10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: April 29, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 1-10299

______________________________________

(Exact name of registrant as specified in its charter)

______________________________________

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

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

(Address of principal executive offices, Zip Code)

(212-720-3700)

(Registrant’s telephone number, including area code)

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☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes☐No☑

Number of shares of Common Stock outstanding as of May 26, 2017: 131,303,334

FOOT LOCKER, INC.

TABLE OF CONTENTS

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statements of Comprehensive Income	3
		Condensed Consolidated Statements of Cash Flows	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 4.	Controls and Procedures	23
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	23
	Item 1A.	Risk Factors	23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 6.	Exhibits	23
SIGNATURE			24
INDEX OF EXHIBITS			25

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions, except shares)

	April 29,		April 30,		January 28,
	2017		2016		2017
	(Unaudited)		(Unaudited)		*
ASSETS
Current assets:
Cash and cash equivalents	$	1,049	$	1,062	$	1,046
Merchandise inventories		1,279		1,260		1,307
Other current assets		294		270		280
		2,622		2,592		2,633
Property and equipment, net		792		706		765
Deferred taxes		162		182		161
Goodwill		156		157		155
Other intangible assets, net		43		46		42
Other assets		102		75		84
	$	3,877	$	3,758	$	3,840
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	208	$	230	$	249
Accrued and other liabilities		327		347		363
Current portion of capital lease obligations		—		1		—
		535		578		612
Long-term debt and obligations under capital leases		127		128		127
Other liabilities		393		377		391
Total liabilities		1,055		1,083		1,130
Shareholders’ equity:
Common stock and paid-in capital: 133,088,450;  173,885,868; and 132,616,087 shares outstanding, respectively		914		1,127		900
Retained earnings		2,393		3,336		2,254
Accumulated other comprehensive loss		(357)		(323)		(363)
Less: Treasury stock at cost: 1,791,789;  37,896,771; and 1,120,466 shares, respectively		(128)		(1,465)		(81)
Total shareholders' equity		2,822		2,675		2,710
	$	3,877	$	3,758	$	3,840

See Accompanying Notes to Condensed Consolidated Financial Statements.

* The balance sheet at January 28, 2017 has been derived from the previously reported audited 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, 2017.

1

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions, except per share amounts)

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
Sales	$	2,001	$	1,987
Cost of sales		1,321		1,291
Gross margin		680		696
Selling, general and administrative expenses		371		361
Depreciation and amortization		41		39
Income from operations		268		296
Interest expense, net		—		—
Other income		(1)		(2)
Income before income taxes		269		298
Income tax expense		89		107
Net income	$	180	$	191
Basic earnings per share	$	1.37	$	1.40
Weighted-average shares outstanding		131.4		136.5
Diluted earnings per share	$	1.36	$	1.39
Weighted-average shares outstanding, assuming dilution		132.6		137.8

See Accompanying Notes to Condensed Consolidated Financial Statements.

2

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions)

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
Net income	$	180	$	191
Other comprehensive income, net of income tax:
Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax		4		44
Cash flow hedges:
Change in fair value of derivatives, net of income tax		(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 million, respectively, and foreign currency fluctuations		3		(1)
Comprehensive income	$	186	$	234

See Accompanying Notes to Condensed Consolidated Financial Statements.

3

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

($ in millions)

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016 *
From operating activities:
Net income	$	180	$	191
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		41		39
Share-based compensation expense		5		5
Qualified pension plan contributions		(25)		(25)
Change in assets and liabilities:
Merchandise inventories		31		39
Accounts payable		(41)		(54)
Accrued and other liabilities		(26)		(14)
Other, net		(6)		43
Net cash provided by operating activities		159		224
From investing activities:
Capital expenditures		(75)		(65)
Net cash used in investing activities		(75)		(65)
From financing activities:
Purchase of treasury shares		(38)		(88)
Dividends paid on common stock		(41)		(37)
Proceeds from exercise of stock options		9		7
Shares of common stock repurchased to satisfy tax withholding obligations		(9)		(6)
Net cash used in financing activities		(79)		(124)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(1)		7
Net change in cash, cash equivalents, and restricted cash		4		42
Cash, cash equivalents, and restricted cash at beginning of period		1,073		1,048
Cash, cash equivalents, and restricted cash at end of period	$	1,077	$	1,090
Cash paid during the period:
Interest	$	—	$	—
Income taxes	$	122	$	115

See Accompanying Notes to Condensed Consolidated Financial Statements.

*  Amounts for the three months ended April 30, 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.

4

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 normal, recurring adjustments 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. The results of operations for any interim period are not necessarily indicative of the results expected for the year. 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”) Form 10-K for the year ended January 28, 2017, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017.

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. Earlier application is permitted for annual reporting periods beginning after December 15, 2016. 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 does not expect to adopt these ASUs until required, and has not yet selected the transition method. Based on an evaluation of the standard as a whole, the Company has identified gift card breakage, direct-response advertising, and principal versus agent considerations as areas which will most likely be affected by the new revenue recognition guidance. We are in the process of finalizing the analysis of our revenue streams and quantifying the effects on the areas discussed above, and we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows.

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 early 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 on 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 for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted. The Company does not expect to adopt this ASU until required. 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. While we could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions as of April 29, 2017, we expect it will result in an increase in deferred income tax assets of approximately $30 million to $40 million.

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

5

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recently Adopted Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the thirteen weeks ended April 29,2017, the Company recorded excess tax benefits related to share-based compensation awards of $7 million to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefit. This ASU also requires that we now present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $6 million which were previously classified as cash flows from financing activities to operating activities for the first quarter of 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 first quarter of 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.

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, with early adoption permitted. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, as required by this ASU, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $28 million and $27 million as of April 30, 2016 and January 30, 2016, respectively, and $27 million as of January 28, 2017. As required by the ASU, we have provided a reconciliation from 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. See Note 3, Restricted Cash, for this reconciliation, as well as a discussion of the nature of our restricted cash balances.

2. Segment Information

The Company has determined that its 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. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense.

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
Sales	($ in millions)
Athletic Stores	$	1,722	$	1,735
Direct-to-Customers		279		252
Total sales	$	2,001	$	1,987
Operating Results
Athletic Stores	$	241	$	277
Direct-to-Customers		42		38
Division profit		283		315
Less: Corporate expense		15		19
Operating profit		268		296
Interest expense, net		—		—
Other income (1)		1		2
Income before income taxes	$	269	$	298

(1) 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 associated with foreign currency option contracts.

6

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Cash and cash equivalents	$	1,049	$	1,062	$	1,046
Restricted cash included in other current assets		1		1		—
Restricted cash included in other non-current assets		27		27		27
Cash, cash equivalents, and restricted cash	$	1,077	$	1,090	$	1,073

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 deposits held in insurance trusts in order to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims.

4. 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.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Athletic Stores	$	16	$	17	$	16
Direct-to-Customers		140		140		139
Total goodwill	$	156	$	157	$	155

5. Other Intangible Assets, net

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

		April 29, 2017						April 30, 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	$	118	$	(107)	$	11	$	123	$	(111)	$	12	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		21		(13)		8		20		(13)		7
	Favorable leases		7		(5)		2		7		(5)		2		7		(5)		2
		$	145	$	(125)	$	20	$	151	$	(129)	$	22	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	23					$	24					$	22
Other intangible assets, net						$	43					$	46					$	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.

