well as depreciation and amortization related to our corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items.
⁽³⁾	See Note 5,Other Income / (Expense), net.

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016
Sales

($ in millions)
Athletic Stores

$
1,612

$
1,644

$
4,819

$
4,955
Direct-to-Customers

258

242

753

698
Total sales

$
1,870

$
1,886

$
5,572

$
5,653
Operating Results

Athletic Stores (1)

$
154

$
213

$
504

$
683
Direct-to-Customers

26

32

88

92
Division profit

180

245

592

775
Less: Pension litigation and reorganization charges (2), (3)

13

—

63

—
Less: Corporate expense

12

17

34

53
Operating profit

155

228

495

722
Interest (income) / expense, net

—

1

(1)

2
Other income (4)

1

—

2

3
Income before income taxes

$
156

$
227

$
498

$
723

4. Impairment and Other

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Transformation consulting	$	19	$	—
Impairment of long-lived assets and right-of-use assets		18		3
Reorganization costs		2		—
Acquisition and integration costs		—		2
Other		—		1
Total impairment and other	$	39	$	6

For the thirteen weeks ended April 29, 2023, we incurred $19 million of transformation consulting expense. We recorded 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. Additionally, we recorded reorganization costs of $2 million related to the announced closure of a North American distribution center and costs associated with the closure of the Sidestep banner and certain Foot Locker Asia stores.

First Quarter 2023 Form 10-Q Page 8

Table of Contents

~~FOOT LOCKER, INC.~~

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. Other Income / (Expense), net

~~(1)~~	Included in the thirteen and thirty-nine weeks ended October 29, 2016 is a $6 million pre-tax non-cash impairment charge to write down long-lived store assets of Runners Point and Sidestep. See Note 3, ~~Litigation and Other Charges~~ ~~for additional information.~~
~~(2)~~	~~Included in the thirty-nine weeks ended October 28, 2017 is a pre-tax charge of $50 million relating to a pension litigation matter described further in Note 14, Legal Proceedings.~~
~~(3)~~	Included in the thirteen and thirty-nine weeks ended October 28, 2017 is $13 million in pre-tax reorganization costs related to the reduction and reorganization of division and corporate staff that occurred in the third quarter of 2017, described more fully in Note 3, Litigation and Other Charges.
~~(4)~~	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries, and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

	*Thirteen weeks ended*
	*April 29,*			*April 30,*
($ in millions)	*2023*			*2022*
Pension and postretirement net benefit expense, excluding service cost	$	(2	)	$	—
Share of losses related to minority investments		(1	)		—
Minority investment in Retailors, Ltd.		—			(25	)
Total other income / (expense), net	$	(3	)	$	(25	)

~~3. Litigation~~6. Cash, Cash Equivalents, and ~~Other Charges~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)
Pension litigation charge

$
—

$
—

$
50

$
—
Reorganization costs

13

—

13

—
Impairment of long-lived assets

—

6

—

6
Total litigation and other charges

$
13

$
6

$
63

$
6

During the third quarter of 2017, the Company reorganized its organizational structure by adjusting certain divisional responsibilities between our various businesses. As a result of this, as well as certain corporate staff reductions taken to improve corporate efficiency, the Company recorded a charge of $13 million. The charge consisted primarily of severance payments and benefit continuation costs for approximately 190 associates. The following is a reconciliation of the accrual for the quarter ended October 28,~~2017:~~

Severance and

Other Related

Benefit Costs

Charges

Total

($ in millions)
Balance at January 28, 2017

$
—

$
—

$
—
Amounts charged to expense

11

2

13
Cash payments

(2)

—

(2)
Balance at October 28, 2017

$
9

$
2

$
11

~~As more fully discussed in Note 14,~~ ~~Legal Proceedings,~~ ~~during the second quarter of 2017 the Company recorded a $50 million pension litigation charge.~~

Included in the thirteen and thirty-nine weeks ended October 29, 2016 is a non-cash charge of $6 million to write down store fixtures and leasehold improvements related to the Runners Point and Sidestep businesses.

~~4. Hurricane-Related Costs~~

Hurricanes Harvey, Irma, and Maria adversely affected the Company’s third quarter of 2017 operations and resulted in the closure of approximately 450 of the Company’s retail stores for varying periods of time. As of October28, 2017, 22 of these stores remain closed in Puerto Rico. The Company expects to re-open 8 of the remaining stores during the fourth quarter of 2017 and an additional 7 stores during the early part of 2018, dependent on timing of repairs and mall openings. Currently, we do not expect to re-open the balance of the stores.Restricted Cash

The Company recorded a $7 million charge associated with its retail stores that were damaged by the hurricanes. This charge was recorded as a component of selling, general and administrative expenses in the Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended October 28, 2017. The charge reflects estimated property damages and other costs of $2 million and inventory write-offs of $5 million. The Company is working with its insurance providers to determine if any of the losses can be recovered.

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~5. Restricted Cash~~

~~The following~~ table below provides a reconciliation of cash and cash equivalents, as reported on our ~~condensed consolidated balance sheets,~~Condensed Consolidated Balance Sheets, to cash, cash equivalents, and restricted cash, as reported on our ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~cash flows.~~Cash Flows.

October 28,

October 29,

January 28,


2017

2016

2017

($ in millions)
Cash and cash equivalents

$
890

$
865

$
1,046
Restricted cash included in other current assets

1

—

—
Restricted cash included in other non-current assets

29

28

27
Cash, cash equivalents, and restricted cash

$
920

$
893

$
1,073

	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Cash and cash equivalents	$	313	$	551
Restricted cash included in other current assets		13		8
Restricted cash included in other non-current assets		33		36
Cash, cash equivalents, and restricted cash	$	359	$	595

Amounts included in restricted cash primarily relate to amounts held in escrow in connection with various leasing arrangements in ~~Europe. In addition, restricted cash reflects~~Europe and deposits held in insurance trusts ~~in order~~ to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims.

~~6. Goodwill~~

Annually during the first quarter, or more frequently if impairment indicators arise, the Company reviews goodwill and intangible assets with indefinite lives for impairment. The annual review of goodwill and intangible assets with indefinite lives performed during the first quarter of 2017 did not result in the recognition of impairment. The following table provides a summary of goodwill by reportable segment. The change in the balance represents foreign currency exchange fluctuations.

October 28,

October 29,

January 28,


2017

2016

2017

($ in millions)
Athletic Stores

$
18

$
17

$
16
Direct-to-Customers

140

139

139
Total goodwill

$
158

$
156

$
155

7. ~~Other Intangible Assets, net~~

~~The components of finite-lived intangible assets and intangible assets not subject to amortization are as follows:~~

October 28, 2017

October 29, 2016

January 28, 2017

Gross

Accum.

Net

Gross

Accum.

Net

Gross

Accum.

Net
($ in millions)

value

amort.

value

value

amort.

value

value

amort.

value
Amortized intangible assets: (1)

Lease acquisition costs

$
129

$
(117)

$
12

$
118

$
(107)

$
11

$
116

$
(105)

$
11

Trademarks / trade names

20

(13)

7

20

(13)

7

20

(13)

7

Favorable leases

7

(6)

1

7

(5)

2

7

(5)

2

$
156

$
(136)

$
20

$
145

$
(125)

$
20

$
143

$
(123)

$
20
Indefinite life intangible assets: (1)

Runners Point Group trademarks / trade names

$
25

$
23

$
22
Other intangible assets, net

$
45

$
43

$
42


~~(1)~~	~~The change in the ending balances also reflects the effect of foreign currency fluctuations due primarily to the movements of the euro in relation to the U.S. dollar.~~

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~During the thirty-nine week period ended~~ ~~October, 28 2017, the Company recorded $2~~ million of lease acquisition additions, primarily related to our European businesses. These additions are being amortized over a weighted-average life of 10 years. Amortization expense recorded is as follows:

Thirteen weeks ended

Thirty-nine weeks ended
($ in millions)

October 28, 2017

October 29, 2016

October 28, 2017

October 29, 2016
Amortization expense

$
1

$
1

$
3

$
3

~~Estimated future amortization expense for finite-life intangible assets is as follows:~~

($ in millions)
Remainder of 2017
$
1
2018

4
2019

4
2020

3
2021

2
2022

2

8. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss (“AOCL”), net of tax, is comprised of the following:



	October 28,		October 29,		January 28,
	2017		2016		2017
	($ in millions)
							*April 29,*			*April 30,*			*January 28,*
($ in millions)							*2023*			*2022*			*2023*
Foreign currency translation adjustments	$	(57)	$	(116)	$	(127)	$	(155	)	$	(151	)	$	(148	)
Cash flow hedges		2		6		1
Hedge contracts								(2	)		1			(3	)
Unrecognized pension cost and postretirement benefit		(231)		(243)		(236)		(239	)		(234	)		(241	)
Unrealized loss on available-for-sale security		—		—		(1)
	$	(286)	$	(353)	$	(363)
							$	(396	)	$	(384	)	$	(392	)

The changes in AOCL for the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~April 29, 2023 were as follows:

	*Foreign*						*Items Related*
	*Currency*						*to Pension and*
	*Translation*			*Hedge*			*Postretirement*
($ in millions)	*Adjustments*			*Contracts*			*Benefits*			*Total*
Balance as of January 28, 2023	$	(148	)		(3	)	$	(241	)	$	(392	)

OCI before reclassification		(7	)		3			—			(4	)
Reclassification of hedges, net of tax		—			(2	)		—			(2	)
Amortization of pension actuarial loss, net of tax		—			—			2			2
Other comprehensive income		(7	)		1			2			(4	)
Balance as of April 29, 2023	$	(155	)	$	(2	)	$	(239	)	$	(396	)

Items Related

Foreign Currency

to Pension and

Unrealized Loss on

Translation

Cash Flow

Postretirement

Available-For-

($ in millions)

Adjustments

Hedges

Benefits

Sale Security

Total
Balance as of January 28, 2017

$
(127)

$
1

$
(236)

$
(1)

$
(363)
OCI before reclassification

70

1

(1)

1

71
Reclassified from AOCL

—

—

6

—

6
Other comprehensive income

70

1

5

1

77
Balance as of October 28, 2017

$
(57)

$
2

$
(231)

$
—

$
(286)

First Quarter 2023 Form 10-Q Page 9

Table of Contents

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Accumulated Other Comprehensive Loss (continued)

Reclassifications from AOCL for the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~April 29, 2023 were as follows:

($ in millions)
Reclassification of hedge loss:
Cross-currency swap	$	(2	)
Income tax		—
Reclassification of hedges, net of tax	$	(2	)

Amortization of actuarial loss:
Pension benefits	$	3
Income tax benefit		(1	)
Amortization of actuarial loss, net of tax	$	2
Total, net of tax	$	—



		~~($ in millions)~~
~~Amortization of actuarial (gain) loss:~~
~~Pension benefits- amortization of actuarial loss~~	$	10
~~Postretirement benefits- amortization of actuarial gain~~		~~(1)~~
~~Net periodic benefit cost (see Note 12)~~		9
~~Income tax benefit~~		~~(3)~~
~~Net of tax~~	$	6

8. Fair Value Measurements

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~9. Financial Instruments~~

The Company operates internationally and utilizes certain derivative financial instruments to mitigate its foreign currency exposures, primarily related to third-party and intercompany forecasted transactions. As a result of the use of derivative instruments, the Company is exposed to the risk that counterparties will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a ~~practice~~ of entering into contracts only with major financial institutions selected based upon their credit ratings and other financial factors. The Company monitors the creditworthiness of counterparties throughout the duration of the derivative instrument. Additional information is contained within Note 10, ~~Fair Value Measurements~~.

