Thanks Lauren and good morning everyone. About a year ago, at our Investor Day, we outlined our new strategic plan to differentiate our business and become a truly agile organization that can adapt quickly to satisfy our customers in this evolving marketplace.
Overall, 2019 was a solid year that demonstrates early, but meaningful progress across many aspects of our business, including investments in exciting new stores that connect with local communities, capabilities across our digital ecosystem, which enable us to build even deeper connections with our customers, and our supply chain and logistics systems.
We also strengthened our relationships with our strategic vendor partners and together delivered new unique concepts and the most sought-after styles across all of our geographies.
Now, turning to the fourth quarter, our performance was certainly more challenging than we expected on the Q3 call. Despite having leading positions in key on trend styles, our results were pressured during what was a compressed holiday shopping season with softer demand for seasonal categories and a very promotional apparel marketplace.
We were also up against tough launch comparisons relative to the fourth quarter of last year. With that said, there were a number of bright spots and we are encouraged that we finished the year on a promising position with comp sales in January, up double digits. Starting with footwear the momentum in our basketball business continued to build across all of our geographies divisions, and across men's and women's and kids.
Classic basketball styles from Nike and Jordan again led the way with strong sales of the Air Force 1s and AJ1s. Also fuelling the category were a number of highly sought after Jordan retro launches and lifestyle models, strong interest from the Giannis Zoom Freak and the Hardcourt from Adidas.
We also drove strong performance in women's footwear, and top of last year's high single-digit comp gain. This year's result was led by classic basketball styles from Nike and Jordan.
We also had success in Converse and Puma. Notably, Q4 was the fifth consecutive quarter with positive comp sales for both our women's and kids footwear businesses, and being up against the double-digit comp in Q4 2018, our footwear business was essentially flat for the quarter. Apparel was more challenging as it had been in the past two quarters.
Our U.S. banners faced significant challenges driven by the declines in assortments from our secondary brands, software demand for licensed and performance apparel, as well as a planned decline in private label, and the highly promotional marketplace.
On the flip side, we did see some bright spots in apparel as well. Nike Tech and Club Fleece performed very well. We saw [green shoots] with some up and coming brands connected to the youth culture.
Additionally, we have positive results in several international banners.
So, while the margins in apparel were trenched in Q4, we see an opportunity to remix our assortments to drive top and bottom line improvement. This includes opportunities to dimensionalize our branded assortments, along with new offerings that connect with youth culture.
Our Foot Locker, Pacific division turned in another exceptional performance with strong results in footwear, including double-digit gains across men's, women's, and kids, as well as a high-single-digit increase in apparel.
The team did a great job this year posting the divisions fifth consecutive quarter with double digit comp gains. Foot Locker, Canada posted another solid performance this quarter and finished the year up high single digits. At Champ Sports, footwear close to the mid-single-digit comp gain in the quarter led by kids and women's footwear and Champs finished out the year up mid single digits.
Next, I will provide you with the progress report on our strategic initiatives beginning with our efforts to elevate the customer experience. I’m happy to report that our new membership program, FLX is now live across all of our U.S. banners. This means that our customers in the U.S. can now be rewarded for engaging and shopping across our entire family of brands.
Through the program centralized redemption centre, our members have access to exclusive experiences and offerings that reflect our customer’s multi-faceted interests, inclusive of music, sports, art, design, and more. It will also be rewarded with a head start, just for becoming members, which helps their chances of securing highly sought-after leases.
Looking forward, FLX, which is launched across the Netherlands, France, and the UK will continue to expand to additional countries over the course of 2020. In Europe, we are making important strides in our digital and mobile platforms.
During the quarter, we completed the upgrade of our Foot Locker website in the first of 17 countries. This new platform, which has been a success for our North American digital channels will be the foundation from improved consumer experience with better storytelling, greater functionality, and improved bandwidth for those key high volume moments.
While we started out with a smaller market in Norway, we expect to continue the rollout to additional markets this year.
Turning to our store fleet, we intend to invest for long-term growth through our global footprint.
First, we continue to refine our Power Store offense.
Our community based Power Stores, which feature hyper local assortments and activations have been well received and we intend to build on that strength over the next several years.
After opening six Power Stores in the 2019, we plan to open approximately 20 more in 2020 with new locations in the U.S. and across our international markets.
We also intend to allocate capital to our core stores around the world.
We have an opportunity to evolve our fleet, layering the best elements of our Power Store offense, improve the productivity of our existing square footage, and drive faster growth through these investments. This includes a test of an exciting new core store format in the U.S.
While together, we plan to model or relocate a 125 stores with a 110 of these focused on our core stores.