7

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the thirteen week period ended April 29, 2017, the Company recorded $1 million of lease acquisition additions, primarily related to our European businesses. These additions are being amortized over a weighted-average life of 9 years.  Amortization expense recorded is as follows:

	Thirteen weeks ended
($ in millions)		April 29, 2017		April 30, 2016
Amortization expense	$	1	$	1

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

		($ in millions)
Remainder of 2017	$	3
2018		3
2019		3
2020		3
2021		2
2022		2

6. Accumulated Other Comprehensive Loss

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

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Foreign currency translation adjustments	$	(123)	$	(75)	$	(127)
Cash flow hedges		—		2		1
Unrecognized pension cost and postretirement benefit		(233)		(249)		(236)
Unrealized loss on available-for-sale security		(1)		(1)		(1)
	$	(357)	$	(323)	$	(363)

The changes in AOCL for the thirteen weeks ended April 29, 2017 were as follows:

					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		4		(1)		1		—		4
Reclassified from AOCL		—		—		2		—		2
Other comprehensive income		4		(1)		3		—		6
Balance as of April 29, 2017	$	(123)	$	—	$	(233)	$	(1)	$	(357)

Reclassifications from AOCL for the thirteen weeks ended April 29, 2017 were as follows:

		($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits- amortization of actuarial loss	$	3
Postretirement benefits- amortization of actuarial gain		—
Net periodic benefit cost (see Note 10)		3
Income tax benefit		(1)
Net of tax	$	2

8

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. 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 8,  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. No such gains or losses were recognized in earnings for any of the periods presented. 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 of the purchase of inventory was a  $1 million loss for the thirteen weeks ended April 29, 2017, and therefore increased AOCL. At April 29, 2017, the amount included in AOCL was not significant.For the thirteen weeks ended April 30, 2016, the net change in fair value was not significant. The notional value of the foreign exchange contracts designed as hedges outstanding at April 29, 2017 was $137 million, and these contracts mature at various dates through August 2018.

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 weeks ended April 29, 2017. The net change in fair value resulted in expense of $1 million for the thirteen weeks ended April 30, 2016. The notional value of the foreign exchange contract not designed as a hedge outstanding at April 29, 2017 was $2 million, and this contract matures in May 2017.

9

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. The notional value of the currency option contract not designated as a hedge outstanding at April 29, 2017 was 40 million euro, and this contract matures in July 2017.

Additionally, the Company enters into diesel fuel forward and option contracts to mitigate a portion of the Company’s freight expense due to the variability caused by fuel surcharges imposed by our third-party freight carriers. Changes in the fair value of these contracts are recorded in earnings immediately. The effect was not significant for any of the periods presented. No such contracts were outstanding at April 29, 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	April 29,		April 30,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	1	$	3	$	3
Foreign exchange forward contracts	Current liabilities	$	3	$	—	$	3
Foreign exchange forward contracts	Non-current liabilities	$	—	$	1	$	—

8. Fair Value Measurements

The Company’s 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 April 29, 2017						As of April 30, 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	$	—	$	6	$	—	$	—	$	6	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		—		—		—		2		—		—		3		—
Total Assets	$	—	$	6	$	—	$	—	$	8	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		2		—		—		—		—		—		3		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	3	$	—

10

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 fair value of 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.

The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility and therefore are classified as Level 2 instruments.

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:

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Carrying value	$	127	$	129	$	127
Fair value	$	147	$	149	$	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 values of cash and cash equivalents, and other current receivables and payables approximate their fair value.

9. Earnings Per Share

The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share 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 computation plus dilutive common stock equivalents.

The computation of basic and diluted earnings per share is as follows:

	Thirteen weeks ended
		April 29,		April 30,
		2017		2016
		(in millions, except per share data)
Net Income		$	180	$	191
Weighted-average common shares outstanding			131.4		136.5
Dilutive effect of potential common shares			1.2		1.3
Weighted-average common shares outstanding assuming dilution			132.6		137.8
Earnings per share - basic		$	1.37	$	1.40
Earnings per share - diluted		$	1.36	$	1.39
Anti-dilutive share-based awards excluded from diluted calculation			0.2		0.2

11

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 April 29, 2017 and April 30, 2016, respectively. These shares relate to RSU awards issued in connection with the Company’s long-term incentive program.

10. Pension and Postretirement Plans

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 cost and net periodic postretirement benefit income, which are recognized as part of SG&A expense:

	Pension Benefits				Postretirement Benefits
	Thirteen weeks ended				Thirteen weeks ended
	April 29,		April 30,		April 29,		April 30,
($ in millions)	2017		2016		2017		2016
Service cost	$	4	$	4	$	—	$	—
Interest cost		6		6		—		—
Expected return on plan assets		(9)		(9)		—		—
Amortization of net loss (gain)		3		4		—		(1)
Net benefit expense (income)	$	4	$	5	$	—	$	(1)

On February 23, 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 thisyear.Actual contributions are dependent on several factors, including the outcome of the ongoing U.S. pension litigation. See Note 12, Legal Proceedings, for further information.

11. Share-Based Compensation

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	2	$	3
Restricted stock and restricted stock units		3		2
Total share-based compensation expense	$	5	$	5
Tax benefit recognized	$	1	$	1

12

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Valuation Model and Assumptions

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

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

The following table shows the Company’s assumptions used to compute the share-based compensation expense for awards granted during the thirteen weeks ended April 29, 2017 and April 30, 2016:

		Stock Option Plans						Stock Purchase Plan
		April 29,			April 30,			April 29,			April 30,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.7	%		0.3	%
Expected volatility		25	%		30	%		29	%		25	%
Weighted-average expected award life (in years)		5.3			5.7			1.0			1.0
Dividend yield		1.7	%		1.7	%		2.0	%		1.6	%
Weighted-average fair value	$	15.58		$	15.78		$	10.33		$	11.12

The information in the following table covers option activity under the Company’s stock option plans for the thirteen weeks ended April 29, 2017:

		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	496				72.83
Exercised	(315)				27.83
Expired or cancelled	(2)				41.81
Options outstanding at April 29, 2017	2,985		6.7	$	49.19
Options exercisable at April 29, 2017	1,935		5.4	$	39.23
Options available for future grant at April 29, 2017	11,031

The total fair value of options vested as of April 29, 2017 and April 30, 2016 was $7 million and $8 million, respectively. The cash received from option exercises for the thirteen weeks ended April 29, 2017 and April 30, 2016 was $9 million and $7 million, respectively.

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Exercised	$	15	$	14

The total tax benefit realized from option exercises was $6 million and $5 million for the thirteen weeks ended April 29, 2017 and April 30, 2016, respectively.