~~Derivative Holdings Designated as Hedges~~

For a derivative to qualify as a hedge at inception and throughout the hedged period, the Company formally documents the nature of the hedged items and the relationships between the hedging instruments and the hedged items, as well as its risk-management objectives, strategies for undertaking the various hedge transactions, and the methods of assessing hedge effectiveness and ineffectiveness. In addition, for hedges of forecasted transactions, the significant characteristics and expected terms of a forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction would occur. If it were deemed probable that the forecasted transaction would not occur, the gain or loss on the derivative instrument would be recognized in earnings immediately. The amount of such gains or losses that were recognized in earnings during the thirty-nine weeks ended October 28, 2017 was not significant and there were no such gains or losses in the corresponding prior-year period. Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period, which management evaluates periodically.

The primary currencies to which the Company is exposed are the euro, British pound, Canadian dollar, and Australian dollar. For the most part, merchandise inventories are purchased by each geographic area in their respective local currency. The most significant exception to this is the United Kingdom, whose merchandise inventory purchases are denominated in euros. For option and foreign exchange forward contracts designated as cash flow hedges of the purchase of inventory, the effective portion of gains and losses is deferred as a component of AOCL and is recognized as a component of cost of sales when the related inventory is sold. The amount reclassified to cost of sales related to such contracts was not significant for any of the periods presented. The effective portion of gains or losses associated with other forward contracts is deferred as a component of AOCL until the underlying transaction is reported in earnings. The ineffective portion of gains and losses related to cash flow hedges recorded to earnings was also not significant for any of the periods presented. When using a forward contract as a hedging instrument, the Company excludes the time value of the contract from the assessment of effectiveness. At quarter-end, substantially all of the Company’s hedged forecasted transactions were less than twelve months into the future, and the Company expects the derivative-related amounts reported in AOCL to be reclassified to earnings within twelve months.

The net change in the fair value of the foreign exchange derivative financial instruments designated as cash flow hedges was not significant for the thirteen weeks ended October 28, 2017 and was a $1 million gain for the thirty-nine weeks ended October 28, 2017. At October 28, 2017, a $2 million gain remained in AOCL. For the thirteen and thirty-nine weeks ended October 29, 2016, the net change in fair value was a $1 million and $4 million gain, respectively. The notional value of the foreign exchange contracts designated as hedges outstanding at October 28, 2017 was $138 million, and these contracts mature at various dates through January 2019.

~~Derivative Holdings Not Designated as Hedges~~

The Company enters into certain derivative contracts that are not designated as hedges, such as foreign exchange forward contracts and currency option contracts. These derivative contracts are used to manage certain costs of foreign currency-denominated merchandise purchases, intercompany transactions, and the effect of fluctuating foreign exchange rates on the reporting of foreign currency-denominated earnings. Changes in the fair value of derivative holdings not designated as hedges, as well as realized gains and premiums paid, are recorded in earnings immediately within selling, general and administrative expenses or other income, depending on the type of transaction. The net change in fair value was not significant for the thirteen and thirty-nine weeks ended October 28, 2017.

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The net change in fair value resulted in income of $1 million for the thirteen weeks ended October 29, 2016, and was not significant for the thirty-nine weeks ended October 29, 2016. The notional value of the foreign exchange contracts not designated as hedges outstanding at October 28, 2017 was $2 million, and these contracts mature in November 2017.

From time to time, the Company mitigates the effect of fluctuating foreign exchange rates on the reporting of foreign-currency denominated earnings by entering into currency option contracts. Changes in the fair value of these foreign currency option contracts, which are not designated as hedges, are recorded in earnings immediately within other income. The realized gains, premiums paid, and changes in the fair market value recorded were not significant for any of the periods presented. No such contracts were outstanding at October 28, 2017.

~~Fair Value of Derivative Contracts~~

The following represents the fair value of the Company’s derivative contracts. Many of the Company’s agreements allow for a netting arrangement. The following is presented on a gross basis, by type of contract:

Balance Sheet

October 28,

October 29,

January 28,
($ in millions)

Caption

2017

2016

2017
Hedging Instruments:

Foreign exchange forward contracts

Current assets

$
2

$
7

$
3
Foreign exchange forward contracts

Current liabilities

$
1

$
—

$
3
Non-hedging Instruments:

Foreign exchange forward contracts

Current assets

$
—

$
1

$
—

~~10. Fair Value Measurements~~

~~The Company’s~~Our financial assets ~~recorded at fair value are categorized as follows:~~


	~~Level 1~~ –	~~Quoted prices for identical instruments in active markets.~~


	~~Level 2 –~~	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

	~~Level 3 –~~	~~Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.~~

~~The following tables provide a summary of the Company’s recognized assets~~ and liabilities ~~that are measured at fair value on a recurring basis:~~

As of October 28, 2017

As of October 29, 2016

As of January 28, 2017

($ in millions)

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3
Assets

Available-for-sale securities

$
—

$
7

$
—

$
—

$
7

$
—

$
—

$
6

$
—
Foreign exchange forward contracts

—

2

—

—

8

—

—

3

—
Total Assets

$
—

$
9

$
—

$
—

$
15

$
—

$
—

$
9

$
—
Liabilities

Foreign exchange forward contracts

—

1

—

—

—

—

—

3

—
Total Liabilities

$
—

$
1

$
—

$
—

$
—

$
—

$
—

$
3

$
—

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Securities classified as available-for-sale~~ are recorded at fair value, ~~with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized gains or losses are determined to be other than temporary. The~~using a three-level fair value ofhierarchy that prioritizes the ~~auction rate security is determined by using quoted prices for similar instruments in active markets and accordingly is classified as a Level 2 instrument.~~inputs used to measure fair value.

~~The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require~~Assets and Liabilities Measured at Fair Value on a ~~variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility and therefore are classified as Level 2 instruments.~~Recurring Basis

($ in millions)	*As of April 29, 2023*						*As of April 30, 2022*
	*Level 1*		*Level 2*		*Level 3*		*Level 1*		*Level 2*		*Level 3*
Assets
Minority investment in common stock	$	—	$	—	$	—	$	120	$	—	$	—
Available-for-sale security		—		6		—		—		6		—
Foreign exchange forward contracts		—		—		—		—		2		—
Total assets	$	—	$	6	$	—	$	120	$	8	$	—
Liabilities
Contingent consideration	$	—	$	—	$	4	$	—	$	—	$	35
Foreign exchange forward contracts		—		1		—		—		—		—
Total liabilities	$	—	$	1	$	4	$	—	$	—	$	35

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.

~~The carrying value and estimated fair value of long-term debt and obligations under capital leases were as follows:~~Long-Term Debt

October 28,

October 29,

January 28,

2017

2016

2017

($ in millions)
Carrying value

$
126

$
128

$
127
Fair value

$
145

$
150

$
148

The fair value of long-term debt is determined by using model-derived valuations in which all significant inputs or significant value drivers are observable in active markets and, therefore, are classified as Level 2. The carrying value and estimated fair value of long-term debt were as follows:

($ in millions)	*April 29, 2023*		*April 30, 2022*
Carrying value ⁽¹⁾	$	395	$	394
Fair value	$	339	$	332

⁽¹⁾	The carrying value of debt as of April 29, 2023 and April 30, 2022 included $5 million and $6 million of issuer’s discount and costs, respectively.

The carrying values of cash and cash equivalents, and other current receivables and payables approximate their fair value.

First Quarter 2023 Form 10-Q Page 10

Table of Contents

~~11.~~

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9. Earnings Per Share

~~The Company accounts~~

We account for ~~and discloses~~ earnings per share (“EPS”) using the treasury stock method. Basic ~~earnings per share~~EPS is computed by dividing net income for the period by the weighted-average number of common shares outstanding at the end of the period. ~~Restricted stock awards, which contain non-forfeitable rights to dividends, are considered participating securities and are included in the calculation of basic earnings per share.~~ Diluted earnings per share reflects the weighted-average number of common shares outstanding during the period used in the basic ~~earnings per share~~EPS computation plus dilutive common stock equivalents.

The computation of diluted earnings per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on EPS. The computation of basic and diluted ~~earnings per share~~EPS is as follows:



	Thirteen weeks ended					Thirty-nine weeks ended
		October 28,		October 29,		October 28,		October 29,
		2017		2016		2017		2016
		(in millions, except per share data)
Net Income		$	102	$	157	$	333	$	475

										*Thirteen weeks ended*
										*April 29,*		*April 30,*
(in millions, except per share data)										*2023*		*2022*
Net income attributable to Foot Locker, Inc.										$	36	$	133
Weighted-average common shares outstanding			126.0		132.9		129.6		134.6		93.7		96.1
Dilutive effect of potential common shares			0.4		1.1		0.7		1.1		1.4		1.1
Weighted-average common shares outstanding assuming dilution			126.4		134.0		130.3		135.7		95.1		97.2


Earnings per share - basic		$	0.81	$	1.18	$	2.57	$	3.53	$	0.39	$	1.38
Earnings per share - diluted		$	0.81	$	1.17	$	2.55	$	3.50	$	0.38	$	1.37


Anti-dilutive share-based awards excluded from diluted calculation			2.0		0.5		1.6		0.4		2.3		2.5

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The Company adopted ASU 2016-09 during the first quarter of 2017. As a result, excess tax benefits and tax deficiencies are no longer included as assumed proceeds in the calculation of diluted shares outstanding. This change was adopted prospectively.

Contingently issuable shares of 0.4 million and 0.3 million have not been included as the vesting conditions have not been satisfied as of October 28, 2017 and October 29, 2016, respectively. These shares relate to restrictedPerformance stock units ~~issued in connection with the Company’s~~related to our long-term incentive ~~program.~~

~~12. Pension~~ programs of 0.9 million been excluded from diluted weighted-average shares for each of the periods ended April 29, 2023 and ~~Postretirement Plans~~April 30, 2022. The issuance of these shares is contingent on our performance metrics as compared to the pre-established performance goals, which have not been achieved.

10. Pension

The Company has defined benefit pension plans covering certain of its North American employees, which are funded in accordance with the provisions of the laws where the plans are in effect. The Company also has a defined benefit pension plan covering certain employees of the Runners Point Group.

In addition to providing pension benefits, the Company sponsors postretirement medical and life insurance plans, which are available to most of its retired U.S. employees. These medical and life insurance plans are contributory and are not funded.

~~The following are the~~ components of net periodic pension benefit expense are presented in the table below. Service cost ~~and net periodic postretirement benefit income, which~~is recognized as part of SG&A expense, while the other components are recognized as part of ~~SG&A expense:~~Other income / (expense), net.