Additionally, we continue to invest in new dedicated spaces for our female customers, where we can inspire her with curated assortments and unique experiences. We ended 2019 with 17 elevated women spaces across Europe, 34 in the U.S. as Foot Locker Champs Sports, and Foot Action, and we plan to scale the build-out in 2020 with 40 to 50 additional news pieces globally.
Our plan also includes further expansion in Asia. We opened two stores in the fourth quarter and now have 14 stores in the region.
For 2020, we expect to open an additional 12 stores, including both core and power store locations in new and existing markets.
We also remain laser focused on our third strategic priority to drive productivity.
We believe our investments in supply chain and logistics will be key to achieving further gains in this area. 2019 we completed the retrofit of our Junction City, Kansas facility enabling us to supply our stores and efficiently process orders for digital channels. In fiscal 2020, we have allocated capital for the upgrade of our Camp Hill, Pennsylvania facility, which will transform it to a full-service distribution centre, serving the eastern part of the U.S.
The upgraded facility will enable us to fulfill customer orders more rapidly, replenish stores more often, improve the overall customer experience yielding freight and labor savings from an optimized shipping network, all while lowering our greenhouse gas emissions and our carbon footprint.
Leveraging the power of our people, in 2019, we took advantage of our improved systems and training to ensure we have the right associates on the sales floor with access to the right product, at the right place, at the right time. We were pleased to see this translate into gains in conversion, sales per payroll hour, and sales per gross square foot, while delivering a consistent high level of service.
Importantly, this all lead to meaningful improvement in our key customer metrics, including overall customer satisfaction and net promoter score, but we believe these are still early days and there are numerous opportunities to drive even further gains.
Of course, none of this would be possible without the efforts of our team.
Last quarter, I introduced you to Lace Up, our new interactive communications and learning platform. The response from our associates to this new system has been tremendous. They are engaging, learning, having fun, and driving productivity. Building stronger connections with the communities where we live and work offers additional paths to fostering local long-lasting relationships with our customers.
I’m proud of the efforts across our organization.
For example, partnering for the 31st year in a row with the Fred Jordan Missions in LA to help 3,000 underprivileged children with back-to-school supplies.
Joining forces with the Daily Bread Food Bank in Toronto to give back to the community, where as our team in Europe did this year working collectively to donate books, toys, games, and food to charities that support underprivileged kids.
As we look to fiscal 2020, we have a number of opportunities ahead of us with great product, exciting events, and the expansion of our power stores to new communities. The excitement began in Chicago with our takeover of the city for the NBA's All-Star weekend.
In addition to exclusive footwear launches and customization workshops, this year we had appearances with NBA players such as Giannis, Damian Lillard, and Ben Simmons. Panel discussions and challenges [with tastemakers], musicians, and influencers and more. It was a great way to get the year started, but we have a lot more to come.
For example, in the first quarter, we will have more energy around basketball, both classic and signature styles from Nike and Jordan, in the Nike pre-game, a House of Hoops exclusive. From Adidas, the Superstan paying tribute to the 50th anniversary of the superstar with the celebration of both iconic sneakers, and will celebrate Creatives through our off blank franchise with Vans.
We also expect to open our next Power Store at the New American Dream retail and entertainment complex at the Meadowlands in New Jersey. It will bring even more unique experiences and access to exclusive offerings to FLX.
Let me reiterate that we built upon our strong foundation in 2019.
We are optimistic about our company's future. We believe we have the right plan in place to deliver against our long-term financial objectives and by making progress on our strategic imperatives, we will strengthen our position at the centre of sneaker and youth culture creating value for our shareholders.
Before I turn the call back over to Lauren, let me share a few last thoughts with you.
First, I want to touch on the outbreak of the coronavirus. The health and safety of our associates and their families, our customers, and our suppliers is our top priority. This is a fluid situation that we are actively monitoring starting with those areas of the world where we are operate in, and where we have seen some impact to store traffic.
For example, Hong Kong, Singapore, and Italy.
We are also having ongoing conversations with our vendor partners with respect to the supply chain, and we will work closely with them as the situation unfolds to manage the impact on our business. On a more positive note, I want to take a moment to welcome two recent additions to our Board of Directors, Darlene Nicosia and Tristan Walker who bring a range of experiences and capabilities in global supply chain management and consumer brand marketing that will be of great source of insights to our board and management.
And finally, I want to thank each associate at Foot Locker Inc. for their dedication and commitment, without their focus, execution, and passion for the game we would not be able to deliver great customer experiences and achieve our long-term objectives.
Lauren, back to you.