13

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The aggregate intrinsic value for stock options outstanding, outstanding and exercisable, and vested and expected to vest (the difference between the Company’s 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:

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Outstanding	$	84	$	94
Outstanding and exercisable	$	74	$	91
Vested and expected to vest	$	84	$	94

As of April 29, 2017 there was $11 million of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a remaining weighted-average period of 1.8 years.The following table summarizes information about stock options outstanding and exercisable at April 29, 2017:

	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	551	2.4	$	14.37	551	$	14.37
$30.92 to $45.08	761	5.8		38.50	761		38.50
$55.02 to $62.11	700	7.4		61.26	467		61.43
$63.79 to $73.21	973	9.4		68.57	156		64.02
	2,985	6.7	$	49.19	1,935	$	39.23

Restricted Stock and Restricted Stock Units

Restricted shares of the Company’s common stock and restricted stock units (“RSU”) may be awarded to certain officers and key employees of the Company. Additionally, RSU awards are made to employees in connection with the Company’s long-term incentive program, and to nonemployee directors. Each RSU represents the right to receive one share of the Company’s common stock provided that the performance and vesting conditions are satisfied. There were 669,542 and 660,797 RSU awards outstanding as of April 29, 2017 and April 30, 2016, respectively.

Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company’s performance-based long-term incentive program are earned after the attainment of certain performance metrics 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. No dividends are paid or accumulated on RSU 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.

14

FOOT LOCKER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted stock and RSU activity for the thirteen weeks ended April 29, 2017 is summarized as follows:

			Weighted-
			Average	Weighted-
		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
Granted		237			72.83
Vested		(263)			48.60
Expired or cancelled		(59)			43.21
Nonvested at April 29, 2017		713	1.9	$	66.31
Aggregate value ($ in millions)	$	47

The total value of awards for which restrictions lapsed during the thirteen weeks ended April 29, 2017 and April 30, 2016 was $13 million and $7 million, respectively. As of April 29, 2017, there was $18 million of total unrecognized compensation cost related to nonvested restricted awards.

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 by the Company in past years. These legal proceedings include commercial, intellectual property, customer, environmental, and employment-related claims.

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. The trial was held in July 2015 and the court issued a decision in September 2015 in favor of the class on the foregoing claims. The court ordered that the Plan be reformed. As a result of this development, the Company determined that it is probable a liability exists. The Company’s reasonable estimate of this liability is a range between $100 million and $200 million, with no amount within that range more probable than any other amount. Therefore, in accordance with U.S. GAAP, the Company recorded a charge of $100 million pre-tax ($61 million after-tax) in the third quarter of 2015. This amount has been classified as a long-term liability. The Company has appealed the court’s decision, and the judgment has been stayed pending the outcome of the appeal. The Company will continue to vigorously defend itself in this case. In light of the uncertainties involved in this matter, there is no assurance that the ultimate resolution will 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 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 could be rendered or settlements entered into that could adversely affect the Company’s operating results or cash flows in a particular period.

15

Item 2. 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 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 footwear and apparel retailers in the world, with formats that include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep, 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.

The Foot Locker brand is one of the most widely recognized names in the markets in which we operate, epitomizing premium quality for the active lifestyle customer. This brand equity has aided our ability to successfully develop and increase our portfolio of complementary retail store formats, such as Lady Foot Locker and Kids Foot Locker, as well as Footlocker.com, our direct-to-customer business. Through various marketing channels and experiences, including social, digital, broadcast, 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 athletically inspired shoes and apparel with a wide selection of merchandise in a full-service environment.

Store Count

At April 29, 2017,  weoperated 3,354 stores as compared with 3,363 and 3,396 stores at January 28, 2017 and April 30, 2016, respectively.

During the first quarter of 2017, the Company entered into a franchise agreement with Fox-Wizel Ltd, who will operate franchise stores in Israel for the Company. Two franchise stores were opened in Israel during the current quarter. A total of 77 franchised stores were operating at April 29, 2017, as compared with 74 and 64 stores at January 28, 2017 and April 30, 2016, respectively. Revenue from the franchised stores was not significant for any of the periods presented. These stores are not included in the operating store count above.

Foreign Currency Fluctuations

Throughout the following discussions, 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 believe that presenting amounts on a constant currency basis is useful to investors because it enables them to better understand the changes in our business.

16

Results of Operations

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 sales also includes the sales of the Direct-to-Customers segment. 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 increased by $14 million, or 0.7 percent, to $2,001 million for the thirteen weeks ended April 29, 2017, from $1,987 million for the thirteen weeks ended April 30, 2016. Excluding the effect of foreign currency fluctuations, sales increased by 1.8 percent for the thirteen weeks ended April 29, 2017.Comparable-store sales increased by 0.5percent for the thirteen weeks ended April 29, 2017.  

Gross Margin

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
Gross margin rate	34.0	%	35.0	%
Basis point change in the gross margin rate	(100)
Components of the change-
Decline in the merchandise margin rate	(40)
Higher occupancy and buyers' compensation expense rate	(60)

The gross margin rate decreased by 100 basis points for the thirteen weeks ended April 29, 2017. This reflected a merchandise margin rate decline of 40 basis points and with an increase in the occupancy and buyers’ compensation expense rate of 60 basis points for the thirteen weeks ended April 29, 2017.

The merchandise margin rate decline for the current quarter primarily reflecteda  higher markdown rate for our Direct-to-Customers segment due to increased promotional activity in order to drive traffic to our websites, coupled with higher shipping and handling costs. A decrease in the markdown rate for our Athletic Stores segment partially offset the higher markdowns of the Direct-to-Customers segment to yield an overall merchandise margin rate decrease.

The higher occupancy and buyers’ compensation expense rate reflected higher rent-related costs coupled with a modest increase in sales, which resulted in the rate deleveraging by 60 basis points. Higher occupancy costs are primarily attributed to several high-profile location leases entered into recently.

Selling, General and Administrative Expenses (SG&A)

	Thirteen weeks ended
	April 29, 2017			April 30, 2016
	($ in millions)
SG&A	$	371		$	361
$ Change	$	10
% Change		2.8	%
SG&A as a percentage of sales		18.5	%		18.2	%

Excluding the effect of foreign currency fluctuations, SG&A increased by $16 million for the thirteen weeks ended April 29, 2017, as compared with the corresponding prior-year period. The prior-year period included $4 million of relocation-related costs in connection with the corporate headquarters move. Excluding this, the increase in SG&A was primarily related to higher store-related compensation costsas compared with the corresponding prior-year period.  Wages were higher mainly due to minimum wage increases, as well as related payroll taxes and benefits. Additionally, we incurred higher SG&A expenses, as planned,in connectionwith our ongoing investment in various technology and infrastructure projects.

17

Depreciation and Amortization

	Thirteen weeks ended
	April 29, 2017			April 30, 2016
	($ in millions)
Depreciation and amortization	$	41		$	39
$ Change	$	2
% Change		5.1	%

Depreciation and amortization increased by $2 million for the thirteen weeks ended April 29, 2017 as compared with the corresponding prior-year period. The increase in depreciation and amortization reflected increased capital spending on store projects, enhancing our digital sites, and various other technologies and infrastructure.

Interest Expense, Net

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
	($ in millions)
Interest expense	$	3	$	3
Interest income		(3)		(3)
Interest expense, net	$	—	$	—

Net interest expense was unchanged for the thirteen weeks ended April 29, 2017 as compared with the corresponding prior-year period.

Income Taxes

For the thirteen weeks ended April 29, 2017, the Company recorded an income tax provision of $89 million, which represented an effective tax rate of 33.0 percent, compared to the prior-year income tax provision of $107 million, which represented an effective tax rate of 36.0 percent. The Company’s interim provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items that occur within the periods presented.