	*Thirteen weeks ended*
	*April 29,*			*April 30,*
($ in millions)	*2023*			*2022*
Service cost	$	1		$	4
Interest cost		6			5
Expected return on plan assets		(7	)		(8	)
Amortization of net loss		3			2
Net benefit expense	$	3		$	3

Pension Benefits

Postretirement Benefits

Thirteen weeks ended

Thirty-nine weeks ended

Thirteen weeks ended

Thirty-nine weeks ended

Oct. 28,

Oct. 29,

Oct. 28,

Oct. 29,

Oct. 28,

Oct. 29,

Oct. 28,

Oct. 29,
($ in millions)

2017

2016

2017

2016

2017

2016

2017

2016
Service cost

$
4

$
4

$
12

$
12

$
—

$
—

$
—

$
—
Interest cost

6

6

19

19

—

1

—

1
Expected return on plan assets

(9)

(9)

(28)

(27)

—

—

—

—
Amortization of net loss (gain)

3

4

10

11

—

(1)

(1)

(2)
Net benefit expense (income)

$
4

$
5

$
13

$
15

$
—

$
—

$
(1)

$
(1)

First Quarter 2023 Form 10-Q Page 11

Table of Contents

During the first quarter of 2017, the Company made a contribution of $25 million to the U.S. qualified plan. The Company continually evaluates the amount and timing of any future contributions. The Company currently does not expect to make any further pension plan contributions during this year.~~Actual contributions are dependent on several factors, including the outcome of the ongoing U.S. pension litigation. See Note 14,~~ ~~Legal Proceedings,~~ ~~for further information.~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~13.~~11. Share-Based Compensation

Total compensation expense, included in SG&A, and the associated tax benefits recognized related to ~~the Company’s~~our share-based compensation plans, were as follows:



	Thirteen weeks ended				Thirty-nine weeks ended
	October 28,		October 29,		October 28,		October 29,
	2017		2016		2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	2	$	3	$	7	$	8
Restricted stock and restricted stock units		1		3		4		9
									*Thirteen weeks ended*
									*April 29,*		*April 30,*
($ in millions)									*2023*		*2022*
Options and employee stock purchase plan									$	1	$	1
Restricted stock units and performance stock units										1		6
Total share-based compensation expense	$	3	$	6	$	11	$	17	$	2	$	7


Tax benefit recognized	$	1	$	2	$	3	$	5	$	—	$	1

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Valuation Model and Assumptions

~~The Company uses~~We use the Black-Scholes option-pricing model to estimate the fair value of ~~share-based awards.~~options and the stock purchase plan. The Black-Scholes option-pricing model incorporates various and ~~highly~~ subjective assumptions, including expected term and expected volatility.

During the first quarter of 2017, in connection with the adoption of ASU 2016-09, we have made the accounting policy election to discontinue estimating forfeitures and will account for forfeitures as they occur.

The ~~following~~ table below shows ~~the Company’s~~ assumptions used to compute share-based compensation expense for awards granted during the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~ April 29, 2023 and ~~October 29, 2016:~~April 30, 2022.

	*Stock Option Plans*						*Stock Purchase Plan*
	*April 29,*			*April 30,*			*April 29,*			*April 30,*
	*2023*			*2022*			*2023*			*2022*
Weighted-average risk free rate of interest		3.5	%		2.3	%		2.2	%		0.1	%
Expected volatility		49	%		50	%		40	%		40	%
Weighted-average expected award life (in years)		5.4			5.5			1.0			1.0
Dividend yield		3.6	%		3.9	%		3.7	%		1.8	%
Weighted-average fair value	$	14.09		$	10.42		$	7.16		$	29.46

Stock Option Plans

Stock Purchase Plan

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

Weighted-average risk free rate of interest

2.1
%

1.4
%

0.9
%

0.4
%
Expected volatility

25
%

30
%

29
%

27
%
Weighted-average expected award life (in years)

5.4

5.7

1.0

1.0

Dividend yield

1.9
%

1.7
%

2.0
%

1.7
%
Weighted-average fair value
$
14.74

$
15.71

$
10.84

$
14.04

The information in the ~~following~~ table ~~covers option~~below provides activity under ~~the Company’s~~our stock option plans for the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017:~~April 29, 2023.

				*Weighted-*		*Weighted-*
	*Number*			*Average*		*Average*
	of			*Remaining*		*Exercise*
	*Shares*			*Contractual Life*		*Price*
	(in thousands)			(in years)		(per share)
Options outstanding at the beginning of the year		3,256				$	47.85
Granted		294					39.08
Exercised		(151	)				24.60
Expired or cancelled		(148	)				36.71
Options outstanding at April 29, 2023		3,251			3.8	$	48.64
Options exercisable at April 29, 2023		2,783			2.9	$	50.48
Shares available for future grant at April 29, 2023 under the 2007 Stock Incentive Plan		888
Shares available for future grant at April 29, 2023 under the employment inducement award plan ⁽¹⁾		409

⁽¹⁾

On August 24, 2022, the Company granted options and other awards to its new President and Chief Executive Officer, Mary N. Dillon. These awards were granted outside of the 2007 Stock Incentive Plan as employment inducement awards and do not require shareholder approval under the rules of the New York Stock Exchange or otherwise. Shares available for future grant under this plan are reserved for the sole purpose to issue shares pursuant to her employment inducement awards.

Weighted-

Weighted-

Number

Average

Average

of

Remaining

Exercise

Shares

Contractual Life

Price

(in thousands)

(in years)

(per share)
Options outstanding at the beginning of the year

2,806

$
42.61
Granted

547

69.58
Exercised

(536)

21.38
Expired or cancelled

(19)

61.01
Options outstanding at October 28, 2017

2,798

6.7

$
51.82
Options exercisable at October 28, 2017

1,729

5.4

$
42.91
Options available for future grant at October 28, 2017

10,759

First Quarter 2023 Form 10-Q Page 12

Table of Contents

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Share-Based Compensation (continued)

The total fair value of options vested ~~as of October 28, 2017~~thirteen weeks ended April 29, 2023 and ~~October 29, 2016~~April 30, 2022 was $8$4 million ~~and $9 million, respectively.~~for both periods. The cash received from option exercises ~~for~~during the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017~~April 29, 2023 was $2$4 million, and ~~$12 million, respectively.~~the related tax benefits realized from option exercises were not significant. The cash received from option exercises ~~for~~during the thirteen ~~and thirty-nine~~ weeks ended ~~October 29, 2016~~April 30, 2022 was ~~$10~~$2 million, and ~~$24 million, respectively.~~the related tax benefits realized from option exercises were not significant.

The total intrinsic value of options exercised (the difference between the market price of ~~the Company’s~~our common stock on the exercise date and the price paid by the optionee to exercise the option) is presented below:

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)
Exercised
$
5

$
19

$
20

$
45

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Exercised	$	3	$	—

The total tax benefit realized from option exercises was $2 million and $8 million for the thirteen and thirty-nine weeks ended October 28, 2017. The total tax benefit realized from option exercises was $7 million and $17 million for the corresponding prior-year periods.

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The aggregate intrinsic value for stock options outstanding, and outstanding and exercisable ~~and vested and expected to vest~~ (the difference between ~~the Company’s~~our closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) is presented below:

Thirty-nine weeks ended

October 28,

October 29,

2017

2016

($ in millions)
Outstanding
$
5

$
78
Outstanding and exercisable
$
5

$
71
Vested and expected to vest
$
5

$
78

	*Thirteen weeks ended*
	*April 29,*		*April 30,*
($ in millions)	*2023*		*2022*
Outstanding	$	15	$	6
Outstanding and exercisable	$	13	$	4

As of ~~October 28, 2017~~April 29, 2023, there was $7$5 million of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a remaining weighted-average period of ~~1.5~~1.8 years.

The ~~following~~ table below summarizes information about stock options outstanding and exercisable at ~~October 28, 2017:~~April 29, 2023

Options Outstanding

Options Exercisable

Weighted-

Average

Weighted-

Weighted-

Remaining

Average

Average
Range of Exercise

Number

Contractual

Exercise

Number

Exercise
Prices

Outstanding

Life

Price

Exercisable

Price

(in thousands, except prices per share and contractual life)
$9.85 to $24.75

344

2.7

$
16.77

344

$
16.77
$30.92 to $45.75

787

5.5

38.33

747

38.50
$48.55 to $62.11

704

6.9

61.05

472

61.35
$63.79 to $73.21

963

8.8

68.60

166

64.35

2,798

6.7

$
51.82

1,729

$
42.91

	Options Outstanding						Options Exercisable
			Weighted-
			Average		Weighted-				Weighted-
			Remaining		Average				Average
Range of Exercise	Number		Contractual		Exercise		Number		Exercise
Prices	Outstanding		Life		Price		Exercisable		Price
	(in thousands, except prices per share and contractual life)
$21.60 - $36.51		855		5.2	$	25.40		708	$	23.82
$38.94 - $48.98		743		5.2		42.58		439		45.00
$53.61 - $58.94		482		3.3		56.73		465		56.84
$62.02 - $72.83		1,171		2.1		66.14		1,171		66.14
		3,251		3.8	$	48.64		2,783	$	50.48

~~Restricted Stock and~~

Restricted Stock Units and Performance Stock Units

Restricted ~~shares of the Company’s common stock and restricted~~ stock units (“RSU”) ~~may be~~are awarded to certain officers, ~~and~~ key employees of the ~~Company.~~Company, and nonemployee directors. Additionally, ~~RSU awards~~performance stock units (“PSU”) are ~~made~~awarded to officers and certain key employees in connection with ~~the Company’s~~our long-term incentive ~~program,~~program. Each RSU and ~~to nonemployee directors. Each RSU~~PSU represents the right to receive one share of ~~the Company’s~~our common stock provided that the applicable performance and vesting conditions are satisfied. ~~There were 361,137~~PSU awards granted in 2022 and ~~678,466 RSU~~2023 also include a performance objective based on our relative total shareholder return over the performance period to a pre-determined peer group, assuming the reinvestment of dividends. The fair value of these awards ~~outstanding~~is determined using a Monte Carlo simulation as of ~~October 28, 2017~~the date of the grant and ~~October 29, 2016, respectively.~~share-based compensation expense will not be adjusted should the target awards vary from actual awards.

First Quarter 2023 Form 10-Q Page 13

Table of Contents

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Share-Based Compensation (continued)

Generally, RSU awards fully vest after the passage of time, typically three ~~years. However, RSU~~ years for employees and one year for nonemployee directors, provided there is continued service with the Company until the vesting date, subject to the terms of the award. PSU awards ~~made~~are earned only after the attainment of performance goals in connection with the ~~Company’s performance-based long-term incentive program are earned after the attainment of certain~~relevant performance ~~metrics~~period and vest after ~~the passage of time.~~ Restricted stock is considered outstanding at the time of grant and the holders have voting rights. Dividends are paid to holders of restricted stock that vest with the passage of time. With regard to performance-based restricted stock, dividends will be accumulated and paid after the performance criteria are met.an additional one-year period. No dividends are paid or accumulated on any RSU or PSU awards. Compensation expense is recognized ~~using the market value at the date of grant and is amortized~~ over the vesting ~~period, provided the recipient continues to be employed by the Company.~~period.

~~FOOT LOCKER, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Restricted stock~~RSU and ~~RSU~~PSU activity for the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~April 29, 2023 is summarized as follows:

									*Weighted-*
									*Average*		*Weighted-*
			Weighted-
			Average	Weighted-
		Number	Remaining	Average
		of	Contractual	Grant Date
		Shares	Life	Fair Value
		(in thousands)	(in years)		(per share)
						*Number*			*Remaining*		*Average*
						of			*Contractual*		*Grant Date*
						*Shares*			*Life*		*Fair Value*
						(in thousands)			(in years)		(per share)
Nonvested at beginning of year		798		$	56.91		1,992				$	37.58
Granted		328			63.72		741					39.69
Vested		(286)			49.55		(628	)				34.12
Expired or cancelled		(447)			64.74
Nonvested at October 28, 2017		393	1.5	$	59.07
Performance adjustment ⁽¹⁾							(600	)
Forfeited							(99	)				39.79
Nonvested at April 29, 2023							1,406			1.8	$	40.80

Aggregate value ($ in millions)	$	23				$	57

⁽¹⁾	This represents adjustments made to PSUs reflecting changes in estimates based upon our current performance against predefined financial targets.

The total value of RSU and PSU awards ~~for which restrictions lapsed~~that vested during the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~ April 29, 2023 and ~~October 29, 2016~~April 30, 2022 was ~~$14~~$21 million and $8$5 million, respectively. As of ~~October 28, 2017,~~April 29, 2023, there was ~~$10~~$35 million of total unrecognized compensation cost related to nonvested ~~restricted~~ awards.

~~14.~~12. Legal Proceedings

Legal proceedings pending against the Company or its consolidated subsidiaries consist of ordinary, routine litigation, including administrative proceedings, incidental to the business of the Company or businesses that have been sold or ~~disposed of~~discontinued by the Company in past years. These legal proceedings include commercial, intellectual property, customer, environmental, and employment-related claims. Additionally, the Company is a defendant in two purported class actions alleging wage/hour and wage statement violations in California.

~~The Company and the Company’s U.S. retirement plan are defendants in a class action (Osberg v. Foot Locker Inc.~~ et ano., filed in the U.S. District Court for the Southern District of New York) in which the plaintiff alleges that, in connection with the 1996 conversion of the retirement plan to a defined benefit plan with a cash balance formula, the Company and the retirement plan failed to properly advise plan participants of the “wear-away” effect of the conversion. Plaintiff’s claims were for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended, and violation of the statutory provisions governing the content of the Summary Plan Description. During the third quarter of 2015, the trial court ruled that the retirement plan be reformed. ~~As a result of this development, the Company recorded a charge of $100 million pre-tax ($61 million after-tax) during the third quarter of 2015.~~

The Company appealed the trial court’s decision, and the judgment was stayed pending the outcome of the appeal process. During the second quarter of 2017, the Second Circuit Court of Appeals affirmed the trial court’s decision. In light of this development, the Company reassessed its estimate of the liability. The Company’s updated reasonable estimate of this liability is a range between $150 million and $260 million. The high end of the range reflects the estimated cost to reform the retirement plan in accordance with the court ruling; however, it excludes any legal fees that may be awarded to plaintiff’s counsel. No amount within that range is more probable than any other amount and therefore, in accordance with U.S. GAAP, the Company recorded a charge of $50 million pre-tax ($30 million after-tax) during the second quarter of 2017, bringing the cumulative amount accrued for this matter to $150 million. The accrual has been classified as a long-term liability. The Company will continue to vigorously defend itself in this case and on November 8, 2017 filed a Petition for Writ of Certiorari with the U.S. Supreme Court. In light of the uncertainties involved in this matter, there is no assurance that the ultimate resolution will We do not ~~differ from the amount currently accrued by the Company.~~

~~Management does not~~ believe that the outcome of any such legal proceedings pending against the Company or its consolidated subsidiaries, as described above, would have a material adverse effect on ~~the Company’s~~our consolidated financial position, liquidity, or results of operations, taken as a whole, based upon current knowledge and taking into consideration current accruals. Litigation is inherently ~~unpredictable, and judgments~~unpredictable. Judgments could be rendered or settlements ~~entered into~~made that could adversely affect the Company’s operating results or cash flows in a particular period.

First Quarter 2023 Form 10-Q Page 14

Table of Contents

Item2. ~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~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 on risks and uncertainties that may affect forward-looking statements, see “Risk Factors” ~~disclosed in the 2016 Annual Report on Form 10-K~~. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.

Business Overview

Foot Locker, Inc.~~, through its subsidiaries, operates in two reportable segments – Athletic Stores and Direct-to-Customers. The Athletic Stores segment~~ is ~~one of the largest athletic~~a leading footwear and apparel ~~retailers~~retailer that unlocks the "inner sneakerhead" in all of us. We have a strong history of sneaker authority that sparks discovery and ignites the ~~world, with formats that include~~power of sneaker culture through our portfolio of brands, including Foot Locker, Kids Foot Locker, ~~Lady Foot Locker,~~ Champs Sports, ~~Footaction, Runners Point, Sidestep,~~WSS, and SIX:02. The Direct-to-Customers segment includes Footlocker.com, Inc. and other affiliates, including Eastbay, Inc., and our international ecommerce businesses, which sell to customers through their Internet and mobile sites and catalogs.atmos.

~~The Foot Locker brand is one of~~Ensuring that our customers can engage with us in the most ~~widely recognized names~~convenient manner for them whether in our stores, on our website, or on our mobile application, is a high priority for us. We use our omni-channel capabilities to bridge the ~~markets in which we operate, epitomizing premium quality for the active lifestyle customer. This brand equity has aided our ability to successfully develop~~digital world and ~~increase our portfolio of complementary retail store formats, such as Lady Foot Locker~~physical stores, including order-in-store, buy online and ~~Kids Foot Locker,~~pickup-in-store, and buy online and ship-from-store, as well as ~~Footlocker.com, part~~e-commerce. We operate websites and mobile apps aligned with the brand names of our ~~direct-to-customer business. Through various marketing channels~~store banners. These sites offer some of the largest online product selections and ~~experiences, including social, digital, broadcast,~~provide a seamless link between e-commerce and ~~print media, as well as various sports sponsorships and events, we reinforce our image with a consistent message~~ — ~~namely, that we are the destination for premium athletically-inspired shoes and apparel with a wide selection of merchandise in a full-service environment.~~physical stores.

Store Count

At ~~October 28, 2017,~~April 29, 2023, we operated ~~3,349~~2,692 stores as compared with ~~3,363~~2,714 and ~~3,394~~2,815 stores at January 28, ~~2017~~2023 and ~~October 29, 2016,~~April 30, 2022, respectively.

During the first quarter of 2017, the Company entered into a franchise agreement with Fox-Wizel Ltd, for franchised stores operating in Israel. There are 13 franchised stores operating in Israel as of October 28, 2017. Also, during the second quarter of 2017, the Company terminated its franchise agreement with the third party that operated stores in the Republic of Korea.Franchise Operations

A total of 97163 franchised stores were operating at ~~October 28, 2017,~~April 29, 2023, as compared with 74159 and 71148 stores at January 28, ~~2017~~2023 and ~~October 29, 2016, respectively. Revenue from~~April 30, 2022, respectively, operating in the ~~franchised stores was not significant for any of the periods presented.~~Middle East and Asia. These stores are not included in the operating store count above.

Results of Operations

We evaluate performance based on several factors, primarily the banner’s financial results, referred to as division profit. Division profit reflects income before income taxes, impairment and other charges, corporate expenses, non-operating income, and net interest expense.

The table below summarizes our results for the period.

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Sales	$	1,927		$	2,175
Licensing revenue		4			3
Total revenue		1,931			2,178

Operating Results
Division profit		104			263
Less: Impairment and other ⁽¹⁾		39			6
Less: Corporate expense ⁽²⁾		4			37
Income from operations		61			220
Interest expense, net		(1	)		(5	)
Other income / (expense), net ⁽³⁾		(3	)		(25	)
Income before income taxes	$	57		$	190

⁽¹⁾	See the Impairment and Other Charges section for further information.
⁽²⁾	Corporate expense consists of unallocated selling, general and administrative expenses as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items.
⁽³⁾	Other income / (expense), net includes non-operating items, changes in fair value of minority interests measured at fair value or using the fair value measurement alternative, changes in the market value of our available-for-sale security, our share of earnings or losses related to our equity method investments, and net benefit expense related to our pension and postretirement programs excluding the service cost component. See the Other income / (expense), net section for further information.

First Quarter 2023 Form 10-Q Page 15

Table of Contents

Reconciliation of Non-GAAP Measures

~~The Company presents~~In addition to reporting our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), we report certain financial results that differ from what is reported under GAAP. We have presented certain financial measures identified as non-GAAP, ~~measures,~~ such as sales changes excluding foreign currency fluctuations, adjusted ~~net~~ income before income taxes, adjusted net income, and adjusted diluted earnings per share. ~~Throughout~~

We present certain amounts as excluding the ~~following discussions, where~~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.

We present these non-GAAP measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that are not indicative of our core business. Presenting amounts on a constant currency basis is useful to investors because it enables them to better understand the changes in our ~~businesses~~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 ~~the Company’s~~our progress in achieving ~~its~~our long-term financial objectives. 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, ~~to,~~ and not as an alternative, to ~~the Company’s~~our reported results prepared in accordance with GAAP. ~~The Company estimates the tax effect of the non-GAAP adjustments by applying its marginal rate to each of the respective items.~~

Presented below is a reconciliation of GAAP and ~~non-GAAP results for the thirteen and thirty-nine weeks ended October 28, 2017 and October 29, 2016, respectively.~~non-GAAP.

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)
Pre-tax income:

Income before income taxes

$
156

$
227

$
498

$
723
Pre-tax amounts excluded from GAAP:

Reorganization costs

13

—

13

—
Pension litigation charge

—

—

50

—
Impairment charge

—

6

—

6
Adjusted income before income taxes (non-GAAP)

$
169

$
233

$
561

$
729

After-tax income:

Net income

$
102

$
157

$
333

$
475
After-tax adjustments excluded from GAAP:

Reorganization costs, net of income tax benefit of $5 million

8

—

8

—
Pension litigation charge, net of income tax benefit of $20 million

—

—

30

—
Impairment charge, net of income tax benefit of $1 million

—

5

—

5
Tax benefit related to intellectual property reassessment

—

(10)

—

(10)
Adjusted net income (non-GAAP)

$
110

$
152

$
371

$
470

Earnings per share:

Diluted EPS

$
0.81

$
1.17

$
2.55

$
3.50
Diluted EPS amounts excluded from GAAP:

Reorganization costs

0.06

—

0.06

—
Pension litigation charge

—

—

0.23

—
Impairment charge

—

0.03

—

0.03
Tax benefit related to intellectual property reassessment

—

(0.07)

—

(0.07)
Adjusted diluted EPS (non-GAAP)

$
0.87

$
1.13

$
2.84

$
3.46

	Thirteen weeks ended
	April 29,			April 30,
($ in millions, except per share amounts)	2023			2022
Pre-tax income:
Income before income taxes	$	57		$	190
Pre-tax amounts excluded from GAAP:
Impairment and other		39			6
Other income / expense, net		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		33			4
Other income / expense, net of income tax benefit/(expense) of $-, and $6 million, respectively		1			18
Tax reserves benefit		(4	)		—
Adjusted net income (non-GAAP)	$	66		$	155

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

During the ~~third quarter~~thirteen weeks ended ~~October 28, 2017,~~April 29, 2023, we recorded pre-tax charges of $39 million and $6 million, respectively, classified as Impairment and Other. See the ~~Company reduced~~Impairment and ~~reorganized its division and corporate staff which resulted in a charge~~Other Charges section for further information.

First Quarter 2023 Form 10-Q Page 16

Table of ~~$13 million, $8 million after-tax~~Contents

The adjustments made to other income / (expense), net reflected gains or ~~$0.06 per share. The substantial majority of~~losses associated with our minority investments. See the ~~charge is~~Other Income / (Expense), net section for ~~severance and related costs.~~further information.