The Company regularly assesses the adequacy of the Company’s provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company 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 for the thirteen weeks ended April 29, 2017 and April 30, 2016 were not significant.

During the thirteen weeks ended April 29, 2017 the Company recognized excess tax benefits of $7 million from share-based compensation reflecting the change required by ASC 718. With the adoption of ASU 2016-09 during the first quarter of 2017, excess tax benefits or deficiencies from share-based compensation are required to be recorded as a component of the income tax provision, rather than to equity.

Excluding the above-mentioned excess tax benefits, the effective tax rate for the thirteen weeks ended April29,2017 decreased as compared with the corresponding prior-year period, due primarily to a higher proportion of income earned in lower tax jurisdictions.

The Company currently expects its full-year tax rate to approximate 34 percent excluding the effect of any nonrecurring items that may occur. The actual tax rate will vary depending on the level of restricted stock vesting, stock option exercise activity, and the stock price at the vesting or exercise date. 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.

18

Net Income

For the thirteen weeks ended April 29, 2017, net income decreased by $11 million, or 5.8 percent, and diluted earnings per share decreased by 2.2 percent to $1.36 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, corporate expense, non-operating income, and net interest expense. The following table summarizes results by segment:

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
	($ in millions)
Sales
Athletic Stores	$	1,722	$	1,735
Direct-to-Customers		279		252
	$	2,001	$	1,987
Operating Results
Athletic Stores	$	241	$	277
Direct-to-Customers		42		38
Division profit		283		315
Less: Corporate expense		15		19
Operating profit		268		296
Other income (1)		1		2
Earnings before interest expense and income taxes		269		298
Interest expense, net		—		—
Income before income taxes	$	269	$	298

(1) 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 associated with foreign currency option contracts.

Athletic Stores

	Thirteen weeks ended
	April 29, 2017			April 30, 2016
	($ in millions)
Sales	$	1,722		$	1,735
$ Change	$	(13)
% Change		(0.7)	%
Division profit	$	241		$	277
Division profit margin		14.0	%		16.0	%

Excluding the effect of foreign currency fluctuations, Athletic Stores segment sales increased by 0.3 percent for the thirteen weeks ended April 29, 2017 as compared with the corresponding prior-year period. We believe that domestic sales were negatively affected by the delay of income tax refunds. The sales increase for the current quarter,excluding the effect of foreign currency fluctuations, was led by Champs Sports, as it continued its momentum from the prior year. This was partially offset by declines in Kids Foot Locker’ssales primarily due to the lack of availability in children’s sizes of certain lifestyle footwear styles that are currently on trend at our other banners.

19

Comparable-store sales decreased by 1.2 percent for the thirteen weeks ended April 29, 2017. Lower footwear sales were the primary factor in the decline in comparable-store sales. Although men’s and women’s footwear sales increasedcompared with  the prior year, these increases were not enough to compensate for the decline in sales ofchildren’s footwear. The increases in men’s and women’s footwear sales were primarily driven by comparable-store sales gains at our Champs Sports, Footaction, and Foot Locker Canada banners. SIX:02 contributed to the growth in women’s footwear by generating a significant increase in comparable-store sales, although from a small base. The comparable-store sales gain in men’s footwear was primarily driven by lifestyle running footwear, which was partially offset by a decline in sales of basketball footwear styles. The decline in children’s footwear resulting from the level of product availability and changing style preferences affected many of our store banners.

Apparel sales experienced comparable-store sales gains for the majority of our store banners for the thirteen weeks ended April 29, 2017. The strongest contributors to this increase were Champs Sports and Foot Locker Europe, which benefited from gains in men’s branded apparel. Additionally, Champs Sports’ private-label sales continued to grow with increasing gross margins.

Athletic Stores division profit decreased by 13.0 percent for the thirteen weeks ended April 29, 2017 as compared with the corresponding prior-year period. Division profit, as a percentage of sales decreased 200 basis points to 14.0 percent for the thirteen weeks ended April 29, 2017, as compared to the corresponding prior-year period. The decline in division profit reflected a lower gross margin rate coupled with SG&A expense deleverage.  

Direct-to-Customers

	Thirteen weeks ended
	April 29, 2017			April 30, 2016
	($ in millions)
Sales	$	279		$	252
$ Change	$	27
% Change		10.7	%
Division profit	$	42		$	38
Division profit margin		15.1	%		15.1	%

Comparable-sales for the Direct-to-Customers segment increased by 12.1 percent for the thirteen weeks ended April 29, 2017. This increase was primarily a result of the continued growth of ecommerce sales associated with our store-banner websites, both domestically and internationally. Additionally, Eastbay experienced a gain during the current quarter.

The footwear category delivered the strongest gains during the quarter. The footwear gains related to our domestic store-banner websites were driven by strong results from the Jordan brand, lifestyle running, and women’s casual styles. These gains were partially offset by declines in men’s basketball, specifically signature basketball styles. The footwear gains related to our international store-banner websites were primarily driven by lifestyle running styles.

Direct-to-Customers division profit for the thirteen weeks ended April 29, 2017 increased by $4 million as compared with the corresponding prior-year period. Division profit, as a percentage of sales, remained unchanged compared to the prior year. While sales in this banner increased, the gross margin rate declined due to increased markdowns and higher shipping and handling expense as this segment was more promotional during the current quarter. This was offset by diligent expense management, such as controlling publicity costs.

Corporate Expense

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
	($ in millions)
Corporate expense	$	15	$	19
$ Change	$	(4)

20

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 $3 million for both the thirteen weeks ended April 29, 2017 and April 30, 2016. 

The allocation of corporate expense to the operating divisions is adjusted annually based upon an internal study; accordingly, the allocation increased by $2 million for the thirteen weeks ended April 29, 2017 thus reducing corporate expense. Excluding the corporate allocation change, corporate expense decreased by $2 million for the thirteen weeks ended April29, 2017.

The decrease for the thirteen weeks ended April 29, 2017 was primarily due to the prior-yearcorporate headquarters relocation costs of $4 million. Additionally, incentive compensation expense decreased during the quarter by $1 million as compared with the prior-year period, reflecting the Company’s underperformance as compared with its plan. This was partially offset by increased corporate support costs such as legal services and real estate management,coupled with unfavorable foreign exchange results as compared with the prior year.

Liquidity and Capital Resources

Liquidity

Our primary source of liquidity has been cash flow from earnings, while the principal uses of cash have been: to fund inventory and other working capital requirements; to finance capital expenditures related to store openings, store remodelings, 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. We generally finance real estate with operating leases. We believe our cash, cash equivalents, and future cash flow from operations 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, and other factors. The amounts involved may be material. As of April 29, 2017, just under $1.2 billion remained available under the Company’s current share repurchase program.

As discussed further in the Legal Proceedings note under “Item 1. Financial Statements,” during the third quarter of 2015, in connection with our pension litigation, we recorded a pre-tax charge of $100 million ($61 million after-tax). In light of the uncertainties involved in this matter, there is no assurance that the ultimate resolution will not differ from the amount currently accrued by us. The $100 million charge has been classified as a long-term liability due to the uncertainty involved with the resolution of this litigation, as the appeals process can be lengthy. The pension plan is currently sufficiently funded to absorb a $100 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.