During the ~~second quarter~~thirteen weeks ended ~~July~~April 29, ~~2017, the Company~~2023, we recorded a ~~charge of $50~~$4 million ~~$30 million after-tax or $0.23 per share,~~benefit related to ~~pension litigation. Please see Item 1. “Financial Statements,” Note 14,~~ ~~Legal Proceedings~~ ~~for further information on this charge.~~

an income tax reserves release from a statute of limitations expiration.

~~In the third quarter of 2016, the Company recorded a $6 million, $5 million after-tax or $0.03 per share, impairment charge associated with underperforming store assets of Runners Point~~Segment Reporting and Sidestep. Also during the third quarter of 2016, the Company’s scheduled triennial reassessment of the value of intellectual property provided to our European business by Foot Locker in the U.S. resulted in a $10 million tax reduction.

Results of Operations

~~Sales~~We have determined that we have three operating segments, North America, EMEA, and Asia Pacific. Our North America operating segment includes the results of the following banners operating in the U.S. and Canada: Foot Locker, Champs Sports, Kids Foot Locker, and WSS, including each of their related e-commerce businesses. Our EMEA operating segment includes the results of the following banners operating in Europe: Foot Locker, Sidestep, and Kids Foot Locker, including each of their related e-commerce businesses. Our Asia Pacific operating segment includes the results of the Foot Locker banner and its related e-commerce business operating in Australia, New Zealand, and Asia, as well as atmos, which operates primarily in Asia. We have further aggregated these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics.

As reported in our Annual Report on Form 10-K, we announced the closure of the Sidestep banner and the wind down of our stores operating in Hong Kong and Macau. We currently expect to wind down the majority of operations by the end of the second quarter. Additionally during the second quarter, we will be transitioning our Singapore and Malaysian business to a licensed store model.

Sales

All references to comparable-store sales for a given period relate to sales of stores that were open at the period-end and had been open for more than one year. The computation of consolidated ~~comparable-store~~comparable sales also includes ~~the sales of the Direct-to-Customers segment.~~our direct-to-customers channel. Stores opened or closed during the period are not included in the comparable-store base; however, stores closed temporarily for relocation or remodeling are included. Computations exclude the effect of foreign currency fluctuations.

Sales ~~decreased by $16 million, or 0.8 percent, to $1,870 million for~~from acquired businesses that include inventory are included in the computation of comparable-store sales after the 15th month of operations. Accordingly, WSS comparable-store sales are included in the first quarter of 2023, while sales from the atmos banner only include two months in the computation of comparable-store sales.

For the thirteen weeks ended ~~October 28, 2017, from $1,886 million for the thirteen weeks ended October~~April 29, ~~2016. For the thirty-nine weeks ended October 28, 2017,~~2023, total sales decreased by ~~1.4 percent~~$248 million, or 11.4%, to ~~$5,572~~$1,927 million, ~~from sales of $5,653 million in~~as compared with the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales decreased by ~~2.3 and 1.5 percent~~$217 million, or 10.0%, for the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017, respectively. Comparable-store~~April 29, 2023. The information shown below represents certain sales ~~decreased~~metrics by ~~3.7~~sales channel.

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Store sales	$	1,613		$	1,776
$ Change	$	(163	)
% Change		(9.2	)%
% of total sales		83.7	%		81.7	%
Comparable sales (decrease) / increase		(7.4	)%		7.9	%
Direct-to-customers sales	$	314		$	399
$ Change	$	(85	)
% Change		(21.3	)%
% of total sales		16.3	%		18.3	%
Comparable sales decrease		(16.8	)%		(29.0	)%
Total sales	$	1,927		$	2,175
$ Change	$	(248	)
% Change		(11.4	)%
Comparable sales decrease		(9.1	)%		(1.9	)%

First Quarter 2023 Form 10-Q Page 17

Table of Contents

The information shown below represents certain combined stores and ~~2.9 percent~~direct-to-customers sales metrics for the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017, respectively. For~~April 29, 2023 as compared with the corresponding prior-year period.

	Thirteen weeks ended
	Constant Currencies			Comparable Sales
Foot Locker		(7.2	)%		(5.5	)%
Champs Sports		(27.3	)%		(24.6	)%
Kids Foot Locker		(7.2	)%		(7.7	)%
WSS		8.7	%		(3.4	)%
Other		n.m.			n.m.
North America		(14.5	)%		(12.8	)%
Foot Locker		3.7	%		2.1	%
Sidestep		(41.7	)%		(37.8	)%
EMEA		1.0	%		(0.1	)%
Foot Locker		12.9	%		11.2	%
atmos		6.1	%		2.7	%
Asia Pacific		10.6	%		8.9	%
Total Foot Locker, Inc.		(10.0	)%		(9.1	)%

Comparable sales decreased both ~~periods, this reflected a decline~~ in our ~~Athletic Stores segment, partially offset by an increase~~stores and in our ~~Direct-to-Customers segment.~~direct-to-customer channels this quarter due to changing vendor mix, coupled with macroeconomic headwinds, including inflation and lower income tax refunds in the United States. In addition, North America sales were negatively affected by the closure of Eastbay business, which ceased operating in late 2022. Eastbay's sales primarily represent the other category in the above table, and excluding those sales the decline would have been 11.6% on a constant currency basis. Additionally, we are repositioning the Champs Sports banner to serve the active athlete, which is resulting in expected comparable sales declines due to the transition. Within EMEA, sales for the Foot Locker banners increased, led by our operations in Italy, Spain, and France as tourism has increased as compared with last year. Within Asia Pacific, sales for the Foot Locker banner increased across many of the regions that we operate, led by Australia, New Zealand, and South Korea. As previously announced, we are in the process of closing our operations in Hong Kong and Macau and converting our business in Singapore and Malaysia to a licensing arrangement. Our sales from our atmos banner increased by 2.7% on a comparable basis, this banner was affected negatively by the lack of certain key styles from Adidas that were available in the marketplace last year.

~~Gross Margin~~From a product perspective for the combined channels, the sales decline in the quarter was across all categories of footwear, apparel and accessories.

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016
Gross margin rate

31.0
%

33.9
%

31.6
%

34.0
%
Basis point change in the gross margin rate

(290)

(240)

Components of the change-

Decline in the merchandise margin rate

(200)

(140)

Higher occupancy and buyers' compensation expense rate

(90)

(100)

Gross Margin

	Thirteen weeks ended
	April 29,			April 30,
	2023			2022
Gross margin rate		30.0	%		34.0	%
Basis point decrease in the gross margin rate		(400	)
Components of the change:
Merchandise margin rate decline		(250	)
Occupancy and buyers’ compensation expense rate		(150	)

Gross margin is calculated as sales minus cost of sales. Cost of sales includes: the cost of merchandise, freight, distribution costs including related depreciation expense, shipping and handling, occupancy and buyers’ compensation. Occupancy costs include rent (including fixed common area maintenance charges and other fixed non-lease components), real estate taxes, general maintenance, and utilities.

First Quarter 2023 Form 10-Q Page 18

Table of Contents

The gross margin rate decreased ~~by 290 and 240 basis points~~to 30.0% for the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017, respectively.~~

~~The~~April 29, 2023, as compared with the corresponding prior-year period, reflecting a 250-basis point decrease in the merchandise margin rate, and a 150-basis point deleverage in the occupancy and buyers' compensation rate. The decline ~~for both~~in merchandise margin rate reflected higher markdowns versus last year, higher costs of merchandise and increased shrink. The deleverage in the ~~quarter~~occupancy and ~~year-to-date periods~~buyers' compensation rate was primarily ~~reflected a higher markdown rate in both our Athletic Stores and Direct-to-Customers segments as~~related to the Company was more promotional. Additionally, our Direct-to-Customers segment was also somewhat affected by higher shipping and handling expense. The increased promotional activity was necessary to stimulate sales and ensure that inventory levels remained current and in linefixed nature of these costs coupled with the ~~pace of~~decline in sales.

The higher occupancy and buyers’ compensation expense rate for both the quarter and year-to-date periods reflected higher rent-related costs coupled with a decrease in sales. Higher occupancy costs are primarily attributed to several high-profile location leases entered into recently, partially offset by rent reductions in certain other stores.

Selling, General and Administrative Expenses (SG&A)



	Thirteen weeks ended						Thirty-nine weeks ended
	October 28,			October 29,			October 28,			October 29,
	2017			2016			2017			2016
	($ in millions)
													Thirteen weeks ended
													April 29,			April 30,
($ in millions)													2023			2022
SG&A	$	368		$	366		$	1,078		$	1,077		$	431		$	463
$ Change	$	2					$	1		$			$	(32	)
% Change		0.5	%					0.1	%					(6.9	)%
SG&A as a percentage of sales		19.7	%		19.4	%		19.3	%		19.1	%		22.4	%		21.3	%

~~For the thirteen weeks ended October 28, 2017,~~SG&A decreased by $32 million, or $25 million excluding the effect of foreign currency fluctuations, ~~SG&A expense decreased by $4 million~~for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year period. ~~The effect~~As a percentage of ~~foreign currency fluctuations for the thirty-nine weeks ended October 28, 2017 was not significant.~~ ~~Comparing the~~sales, SG&A ~~expense rate with the prior-year periods, the rate~~ increased by ~~30 and 20~~110 basis points for the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017, respectively~~. April 29, 2023, driven primarily by deleverage from the decline in sales, coupled with pressures from inflation and investments in store wages. Partially offsetting these increases was lower incentive compensation due to the Company's underperformance relative to targets and savings from our cost optimization program.

~~The higher SG&A~~Depreciation and Amortization

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Depreciation and amortization	$	51		$	54
$ Change	$	(3	)
% Change		(5.6	)%

Depreciation and amortization expense ~~rate~~decreased by $3 million for ~~both~~ the ~~quarter and year-to-date periods,~~thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year ~~periods, was driven by~~period. Excluding the Athletic Stores segment and was primarily related to higher store-related compensation costs and hurricane-related expenses. Wages were higher primarily due to minimum wage increases, as well as related payroll taxes and benefits. As a percentageeffect of sales, store wages and associated costs increased due to the decline in sales as we were not able to reduce staffing levels commensurate with the rate of decline in sales. In addition, included in SG&A was $7 million of hurricane-related expenses, including lost inventory, damage to fixed assets, and repair and maintenance expenses. These hurricane-related expenses negatively affected the SG&A expense rate for the quarter by 40 basis points. Our Direct-to-Customers segment’s SG&A expense rate declined for both the quarter and year-to-date periods reflecting decreased publicity and incentive compensation expenses. Additionally, corporate expense significantly declined during the third quarter and year-to-date periods reflecting primarily reduced incentive compensation expense.

~~Depreciation and Amortization~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)

Depreciation and amortization

$
44

$
40

$
127

$
118

$ Change

$
4

$
9

% Change

10.0
%

7.6
%

~~Depreciation~~foreign currency fluctuations, depreciation and amortization ~~increased~~decreased by ~~$4 million and $9~~$2 million for the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017, respectively,~~April 29, 2023, primarily related to operating fewer stores and the effect from impairments recorded in the prior year.

Impairment and Other Charges

During the first quarter of 2023, we incurred $19 million of transformation consulting expense, $18 million of impairment charges related to 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 reorganization costs related to the closure of a North American Distribution center and costs associated with the closure of the Sidestep banner and certain Foot Locker Asia stores. In the corresponding prior-year period, we recorded impairment charges of $3 million related to long-lived assets and right-of-use assets as well as accelerated tenancy charges, $2 million of acquisition and integration costs related to WSS and atmos acquisitions, and $1 million of other expenses.