Any material adverse change in customer demand, fashion trends, competitive market forces, or customer acceptance of our merchandise mix and retail locations, uncertainties related to the effect of competitive products and pricing, our reliance on a few key vendors 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 “Disclosure Regarding Forward-Looking Statements,” could affect our ability to continue to fund our needs from business operations.

21

Operating Activities

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Net cash provided by operating activities	$	159	$	224
$ Change	$	(65)

The amount provided by operating activities reflects net income adjusted for non-cash items and working capital changes. Adjustments to net income for non-cash items include depreciation and amortization, and share-based compensation expense. The decrease from the prior year primarily reflects working capital changes and the decline in net income as compared with the prior year.

Investing Activities

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Net cash used in investing activities	$	75	$	65
$ Change	$	10

Capital expenditures were $10 million higher than the prior year. The increase was due to increased spending on corporate technology projects and cash payments related to the 2016 capital program. The Company’s full-year capitalspending is expected to be approximately $274 million, which includes $195 million related to the remodeling or relocation of approximately 190 existing stores and the opening of approximately 90 new stores, as well as $79 million for the development of information systems, websites, and infrastructure. 

Financing Activities

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Net cash used in financing activities	$	79	$	124
$ Change	$	(45)

During the thirteen weeks ended April 29, 2017, we repurchased 546,100 shares of our common stock for $38 million, as compared with 1,371,174 shares repurchased for $88 million in the corresponding prior-year period. The Company declared and paid dividends during the first quarter of 2017 and 2016 of $41 million and $37 million, respectively. This represented quarterly rates of $0.31 and $0.275 per share for 2017 and 2016, respectively. Additionally, we received proceeds from the issuance of common stock in connection with employee stock programs of $9 million and $7 million for the thirteen weeks ended April 29, 2017 and April30, 2016, respectively. Also, during the thirteen weeks ended April 29, 2017 and April 30, 2016,the Company paid $9 million and $6 million,respectively, in order to satisfy tax withholding obligations relating to the vesting of share-based equity awards.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates, other than the adoption of Accounting Standards Update (“ASU”) 2016-09 as described in Item 1. “Financial Statements” in Note 1, Summary of Significant Accounting Policies,  as compared with the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Annual Report on Form 10-K for the fiscal year ended January 28, 2017.

22

Recent Accounting Pronouncements

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

Item 4. Controls and Procedures

The Company’s management performed an evaluation under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), and completed an evaluation as of April 29, 2017 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 controls and procedures were effective to ensure that information relating to the Company that is required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms, and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended April 29, 2017, there were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) of the Exchange Act) that materially affected or are reasonably likely to affect the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There were no material changes to the risk factors disclosed in the 2016 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to shares of the Company’s common stock that the Company repurchased during the thirteen weeks ended April 29, 2017:  

					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)
Jan. 29 - Feb. 25, 2017	548,288	$	69.77	546,100	$	1,187,297,610
Feb. 26 - Apr. 1, 2017	123,012		72.83	—		1,187,297,610
Apr. 2 - Apr. 29, 2017	23		72.09	—		1,187,297,610
	671,323	$	70.33	546,100

(1)

These columns also reflect shares acquired in satisfaction of the tax withholding obligations of holders of restricted stock units and restricted stock awards which vested during the quarter, as well as 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.

(2)

The month of February includes 366,100 shares purchased, at an average cost of $69.37 per share, under the Company’s previous $1 billion share repurchase program. On February 14, 2017, the Board of Directors approved a new 3-year, $1.2 billion share repurchase program extending through January 2020. All subsequent share repurchases were made under the new program which resulted in 180,000 shares purchased, at an average cost of $70.57 per share.

Item 6. Exhibits
(a)	Exhibits
	The exhibits that are in this report immediately follow the index.

23

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: June 6, 2017	FOOT LOCKER, INC.
	/s/ Lauren B. Peters
	LAUREN B. PETERS
	Executive Vice President and Chief Financial Officer

24

FOOT LOCKER, INC.

INDEX OF  EXHIBITS

Exhibit No.	Description
3.1	By-Laws of Foot Locker, Inc. (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K dated May 17, 2017 filed on May 19, 2017 (the “May 17, 2017 Form 8-K”)).
10.1†	Foot Locker Annual Incentive Compensation Plan, as Amended and Restated (incorporated herein by reference to Exhibit 10.1 to the May 17, 2017 Form 8-K.
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.
†	Management contract or compensatory plan or arrangement.
*	Filed herewith.
**	Furnished herewith.

25

EX-12.1

Exhibit 12

FOOT LOCKER, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Unaudited)

($ in millions)

	Thirteen weeks ended					Fiscal Year Ended
		April 29,		April 30,		Jan. 28,		Jan. 30,		Jan. 31,		Feb. 1,		Feb. 2,
		2017		2016		2017		2016		2015		2014		2013
NET EARNINGS
Net income	$	180	$	191	$	664	$	541	$	520	$	429	$	397
Income tax expense		89		107		340		296		289		234		210
Interest expense, excluding capitalized interest		3		3		11		11		11		11		11
Portion of rents deemed representative of the interest factor (1/3)		67		63		269		252		249		236		222
	$	339	$	364	$	1,284	$	1,100	$	1,069	$	910	$	840
FIXED CHARGES
Gross interest expense	$	3	$	3	$	11	$	11	$	11	$	11	$	11
Portion of rents deemed representative of the interest factor (1/3)		67		63		269		252		249		236		222
	$	70	$	66	$	280	$	263	$	260	$	247	$	233
RATIO OF EARNINGS TO FIXED CHARGES		4.8		5.5		4.6		4.2		4.1		3.7		3.6

EX-15

Exhibit 15

ACCOUNTANTS’ ACKNOWLEDGEMENT

The Board of Directors

Foot Locker, Inc.:

We hereby acknowledge our awareness of the use of our report dated June 6, 2017 related to our review of interim financial information in the following Registration Statements:

- Form S-8 No. 33-10783

- Form S-8 No. 33-91888

- Form S-8 No. 33-91886

- Form S-8 No. 33-97832

- Form S-8 No. 333-07215

- Form S-8 No. 333-21131

- Form S-8 No. 333-62425

- Form S-8 No. 333-33120

- Form S-8 No. 333-41056

- Form S-8 No. 333-41058

- Form S-8 No. 333-74688

- Form S-8 No. 333-99829

- Form S-8 No. 333-111222

- Form S-8 No. 333-121515

- Form S-8 No. 333-144044

- Form S-8 No. 333-149803

- Form S-3 No. 33-43334

- Form S-3 No. 33-86300

- Form S-3 No. 333-64930

- Form S-8 No. 333-167066

- Form S-8 No. 333-171523

- Form S-8 No. 333-190680

- Form S-8 No. 333-196899

Pursuant to Rule 436(c) under the Securities Act of 1933 (the Act), such report is not considered a part of the registration statement prepared or certified by an independent registered public accounting firm or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

New York, New York

June 6, 2017

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Richard A. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foot Locker, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

June 6, 2017
	/s/ Richard A. Johnson
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Lauren B. Peters, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foot Locker, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.  The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

June 6, 2017
	/s/ Lauren B. Peters
	Chief Financial Officer

EX-32

Exhibit 32

FOOT LOCKER, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Foot Locker, Inc. (the “Registrant”) for the quarterly period ended April 29, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Richard A. Johnson, as Chief Executive Officer of the Registrant and Lauren B. Peters, as Chief Financial Officer of the Registrant, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: June 6, 2017
	/s/ Richard A. Johnson
	Richard A. Johnson
	Chief Executive Officer
	/s/ Lauren B. Peters
	Lauren B. Peters
	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the company specifically incorporates it by reference.

EX-99

Exhibit 99

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Foot Locker, Inc.:

We have reviewed the accompanying condensed consolidated balance sheets of Foot Locker, Inc. and subsidiaries as of April 29, 2017 and April 30, 2016, and the related condensed consolidated statements of operations,  comprehensive income, and cash flows for the thirteen week periods ended April 29, 2017 and April 30, 2016.  These condensed consolidated financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Foot Locker, Inc. and subsidiaries as of January28,2017, and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 23, 2017 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January28,2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

New York, New York
June 6, 2017

XML

Document And Entity Information - shares	3 Months Ended
	Apr. 29, 2017	May 26, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 29, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	FL
Entity Common Stock, Shares Outstanding		131,303,334
Entity Registrant Name	FOOT LOCKER, INC.
Entity Central Index Key	0000850209
Current Fiscal Year End Date	--02-03
Entity Filer Category	Large Accelerated Filer

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Current assets
Cash and cash equivalents	$ 1,049	$ 1,046	$ 1,062
Merchandise inventories	1,279	1,307	1,260
Other current assets	294	280	270
Assets, current, total	2,622	2,633	2,592
Property and equipment, net	792	765	706
Deferred taxes	162	161	182
Goodwill	156	155	157
Other intangible assets, net	43	42	46
Other assets	102	84	75
Total assets	3,877	3,840	3,758
Current liabilities
Accounts payable	208	249	230
Accrued and other liabilities	327	363	347
Current portion of capital lease obligations			1
Liabilities, current, total	535	612	578
Long-term debt and obligations under capital leases	127	127	128
Other liabilities	393	391	377
Total liabilities	1,055	1,130	1,083
Shareholders' equity
Common stock and paid-in capital: 133,088,450; 132,616,087 and 173,885,868 shares outstanding, respectively	914	900	1,127
Retained earnings	2,393	2,254	3,336
Accumulated other comprehensive loss	(357)	(363)	(323)
Less: Treasury stock at cost: 1,791,789; 1,120,466 and 37,896,771 shares, respectively	(128)	(81)	(1,465)
Total shareholders’ equity	2,822	2,710	2,675
Liabilities and equity, total	$ 3,877	$ 3,840	$ 3,758

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
CONSOLIDATED BALANCE SHEETS [Abstract]
Common Stock, Shares Outstanding, Issued, Total	133,088,450	132,616,087	173,885,868
Treasury Stock, Shares	1,791,789	1,120,466	37,896,771

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Apr. 29, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Sales		$ 2,001	$ 1,987
Cost of sales		1,321	1,291
Gross margin		680	696
Selling, general and administrative expenses		371	361
Depreciation and amortization		41	39	[1]
Income from operations		268	296
Interest expense, net
Other income	[2]	(1)	(2)
Income before income taxes		269	298
Income tax expense		89	107
Net income		$ 180	$ 191	[1]
Basic earnings per share		$ 1.37	$ 1.40
Weighted-average shares outstanding		131.4	136.5
Diluted earnings per share		$ 1.36	$ 1.39
Weighted-average shares outstanding, assuming dilution		132.6	137.8

[1] Amounts for the three months ended April 30, 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.

[2] 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 associated with foreign currency option contracts.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income	$ 180	$ 191	[1]
Foreign currency translation adjustment:
Translation adjustment arising during the period, net of income tax	4	44
Cash flow hedges:
Change in fair value of derivatives, net of income tax	(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 million, respectively, and foreign currency fluctuations	3	(1)
Comprehensive income	$ 186	$ 234

[1] Amounts for the three months ended April 30, 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.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense	$ 1	$ 1

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016	[1]
From Operating Activities
Net income	$ 180	$ 191
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	41	39
Share-based compensation expense	5	5
Qualified pension plan contributions	(25)	(25)
Change in assets and liabilities:
Merchandise inventories	31	39
Accounts payable	(41)	(54)
Accrued and other liabilities	(26)	(14)
Other, net	(6)	43
Net cash provided by operating activities	159	224
From Investing Activities
Capital expenditures	(75)	(65)
Net cash used in investing activities	(75)	(65)
From Financing Activities
Purchase of treasury shares	(38)	(88)
Dividends paid on common stock	(41)	(37)
Proceeds from exercise of stock options	9	7
Shares of common stock repurchased to satisfy tax withholding obligations	(9)	(6)
Net cash used in financing activities	(79)	(124)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash	(1)	7
Net change in cash, cash equivalents, and restricted cash	4	42
Cash, cash equivalents, and restricted cash at beginning of period	1,073	1,048
Cash, cash equivalents, and restricted cash at end of period	1,077	1,090
Cash Paid During the Period:
Interest
Income taxes	$ 122	$ 115

[1] Amounts for the three months ended April 30, 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.

XML

Summary of Significant Accounting Policies

3 Months Ended

Apr. 29, 2017

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 normal, recurring adjustments 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. The results of operations for any interim period are not necessarily indicative of the results expected for the year. 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”) Form 10-K for the year ended January 28, 2017, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017.

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. Earlier application is permitted for annual reporting periods beginning after December 15, 2016. 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 does not expect to adopt these ASUs until required, and has not yet selected the transition method. Based on an evaluation of the standard as a whole, the Company has identified gift card breakage, direct-response advertising, and principal versus agent considerations as areas which will most likely be affected by the new revenue recognition guidance. We are in the process of finalizing the analysis of our revenue streams and quantifying the effects on the areas discussed above, and we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows.

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 early 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 on 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 for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted. The Company does not expect to adopt this ASU until required. 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. While we could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions as of April 29, 2017, we expect it will result in an increase in deferred income tax assets of approximately $30 million to $40 million.

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

Recently Adopted Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the thirteen weeks ended April 29,2017, the Company recorded excess tax benefits related to share-based compensation awards of $7 million to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefit. This ASU also requires that we now present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $6 million which were previously classified as cash flows from financing activities to operating activities for the first quarter of 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 first quarter of 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.

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, with early adoption permitted. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, as required by this ASU, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $28 million and $27 million as of April 30, 2016 and January 30, 2016, respectively, and $27 million as of January 28, 2017. As required by the ASU, we have provided a reconciliation from 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. See Note 3, Restricted Cash, for this reconciliation, as well as a discussion of the nature of our restricted cash balances.

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Segment Information

3 Months Ended

Apr. 29, 2017

Segment Information [Abstract]

Segment Information

2. Segment Information

The Company has determined that its 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. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense.