Corporate Expense

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Corporate expense	$	4		$	37
$ Change	$	(33	)

Corporate expense consists of unallocated general and administrative expenses as well as depreciation and amortization related to our corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items.

First Quarter 2023 Form 10-Q Page 19

Table of Contents

Corporate expense decreased by $33 million for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year ~~periods. The~~period. Depreciation and amortization included in corporate expense was $9 million for each of the thirteen weeks ended April 29, 2023 and April 30, 2022. Corporate expense decreased primarily due to an increase in ~~depreciation~~the allocation of corporate expense to the banners in 2023 and ~~amortization reflected~~lower incentive compensation, partially offset by our ongoing ~~capital spending~~ ~~on store projects, enhancing our digital capabilities, and various other technologies and infrastructure.~~investments in information technology.

Operating Results

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Division profit	$	104		$	263
Division profit margin		5.4	%		12.1	%

Division profit margin as a percentage of sales decreased to 5.4% for the thirteen weeks ended April 29, 2023, with both sales channels experiencing declines in sales and gross margin and deleveraging expenses.

Interest Expense, Net



	Thirteen weeks ended				Thirty-nine weeks ended
	October 28,		October 29,		October 28,		October 29,
	2017		2016		2017		2016
	($ in millions)
									Thirteen weeks ended
									April 29,			April 30,
($ in millions)									2023			2022
Interest expense	$	3	$	3	$	9	$	9	$	(5	)	$	(6	)
Interest income		(3)		(2)		(10)		(7)		4			1
Interest (income) / expense, net	$	—	$	1	$	(1)	$	2
Interest (expense) income, net									$	(1	)	$	(5	)

~~Interest income increased by~~We recorded $1 million ~~and $3~~of net interest expense for the thirteen weeks ended April 29, 2023, as compared with net interest expense of $5 million for the ~~thirteen and thirty-nine weeks ended October 28, 2017, respectively, as compared with the~~ corresponding prior-year ~~periods, while interest~~period. Interest expense ~~was unchanged. The~~decreased primarily due to an increase in interest income ~~was due to higher average interest rates~~ earned on our cash ~~investments.~~and cash equivalents related to higher interest rates and income from our cross-currency swap.

Other Income ~~Taxes~~/ (Expense), Net

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Other income / (expense), net	$	(3	)	$	(25	)

This caption includes non-operating items, including changes in fair value of minority investments measured at fair value or using the fair value measurement alternative, changes in the market value of our available-for-sale security, our share of earnings or losses related to our equity method investments, and net benefit / (expense) related to our pension and postretirement programs excluding the service cost component.

The ~~Company recorded~~thirteen weeks ended April 29, 2023 reflected expense of $2 million related to our pension and postretirement programs, and a $1 million loss on our equity method investments. Other income ~~tax provisions of $54 million and $165 million~~/ (expense) for the ~~thirteen and thirty-nine weeks ended October 28, 2017, respectively, which~~corresponding prior-year period primarily represented ~~effective tax rates~~a decrease in the fair value of ~~34.7 percent and 33.2 percent. For the thirteen and thirty-nine weeks ended October 29, 2016, the Company recorded income tax provisions~~our former investment in Retailors, Ltd. resulting in a non-cash loss of ~~$70 million and $248 million, which represented effective tax rates of 30.9 percent and 34.4 percent, respectively.~~$25 million.

First Quarter 2023 Form 10-Q Page 20

Table of Contents

~~The Company’s~~Income Taxes

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Provision for income taxes	$	21		$	58
Effective tax rate		36.3	%		30.3	%

Our current year interim provision for income taxes iswas measured using an estimated annual effective tax rate, which represented a blend of federal, state, and foreign taxes and included the effect of certain nondeductible items as well as changes in our mix of domestic and foreign earnings or losses, adjusted for discrete items that ~~occur~~occurred within the periods presented. ~~The Company~~

We regularly ~~assesses~~assess the adequacy of ~~its~~our provisions for income tax contingencies in accordance with ~~the~~ applicable authoritative guidance on accounting for income taxes. As a result, ~~the Company~~we may adjust the reserves for unrecognized tax benefits considering new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation. ~~The changes in the tax reserves were not significant for any of the periods presented.~~

~~For~~During the thirteen weeks ended October 28, 2017, the Company recorded excess tax benefits of $2 million from stock-based compensation reflecting the change required by ASC 718 as well as a tax benefit of $5 million related to a staff reduction and reorganization charge of $13 million. Additionally, for the thirty-nine weeks ended October 28, 2017, the CompanyApril 29, 2023, we recorded a ~~pension-related litigation charge~~$4 million reserve release from a statute of ~~$50 million with a related tax benefit of $20 million. The litigation charge~~limitations expiration on our foreign income taxes. Excluding this item, and ~~the reorganization costs reduced the overall effective rate because they reduced the proportion of the Company’s worldwide income taxed in jurisdictions where the tax rates are higher.~~

~~For the thirteen and thirty-nine weeks ended October 29, 2016,~~other insignificant reserve releases due to ~~a scheduled reassessment the Company increased the value~~settlements of ~~the intellectual property provided to its European business by Foot Locker in the U.S. The higher valuation resulted in catch-up deductions that reduced 2016’s~~international tax ~~expense by $10 million.~~

~~Excluding the effects of the excess tax benefits, the litigation charge, the reorganization costs, and the change in the value of the intellectual property, there was no significant change in~~examinations, the effective tax rate for the ~~thirteen and thirty-nine weeks ended October 28, 2017~~current year period increased, as compared with the corresponding prior-year ~~periods.~~

The Company currently expects its full-year tax rate to approximate 34 percent excluding the effect of any nonrecurring items that may occur and the effects of potential tax reform. The actual tax rate will vary depending on the level of stock option exercise activity and the stock price at exercise. Additionally, the actual tax rate will also vary depending on the level and mix of income earned in the United States, as compared with our international operations.

~~Net Income~~

~~For the thirteen weeks ended October 28, 2017, net income decreased by $55 million, or 35 percent, and~~ ~~diluted earnings per share decreased by 31 percent to $0.81 per share,~~ ~~as compared with the corresponding prior-year period~~. For the thirty-nine weeks ended October 28, 2017, net income decreased by $142 million, or 30 percent, and diluted earnings per share decreased by 27 percent to $2.55 per share, as compared with the corresponding prior-year period.

~~Segment Information~~

We have two reportable segments, Athletic Stores and Direct-to-Customers, which are based on our method of internal reporting. We evaluate performance based on several factors, the primary financial measure of which is division results. Division profit reflects income before income taxes, pension litigation charge, reorganization charge, corporate expense, non-operating income, and net interest (income) / expense. The following table summarizes results by segment:

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016
Operating Results

($ in millions)
Athletic Stores (1)

$
154

$
213

$
504

$
683
Direct-to-Customers

26

32

88

92
Division profit

180

245

592

775
Less: Pension litigation and reorganization charges (2) (3)

13

—

63

—
Less: Corporate expense

12

17

34

53
Operating profit

155

228

495

722
Other income (4)

1

—

2

3
Earnings before interest expense and income taxes

156

228

497

725
Interest (income) / expense, net

—

1

(1)

2
Income before income taxes

$
156

$
227

$
498

$
723


~~(1)~~	~~Included in the thirteen and thirty-nine weeks ended October 29, 2016 is a $6 million pre-tax non-cash impairment charge to write-down long-lived store assets of Runners Point and Sidestep.~~
~~(2)~~	~~Included in the thirteen and thirty-nine weeks ended October 28, 2017 is a charge of $50 million relating to a pension litigation matter described further in Note 14,~~ ~~Legal Proceedings~~.
~~(3)~~	Included in the thirteen and thirty-nine weeks ended October 28, 2017 is a $13 million pre-tax charge related to the reduction and reorganization of division and corporate staff that occurred in the third quarter of 2017. The substantial majority of the charge is for severance and related costs.
~~(4)~~	Other income includes non-operating items, such as lease termination gains, royalty income, insurance recoveries and the changes in fair value, premiums paid, and realized gains and losses associated with foreign currency option contracts.

~~Athletic Stores~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)

Sales

$
1,612

$
1,644

$
4,819

$
4,955

$ Change

$
(32)

$
(136)

$

% Change

(1.9)
%

(2.7)
%

Division profit

$
154

$
213

$
504

$
683

Division profit margin

9.6
%

13.0
%

10.5
%

13.8
%

Excluding the effect of foreign currency fluctuations, Athletic Stores segment sales decreased by 3.6 percent and 2.8 percent for the thirteen and thirty-nine weeks ended October 28, 2017, respectively, as compared with the corresponding prior-year periods. The sales decline for the current quarter and year-to-date periods, excluding the effect of foreign currency fluctuations, was across almost all store banners, with the exception of Footaction and Foot Locker Canada, which increased sales.

Comparable-store sales decreased by 5.1 percent and 4.5 percent for the thirteen and thirty-nine weeks ended October 28, 2017, respectively. Foot Locker Canada generated positive comparable-store sales for the quarter and year-to-date periods, while Footaction was positive for the third quarter but not the year-to-date period. All other store banners generated negative comparable-store sales for both periods. The overall decline in comparable-store sales was due to a decrease in footwear sales for both the quarter and year-to-date periods. The footwear sales decline in the quarter was across men’s, women’s, and children’s, whereas the year-to-date decline was related primarily to declines in children’ and men’s footwear. A comparable-sales increase in men’s lifestyle running footwear for both the quarter and year-to-date periods for the majority of our store banners was not enough to compensate for the comparable-store declines in basketball and court lifestyle footwear. The decline in most other footwear categories for both the quarter and year-to-date periods was the result of insufficient product availability of certain styles and the lack of product innovation in select categories to suit our customers’ quickly-changing style preferences. Women’s court styles mainly contributed to the comparable-store sales decline in women’s footwear both domestically and internationally for the quarter. The decline in women’s footwear was most significant in Foot Locker, Lady Foot Locker, and Foot Locker Europe. Sales of children’s footwear declined for the year-to-date period, ~~due~~ primarily ~~by declines in the basketball category.~~

The decline in footwear sales was partially offset by gains in apparel sales, as the majority of our store banners experienced apparel sales gains for both the thirteen and thirty-nine weeks ended October 28, 2017. Most of our banners benefited from gains in men’s branded apparel and outerwear, which was partially offset by declines in private label and licensed apparel for both the quarter and year-to-date periods. Additionally, women’s apparel performed well for our SIX:02 banner for both the quarter and year-to-date periods, although this was largely driven by increased markdowns. For the quarter and year-to-date periods, children’s apparel experienced both total and comparable-store sales increases as compared to the corresponding prior-year periods.

Athletic Stores division profit decreased by 27.7 percent and 26.2 percent for the thirteen and thirty-nine weeks ended October 28, 2017, respectively, as compared with the corresponding prior-year periods. The decline in division profit margin for both the quarter and year-to-date periods was attributable primarily to a lower gross margin rate, coupled with a higher SG&A expense rate.

~~Direct-to-Customers~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)

Sales

$
258

$
242

$
753

$
698

$ Change

$
16

$
55

% Change

6.6
%

7.9
%

Division profit

$
26

$
32

$
88

$
92

Division profit margin

10.1
%

13.2
%

11.7
%

13.2
%

Comparable-sales for the Direct-to-Customers segment increased by 6.1 percent and 8.1 percent for the thirteen and thirty-nine weeks ended October 28, 2017, respectively, as compared with the corresponding prior-year periods. The increase in the quarter was driven primarily by Eastbay and the continued growth of ecommerce sales associated with our store-banner websites, both domestically and internationally. The increase for the year-to-date period was primarily related to the growth of our store-banner websites.