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
Sales	($ in millions)
Athletic Stores	$	1,722	$	1,735
Direct-to-Customers		279		252
Total sales	$	2,001	$	1,987
Operating Results
Athletic Stores	$	241	$	277
Direct-to-Customers		42		38
Division profit		283		315
Less: Corporate expense		15		19
Operating profit		268		296
Interest expense, net		—		—
Other income (1)		1		2
Income before income taxes	$	269	$	298

(1) 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 associated with foreign currency option contracts.

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Restricted Cash

3 Months Ended

Apr. 29, 2017

Restricted Cash [Abstract]

Restricted Cash

3. Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Cash and cash equivalents	$	1,049	$	1,062	$	1,046
Restricted cash included in other current assets		1		1		—
Restricted cash included in other non-current assets		27		27		27
Cash, cash equivalents, and restricted cash	$	1,077	$	1,090	$	1,073

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 deposits held in insurance trusts in order to satisfy the requirement to collateralize part of the self-insured workers’ compensation and liability claims.

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Goodwill

3 Months Ended

Apr. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Goodwill

4. 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.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Athletic Stores	$	16	$	17	$	16
Direct-to-Customers		140		140		139
Total goodwill	$	156	$	157	$	155

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Other Intangible Assets, Net

3 Months Ended

Apr. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Other Intangible Assets, Net

5. Other Intangible Assets, net

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

		April 29, 2017						April 30, 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	$	118	$	(107)	$	11	$	123	$	(111)	$	12	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		21		(13)		8		20		(13)		7
	Favorable leases		7		(5)		2		7		(5)		2		7		(5)		2
		$	145	$	(125)	$	20	$	151	$	(129)	$	22	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	23					$	24					$	22
Other intangible assets, net						$	43					$	46					$	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.

During the thirteen week period ended April 29, 2017, the Company recorded $1 million of lease acquisition additions, primarily related to our European businesses. These additions are being amortized over a weighted-average life of 9 years.  Amortization expense recorded is as follows:

	Thirteen weeks ended
($ in millions)		April 29, 2017		April 30, 2016
Amortization expense	$	1	$	1

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

		($ in millions)
Remainder of 2017	$	3
2018		3
2019		3
2020		3
2021		2
2022		2

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Accumulated Other Comprehensive Loss

3 Months Ended

Apr. 29, 2017

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

6. Accumulated Other Comprehensive Loss

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

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Foreign currency translation adjustments	$	(123)	$	(75)	$	(127)
Cash flow hedges		—		2		1
Unrecognized pension cost and postretirement benefit		(233)		(249)		(236)
Unrealized loss on available-for-sale security		(1)		(1)		(1)
	$	(357)	$	(323)	$	(363)

The changes in AOCL for the thirteen weeks ended April 29, 2017 were as follows:

					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		4		(1)		1		—		4
Reclassified from AOCL		—		—		2		—		2
Other comprehensive income		4		(1)		3		—		6
Balance as of April 29, 2017	$	(123)	$	—	$	(233)	$	(1)	$	(357)

Reclassifications from AOCL for the thirteen weeks ended April 29, 2017 were as follows:

		($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits- amortization of actuarial loss	$	3
Postretirement benefits- amortization of actuarial gain		—
Net periodic benefit cost (see Note 10)		3
Income tax benefit		(1)
Net of tax	$	2

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Financial Instruments

3 Months Ended

Apr. 29, 2017

Financial Instruments [Abstract]

Financial Instruments

7. 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 8,  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. No such gains or losses were recognized in earnings for any of the periods presented. 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 of the purchase of inventory was a  $1 million loss for the thirteen weeks ended April 29, 2017, and therefore increased AOCL. At April 29, 2017, the amount included in AOCL was not significant.For the thirteen weeks ended April 30, 2016, the net change in fair value was not significant. The notional value of the foreign exchange contracts designed as hedges outstanding at April 29, 2017 was $137 million, and these contracts mature at various dates through August 2018.

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 weeks ended April 29, 2017. The net change in fair value resulted in expense of $1 million for the thirteen weeks ended April 30, 2016. The notional value of the foreign exchange contract not designed as a hedge outstanding at April 29, 2017 was $2 million, and this contract matures in May 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. The notional value of the currency option contract not designated as a hedge outstanding at April 29, 2017 was 40 million euro, and this contract matures in July 2017.

Additionally, the Company enters into diesel fuel forward and option contracts to mitigate a portion of the Company’s freight expense due to the variability caused by fuel surcharges imposed by our third-party freight carriers. Changes in the fair value of these contracts are recorded in earnings immediately. The effect was not significant for any of the periods presented. No such contracts were outstanding at April 29, 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	April 29,		April 30,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	1	$	3	$	3
Foreign exchange forward contracts	Current liabilities	$	3	$	—	$	3
Foreign exchange forward contracts	Non-current liabilities	$	—	$	1	$	—

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Fair Value Measurements

3 Months Ended

Apr. 29, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements

8. Fair Value Measurements

The Company’s 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 April 29, 2017						As of April 30, 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	$	—	$	6	$	—	$	—	$	6	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		—		—		—		2		—		—		3		—
Total Assets	$	—	$	6	$	—	$	—	$	8	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		2		—		—		—		—		—		3		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	3	$	—

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 fair value of 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.

The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility and therefore are classified as Level 2 instruments.

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:

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Carrying value	$	127	$	129	$	127
Fair value	$	147	$	149	$	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 values of cash and cash equivalents, and other current receivables and payables approximate their fair value.

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Earnings Per Share

3 Months Ended

Apr. 29, 2017

Earnings Per Share [Abstract]

Earnings Per Share

9. Earnings Per Share

The Company accounts for and discloses earnings per share using the treasury stock method. Basic earnings per share 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 computation plus dilutive common stock equivalents.

The computation of basic and diluted earnings per share is as follows:

	Thirteen weeks ended
		April 29,		April 30,
		2017		2016
		(in millions, except per share data)
Net Income		$	180	$	191
Weighted-average common shares outstanding			131.4		136.5
Dilutive effect of potential common shares			1.2		1.3
Weighted-average common shares outstanding assuming dilution			132.6		137.8
Earnings per share - basic		$	1.37	$	1.40
Earnings per share - diluted		$	1.36	$	1.39
Anti-dilutive share-based awards excluded from diluted calculation			0.2		0.2

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 April 29, 2017 and April 30, 2016, respectively. These shares relate to RSU awards issued in connection with the Company’s long-term incentive program.

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Pension and Postretirement Plans

3 Months Ended

Apr. 29, 2017

Pension and Postretirement Plans [Abstract]

Pension and Postretirement Plans

10. Pension and Postretirement Plans

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 cost and net periodic postretirement benefit income, which are recognized as part of SG&A expense:

	Pension Benefits				Postretirement Benefits
	Thirteen weeks ended				Thirteen weeks ended
	April 29,		April 30,		April 29,		April 30,
($ in millions)	2017		2016		2017		2016
Service cost	$	4	$	4	$	—	$	—
Interest cost		6		6		—		—
Expected return on plan assets		(9)		(9)		—		—
Amortization of net loss (gain)		3		4		—		(1)
Net benefit expense (income)	$	4	$	5	$	—	$	(1)

On February 23, 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 12, Legal Proceedings, for further information.