The footwear category continued to deliver the strongest gains during the current quarter and year-to-date periods. The footwear gains related to our domestic store-banner websites and Eastbay for both the quarter and year-to-date periods were driven by strong results in the children’s and men’s footwear categories. For the quarter, the women’s business softened primarily in the running category. Our international store-banner websites for both the quarter and year-to-date periods were primarily driven by sales from men’s and women’s lifestyle running styles.

Direct-to-Customers division profit for the thirteen and thirty-nine weeks ended October 28, 2017 decreased by $6 million and $4 million, respectively, as compared with the corresponding prior-year periods. Division profit, as a percentage of sales, declined by 310 basis points and 150 basis points for the thirteen and thirty-nine weeks ended October 28, 2017, respectively, as compared with the corresponding prior-year periods. While sales increased, the gross margin rate declined due to increased markdowns in response to promotional activity in the market and, to a lesser degree, higher shipping and handling expense. Partially offsetting the gross margin decline was an expense rate improvement primarily related to lower publicity costs and incentive compensation expense in light of current performance as compared with our plan.

~~Corporate Expense~~

Thirteen weeks ended

Thirty-nine weeks ended

October 28,

October 29,

October 28,

October 29,

2017

2016

2017

2016

($ in millions)

Corporate expense

$
12

$
17

$
34

$
53

$ Change

$
(5)

$
(19)

Corporate expense consists of unallocated SG&A, as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items. Depreciation and amortization included in corporate expense was $4 million and $11 million for both the thirteen and thirty-nine weeks ended ~~October 28, 2017 and October 29, 2016, respectively~~.

The allocation of corporate expense to the operating divisions is adjusted annually based upon an internal study; accordingly, the allocation increased by $1 million and $4 million for the thirteen and thirty-nine weeks ended ~~October 28, 2017,~~ thus reducing corporate expense. Excluding the corporate allocation change, corporate expense decreased by $4 million and $15 million for the thirteen and thirty-nine weeks ended October 28, 2017, respectively.

Incentive compensation declined by $4 million and $11 million for the thirteen weeks and thirty-nine weeks ended October 28, 2017, respectively, reflecting the Company’s underperformance compared to its plan. Share-based compensation declined by $3 million and $6 million for the thirteen weeks and thirty-nine weeks ended October 28, 2017, respectively, which primarily represented the portion of share-based compensation that is tied to Company performance. Additionally, the decline for the thirty-nine weeks ended October 28, 2017 was due to the ~~prior-year corporate headquarters relocation costs~~decline in income before tax and a change in geographic mix of $4 million. These decreases were partially offset by a $2 million litigation settlement charge recorded during the third quarter of 2017 and increased corporate support costs such as information technology and real estate management.earnings.

Liquidity and Capital Resources

Liquidity

Our primary source of liquidity has been cash flow from ~~earnings,~~operations, while the principal uses of cash have ~~been:~~been to fund inventory and other working capital requirements; to finance capital expenditures related to store openings, store remodelings, ~~Internet~~internet and mobile sites, information systems, and other support facilities; to make retirement plan contributions, quarterly dividend payments, and interest payments; and to fund other cash requirements to support the development of our short-term and long-term operating ~~strategies.~~ strategies, including strategic investments.

We generally finance real estate with operating leases. We believe our cash, cash equivalents, ~~and~~ future cash flow from operations, and amounts available under our credit agreement will be adequate to fund these requirements.

The Company may also ~~from time to time~~ repurchase its common stock or seek to retire or purchase outstanding debt through open market purchases, privately negotiated transactions, or otherwise. Share repurchases and retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions, strategic considerations, and other factors. The amounts involved may be material. As of ~~October 28, 2017,~~April 29, 2023, approximately ~~$863~~$1,103 million remained available under ~~the Company’s~~our current $1.2 billion share repurchase program.

~~As discussed further in~~Our full-year capital spending is expected to be $275 million. The forecast includes $210 million related to the ~~Legal Proceedings~~ ~~note under “Item 1. Financial Statements,” during~~remodeling or relocation of approximately 170 existing stores and the ~~second quarter~~opening of ~~2017, in connection with our pension litigation,~~approximately 90 new stores, including 25 WSS stores. Additionally, we ~~recorded a pre-tax charge of $50~~expect to spend $65 million($30 million after-tax or $0.23 per diluted share). The Company previously recorded a pre-tax charge of $100 million during 2015. The second quarter 2017 charge reflects the Company’s revised estimate of its exposure for the ~~matter, bringing the total pre-tax amount accrued~~development of information systems, websites, and infrastructure, including supply chain initiatives. We also expect to ~~$150 million.~~ ~~In light of the uncertainties involved~~spend an additional $30 million in this matter, there is no assurance that the ultimate resolution will not differ from the amount currently accrued by us. The total accrual of $150 million has been classified as a long-term liability duesoftware-as-a-service contracts related to the uncertainty involved with the resolution of this litigation, as the appeal process may be lengthy. The pension plan is currently sufficiently funded to initially absorb a $150 million liability and, accordingly, we currently do not anticipate the need to make any pension contributions in the near term in connection with this matter. The timing and the amount of contributions to the pension plan are dependent on the funded status of the plan and various other factors, such as interest rates and the performance of the plan’s assets.our technology initiatives.

Any material adverse change in customer demand, fashion trends, competitive market forces, or customer acceptance of our merchandise mix, ~~and~~ retail locations and websites, uncertainties related to the effect of competitive products and pricing, our reliance on a few key ~~vendors~~suppliers for a significant portion of our merchandise purchases and risks associated with global product sourcing, economic conditions worldwide, the effects of currency fluctuations, as well as other factors listed under the ~~heading~~headings “Disclosure Regarding Forward-Looking Statements,” and “Risk Factors” could affect our ability to continue to fund our needs from business operations.

First Quarter 2023 Form 10-Q Page 21

Table of Contents

~~Operating Activities~~

Thirty-nine weeks ended

October 28,

October 29,

2017

2016

($ in millions)
Net cash provided by operating activities
$
496

$
477
$ Change
$
19

~~The amount provided by operating~~Operating Activities

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Net cash used in operating activities	$	(118	)	$	(21	)
$ Change	$	(97	)

Operating activities reflects net income adjusted for non-cash items and working capital changes. Adjustments to net income for non-cash items include impairment charges, other charges, fair value adjustments to minority investments, depreciation and amortization, deferred income taxes, and share-based compensation expense.

The ~~increase~~decrease in cash from ~~the prior year primarily reflects working capital changes,~~operating activities reflected lower net income, partially offset by ~~the decline in net income~~timing of merchandise purchases and payments of accounts payable and accrued and other liabilities, as compared with the ~~prior~~same period last year. The prior-year merchandise purchases were affected by the supply chain disruptions that occurred in the preceding year.

Investing Activities

Thirty-nine weeks ended

October 28,

October 29,

2017

2016

($ in millions)
Net cash used in investing activities
$
204

$
193
$ Change
$
11

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Net cash used in investing activities	$	(59	)	$	(105	)
$ Change	$	46

~~Capital~~The change in investing activities primarily reflected lower capital expenditures ~~were $11 million higher than~~in the ~~prior year. The increase was due to increased spending on technology~~current year, as compared with the prior-year period, as several large projects ~~and cash payments~~ related to 2021 were paid in the ~~2016 capital program. The Company’s full-year capital spending is expected to be approximately $269 million, which includes $198 million related to the remodeling or relocation~~first quarter of approximately 180 existing stores and the opening of approximately 90 new stores, as well as $71 million for the development of information systems, websites, and infrastructure, including supply chain initiatives. 2022.

For the thirteen weeks ended April 29, 2023, capital expenditures decreased by $36 million to $59 million, as compared with the corresponding prior-year period.

Financing Activities

Thirty-nine weeks ended

October 28,

October 29,

2017

2016

($ in millions)
Net cash used in financing activities
$
475

$
443
$ Change
$
32

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Net cash used in financing activities	$	(46	)	$	(128	)
$ Change	$	82

Cash used in financing activities was primarily related to our return to shareholders initiatives as follows:

	Thirteen weeks ended
	April 29,			April 30,
($ in millions)	2023			2022
Share repurchases	$	—		$	(89	)
Dividends paid on common stock		(38	)		(38	)
Total returned to shareholders	$	(38	)	$	(127	)

During the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017,~~April 29, 2023, we ~~repurchased 9,589,660~~did not repurchase any shares ofunder our ~~common stock for $362 million, as compared with 5,874,643 shares repurchased for $352 million~~share repurchase program, whereas in the ~~corresponding prior-year period.~~

~~The Company also~~prior year we spent $89 million to repurchase shares. We declared and paid $38 million in dividends ~~during the first three quarters~~representing a quarterly rate of ~~2017 and 2016 of $120 million and $111 million, respectively. This represented quarterly rates of $0.31 and $0.275~~$0.40 per share ~~for 2017~~in both 2023 and ~~2016, respectively~~.

~~Additionally, we received proceeds from the issuance of common stock in connection with employee stock programs of $17 million and $28 million for the thirty-nine weeks ended October 28, 2017~~ ~~and October29,2016, respectively. Also, during the thirty-nine weeks ended October 28, 2017 and October29,2016, the Company~~2022. We paid $10 million and $6$1 million during the first quarters of 2023 and 2022, respectively, to satisfy tax withholding obligations ~~relating~~related to ~~the~~ vesting of share-based equity awards.

~~Included in the prior year’s financing activities were fees of $2 million paid in connection with the 2016 Credit Agreement.~~

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” ~~included in~~within the ~~Annual Report on~~2022 Form ~~10-K for the fiscal year ended January 28, 2017.~~10‑K.

First Quarter 2023 Form 10-Q Page 22

Table of Contents

Recent Accounting Pronouncements

Descriptions of the recently issued and adopted accounting principles are included in Item 1. “Financial Statements” in Note 1, Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our primary risk exposures or management of market risks from the information provided in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk within the 2022 Form 10-K.

Item4. Co~~ntrols~~Controls and Procedures

Evaluation of Disclosure Controls and Procedures

During the quarter, the Company’s management performed an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Interim Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). ~~Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure~~The term "disclosure controls and procedures" means controls and other procedures ~~were effective~~of a company that are designed to ensure that information ~~relating to the Company that is~~ required to be disclosed by a company in the reports that ~~we file~~it files or ~~submit~~submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~SEC~~SEC’s rules and ~~forms,~~forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including ~~the CEO~~its principal executive and ~~CFO,~~principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

~~During~~Based on that evaluation, our CEO and CFO concluded that as of April 29, 2023, our disclosure controls and procedures were not effective due to the un-remediated material weaknesses in internal control over financial reporting related to certain ineffective general information technology controls over logical access and change management at our WSS business, which was previously disclosed in the Company's Annual Report on Form 10-K for the year ended January 28, 2023. For additional information, please refer to Part II - Item 9A. of the Company's Annual Report on Form 10-K for the year ended January 28, 2023.

Remediation

Management is in the process of implementing measures designed to ensure that the control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include: (i) designing and implementing controls related to deprovisioning, privileged access, and user access reviews, (ii) developing an enhanced risk assessment process to evaluate logical access, and (iii) improving the existing training program associated with control design and implementation. We believe that these actions will remediate the material weaknesses. Management began to implement certain of these remedial steps during the first quarter ~~ended October 28, 2017,~~of 2023. The material weaknesses will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of these material weaknesses will be completed prior to the end of 2023.

Changes in Internal Control Over Financial Reporting

Other than the ongoing remediation efforts described above, there were no changes in ~~the Company’s~~our internal control over financial reporting (as defined in Rules 13a-15(f) ofand 15d-15(f) under the Exchange Act), during the quarter ended April 29, 2023, that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

First Quarter 2023 Form 10-Q Page 23

Table of Contents

Limitations on Effectiveness of Controls and Procedures

Because of its inherent limitations, management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

PARTII- OTHER INFORMATION

Item1. Le~~gal~~Legal Proceedings

Information regarding the Company’s legal proceedings is contained in the Legal Proceedings note under Item 1. “Financial ~~Statements.”~~Statements” in Part I.

Item1A. Risk Factors

~~There were no material changes~~In addition to the ~~risk~~other information discussed in this report, the factors ~~disclosed~~described in ~~the 2016~~Part I, Item 1A. “Risk Factors” in our 2022 Annual Report on Form 10-K filed with the SEC on March 27, 2023 should be considered as they could materially affect our business, financial condition, or future results.

There have not been any significant changes with respect to the risks described in our 2022 Form 10-K.

Item2. Unregistered Sales of Equity Securities and Use of Proceeds

The ~~following~~ table below provides information with respect to shares of the Company’s common stock ~~that the Company repurchased during~~for the thirteen weeks ended ~~October 28, 2017:~~ April 29, 2023.

Approximate

Total Number of

Dollar Value of

Total

Average

Shares Purchased as

Shares that may

Number

Price

Part of Publicly

yet be Purchased

of Shares

Paid Per

Announced

Under the
Date Purchased

Purchased (1)

Share (1)

Program (2)

Program (2)
July 30 - Aug. 26, 2017

3,002,574

$
35.17

3,000,000

$
1,061,038,524
Aug. 27 - Sept. 30, 2017

4,788,800

35.34

4,788,760

891,816,280
Oct. 1 - Oct. 28, 2017

904,800

31.85

904,800

862,996,130

8,696,174

$
34.92

8,693,560

					Total Number of		Dollar Value of
	Total		Average		Shares Purchased as		Shares that may
	Number		Price		Part of Publicly		yet be Purchased
	of Shares		Paid Per		Announced		Under the
Date Purchased	Purchased ⁽¹⁾		Share ⁽¹⁾		Program		Program
January 29 to February 25, 2023		—	$	—		—	$	1,103,814,042
February 26 to April 1, 2023		239,806		37.99		—		1,103,814,042
April 2 to April 29, 2023		19,575		39.85		—		1,103,814,042
		259,381	$	38.13		—


⁽¹⁾	These columns ~~also reflect~~include shares acquired in satisfaction of the tax withholding obligations of holders of restricted stock ~~units~~unit and ~~restricted stock~~performance-based awards, which vested during the quarter, and shares repurchased pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934. The calculation of the average price paid per share includes all fees, commissions, and other costs associated with the repurchase of such shares. quarter.
~~(2)~~

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

~~On February 14, 2017, the Board of Directors approved a 3-year, $1.2 billion share repurchase program extending through January 2020.~~

First Quarter 2023 Form 10-Q Page 24

Table of Contents

Item6. Exhibits

ExhibitNo.		Description
10.1 †		Amendment No. 3 to Credit Agreement, dated as of April 21, 2023, among Foot Locker, Inc., a New York corporation, the guarantors party thereto, the lenders party thereto, and Wells Fargo, National Association, as administrative and collateral agent, letter of credit issuer, and swing line lender (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K dated April 25, 2023 filed on April 25, 2023).
10.2 †		Foot Locker 2007 Stock Incentive Plan (Amended and Restated as of March 22, 2023) (incorporated herein by reference to Exhibit 10.1 on Form S-8 (Registration No. 333-272007), filed on May 17, 2023 (the "2023 Form S-8")).
10.3 †		2023 Foot Locker Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.2 on the 2023 Form S-8).
31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
~~Item 6.~~ 31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~Exhibits~~
32**		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~(a)~~ 101.INS*	~~Exhibits~~	Inline XBRL Instance Document.
101.SCH*	~~The exhibits that are in this report immediately follow~~	Inline XBRL Taxonomy Extension Schema.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase.
104*		Cover Page Interactive Data File (embedded within the ~~index.~~Inline XBRL datafile).

† Management contract or compensatory plan or arrangement

* Filed herewith

** Furnished herewith

First Quarter 2023 Form 10-Q Page 25

Table of Contents

~~SIGN~~~~ATURE~~SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: ~~December 6, 2017~~June 7, 2023	FOOT LOCKER, INC.


	/s/ ~~Lauren B. Peters~~ Robert Higginbotham
	~~LAUREN B. PETERS~~ROBERT HIGGINBOTHAM
	~~Executive~~Senior Vice President and Interim Chief Financial Officer

~~FOOT LOCKER, INC.~~

~~INDEX OF EXHIBITS~~


~~Exhibit No.~~		~~Description~~
12*		~~Computation of Ratio of Earnings to Fixed Charges.~~
15*		~~Accountants’ Acknowledgement.~~
31.1*		~~Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
31.2*		~~Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
32**		~~Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
99*		~~Report of Independent Registered Public Accounting Firm.~~
101.INS*		~~XBRL Instance Document.~~
101.SCH*		~~XBRL Taxonomy Extension Schema.~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase.~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase.~~
101.LAB*		~~XBRL Taxonomy Extension Label Linkbase.~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase.~~

*		~~Filed herewith.~~
**		~~Furnished herewith.~~

First Quarter 2023 Form 10-Q Page 26

New York	13-3513936
~~New York~~(State or other jurisdiction of incorporation or organization)	~~13-3513936~~(I.R.S. Employer Identification No.)
~~(State or other jurisdiction of incorporation or organization)~~	~~(I.R.S. Employer Identification No.)~~

Title of each class	Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.01	FL	New York Stock Exchange

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☑No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~☑	~~Accelerated filer~~ ☐	~~Non-accelerated filer~~ ☐	~~Smaller reporting company~~ ☐
Emerging growth company ☐


☑	QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934


					Page
PART I	FINANCIAL INFORMATION		~~FINANCIAL INFORMATION~~ 1
		Item 1.	Financial Statements (Unaudited)	~~Financial Statements~~1
				Condensed Consolidated Balance Sheets (Unaudited)	1
				Condensed Consolidated Statements of Operations (Unaudited)	2
				Condensed Consolidated Statements of Comprehensive Income (Unaudited)	3
		Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)	4
		Condensed Consolidated Statements of Cash Flows (Unaudited)	4 5
				Notes to the Unaudited Condensed Consolidated Financial Statements (Unaudited)	5 6
		Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	17 15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
		Item 4.		Controls and Procedures	26
					23

PART II	OTHER INFORMATION		~~OTHER INFORMATION~~ 24
		Item 1.		Legal Proceedings	26 24
		Item 1A.	Risk Factors	~~Risk Factors~~ 24	26
		Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	26 24
	Item 3.	Defaults Upon Senior Securities	24
	Item 4.	Mine Safety Disclosures	24
	Item 5.	Other Information	24
		Item 6.		Exhibits	26
					25

SIGNATURE				27
					26
~~INDEX OF EXHIBITS~~					28



		Severance and		Other Related
		Benefit Costs		Charges		Total
	($ in millions)
Balance at January 28, 2017	$	—	$	—	$	—
Amounts charged to expense		11		2		13
Cash payments		(2)		—		(2)
Balance at October 28, 2017	$	9	$	2	$	11



		October 28, 2017						October 29, 2016						January 28, 2017
		Gross		Accum.		Net		Gross		Accum.		Net		Gross		Accum.		Net
($ in millions)		value		amort.		value		value		amort.		value		value		amort.		value
Amortized intangible assets: (1)
	Lease acquisition costs	$	129	$	(117)	$	12	$	118	$	(107)	$	11	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		20		(13)		7		20		(13)		7
	Favorable leases		7		(6)		1		7		(5)		2		7		(5)		2
		$	156	$	(136)	$	20	$	145	$	(125)	$	20	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	25					$	23					$	22
Other intangible assets, net						$	45					$	43					$	42



					Items Related
	Foreign Currency				to Pension and		Unrealized Loss on
	Translation		Cash Flow		Postretirement		Available-For-
($ in millions)	Adjustments		Hedges		Benefits		Sale Security		Total
Balance as of January 28, 2017	$	(127)	$	1	$	(236)	$	(1)	$	(363)
OCI before reclassification		70		1		(1)		1		71
Reclassified from AOCL		—		—		6		—		6
Other comprehensive income		70		1		5		1		77
Balance as of October 28, 2017	$	(57)	$	2	$	(231)	$	—	$	(286)



	Balance Sheet	October 28,		October 29,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	2	$	7	$	3
Foreign exchange forward contracts	Current liabilities	$	1	$	—	$	3
Non-hedging Instruments:
Foreign exchange forward contracts	Current assets	$	—	$	1	$	—



	As of October 28, 2017						As of October 29, 2016						As of January 28, 2017
	($ in millions)
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Available-for-sale securities	$	—	$	7	$	—	$	—	$	7	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		2		—		—		8		—		—		3		—
Total Assets	$	—	$	9	$	—	$	—	$	15	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		1		—		—		—		—		—		3		—
Total Liabilities	$	—	$	1	$	—	$	—	$	—	$	—	$	—	$	3	$	—



	Pension Benefits								Postretirement Benefits
	Thirteen weeks ended				Thirty-nine weeks ended				Thirteen weeks ended				Thirty-nine weeks ended
	Oct. 28,		Oct. 29,		Oct. 28,		Oct. 29,		Oct. 28,		Oct. 29,		Oct. 28,		Oct. 29,
($ in millions)	2017		2016		2017		2016		2017		2016		2017		2016
Service cost	$	4	$	4	$	12	$	12	$	—	$	—	$	—	$	—
Interest cost		6		6		19		19		—		1		—		1
Expected return on plan assets		(9)		(9)		(28)		(27)		—		—		—		—
Amortization of net loss (gain)		3		4		10		11		—		(1)		(1)		(2)
Net benefit expense (income)	$	4	$	5	$	13	$	15	$	—	$	—	$	(1)	$	(1)



		Stock Option Plans						Stock Purchase Plan
		October 28,			October 29,			October 28,			October 29,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.9	%		0.4	%
Expected volatility		25	%		30	%		29	%		27	%
Weighted-average expected award life (in years)		5.4			5.7			1.0			1.0
Dividend yield		1.9	%		1.7	%		2.0	%		1.7	%
Weighted-average fair value	$	14.74		$	15.71		$	10.84		$	14.04

	☒
~~(Mark One)~~



					Approximate
				Total Number of	Dollar Value of
	Total	Average		Shares Purchased as	Shares that may
	Number	Price		Part of Publicly	yet be Purchased
	of Shares	Paid Per		Announced	Under the
Date Purchased	Purchased (1)	Share (1)		Program (2)	Program (2)
July 30 - Aug. 26, 2017	3,002,574	$	35.17	3,000,000	$	1,061,038,524
Aug. 27 - Sept. 30, 2017	4,788,800		35.34	4,788,760		891,816,280
Oct. 1 - Oct. 28, 2017	904,800		31.85	904,800		862,996,130
	8,696,174	$	34.92	8,693,560