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Share-Based Compensation

3 Months Ended

Apr. 29, 2017

Share-Based Compensation [Abstract]

Share-Based Compensation

11. Share-Based Compensation

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	2	$	3
Restricted stock and restricted stock units		3		2
Total share-based compensation expense	$	5	$	5
Tax benefit recognized	$	1	$	1

Valuation Model and Assumptions

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

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

The following table shows the Company’s assumptions used to compute the share-based compensation expense for awards granted during the thirteen weeks ended April 29, 2017 and April 30, 2016:  

		Stock Option Plans						Stock Purchase Plan
		April 29,			April 30,			April 29,			April 30,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.7	%		0.3	%
Expected volatility		25	%		30	%		29	%		25	%
Weighted-average expected award life (in years)		5.3			5.7			1.0			1.0
Dividend yield		1.7	%		1.7	%		2.0	%		1.6	%
Weighted-average fair value	$	15.58		$	15.78		$	10.33		$	11.12

The information in the following table covers option activity under the Company’s stock option plans for the thirteen weeks ended April 29, 2017:

		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	496				72.83
Exercised	(315)				27.83
Expired or cancelled	(2)				41.81
Options outstanding at April 29, 2017	2,985		6.7	$	49.19
Options exercisable at April 29, 2017	1,935		5.4	$	39.23
Options available for future grant at April 29, 2017	11,031

The total fair value of options vested as of April 29, 2017 and April 30, 2016 was $7 million and $8 million, respectively. The cash received from option exercises for the thirteen weeks ended April 29, 2017 and April 30, 2016 was $9 million and $7 million, respectively.

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Exercised	$	15	$	14

The total tax benefit realized from option exercises was $6 million and $5 million for the thirteen weeks ended April 29, 2017 and April 30, 2016, respectively.

The aggregate intrinsic value for stock options outstanding, outstanding and exercisable, and vested and expected to vest (the difference between the Company’s 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:

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Outstanding	$	84	$	94
Outstanding and exercisable	$	74	$	91
Vested and expected to vest	$	84	$	94

As of April 29, 2017 there was $11 million of total unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a remaining weighted-average period of 1.8 years.The following table summarizes information about stock options outstanding and exercisable at April 29, 2017:

	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	551	2.4	$	14.37	551	$	14.37
$30.92 to $45.08	761	5.8		38.50	761		38.50
$55.02 to $62.11	700	7.4		61.26	467		61.43
$63.79 to $73.21	973	9.4		68.57	156		64.02
	2,985	6.7	$	49.19	1,935	$	39.23

Restricted Stock and Restricted Stock Units

Restricted shares of the Company’s common stock and restricted stock units (“RSU”) may be awarded to certain officers and key employees of the Company. Additionally, RSU awards are made to employees in connection with the Company’s long-term incentive program, and to nonemployee directors. Each RSU represents the right to receive one share of the Company’s common stock provided that the performance and vesting conditions are satisfied. There were 669,542 and 660,797 RSU awards outstanding as of April 29, 2017 and April 30, 2016, respectively.

Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company’s performance-based long-term incentive program are earned after the attainment of certain performance metrics 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. No dividends are paid or accumulated on RSU 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.

Restricted stock and RSU activity for the thirteen weeks ended April 29, 2017 is summarized as follows:

			Weighted-
			Average	Weighted-
		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
Granted		237			72.83
Vested		(263)			48.60
Expired or cancelled		(59)			43.21
Nonvested at April 29, 2017		713	1.9	$	66.31
Aggregate value ($ in millions)	$	47

The total value of awards for which restrictions lapsed during the thirteen weeks ended April 29, 2017 and April 30, 2016 was $13 million and $7 million, respectively. As of April 29, 2017, there was $18 million of total unrecognized compensation cost related to nonvested restricted awards.

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Legal Proceedings

3 Months Ended

Apr. 29, 2017

Legal Proceedings [Abstract]

Legal Proceedings

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 by the Company in past years. These legal proceedings include commercial, intellectual property, customer, environmental, and employment-related claims.

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. The trial was held in July 2015 and the court issued a decision in September 2015 in favor of the class on the foregoing claims. The court ordered that the Plan be reformed. As a result of this development, the Company determined that it is probable a liability exists. The Company’s reasonable estimate of this liability is a range between $100 million and $200 million, with no amount within that range more probable than any other amount. Therefore, in accordance with U.S. GAAP, the Company recorded a charge of $100 million pre-tax ($61 million after-tax) in the third quarter of 2015. This amount has been classified as a long-term liability. The Company has appealed the court’s decision, and the judgment has been stayed pending the outcome of the appeal. The Company will continue to vigorously defend itself in this case. In light of the uncertainties involved in this matter, there is no assurance that the ultimate resolution will 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 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 could be rendered or settlements entered into that could adversely affect the Company’s operating results or cash flows in a particular period.

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Summary of Significant Accounting Policies (Policy)

3 Months Ended

Apr. 29, 2017

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

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 normal, recurring adjustments 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. The results of operations for any interim period are not necessarily indicative of the results expected for the year. 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”) Form 10-K for the year ended January 28, 2017, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2017.

Recent Accounting Pronouncements

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. Earlier application is permitted for annual reporting periods beginning after December 15, 2016. 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 does not expect to adopt these ASUs until required, and has not yet selected the transition method. Based on an evaluation of the standard as a whole, the Company has identified gift card breakage, direct-response advertising, and principal versus agent considerations as areas which will most likely be affected by the new revenue recognition guidance. We are in the process of finalizing the analysis of our revenue streams and quantifying the effects on the areas discussed above, and we currently do not expect the adoption will significantly affect our consolidated statements of operations, financial position or cash flows.

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 early 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 on 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 for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted. The Company does not expect to adopt this ASU until required. 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. While we could initiate additional relevant transactions prior to this ASU’s adoption date, based on deferred tax amounts related to applicable past intercompany transactions as of April 29, 2017, we expect it will result in an increase in deferred income tax assets of approximately $30 million to $40 million.

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

Recently Adopted Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including tax consequences, forfeitures, and classifications of the tax related items in the statement of cash flows. The Company adopted ASU 2016-09 during the first quarter of 2017. Amendments relating to accounting for excess tax benefits and deficiencies have been adopted prospectively. For the thirteen weeks ended April 29,2017, the Company recorded excess tax benefits related to share-based compensation awards of $7 million to the income statement, within the income tax provision, whereas such benefits were previously recognized in equity. Also, in the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefit. This ASU also requires that we now present excess tax benefits or deficiencies as operating activities in our condensed consolidated statement of cash flow. As a result of adopting this change retrospectively, we reclassified excess tax benefits of $6 million which were previously classified as cash flows from financing activities to operating activities for the first quarter of 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 first quarter of 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.

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, with early adoption permitted. The Company has adopted this ASU as of the first quarter of 2017. Accordingly, as required by this ASU, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $28 million and $27 million as of April 30, 2016 and January 30, 2016, respectively, and $27 million as of January 28, 2017. As required by the ASU, we have provided a reconciliation from 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. See Note 3, Restricted Cash, for this reconciliation, as well as a discussion of the nature of our restricted cash balances.

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Segment Information (Tables)

3 Months Ended

Apr. 29, 2017

Segment Information [Abstract]

Sales and Division Operating Results for Reportable Segments

The Company evaluates performance based on several factors, of which the primary financial measure is division results. Division profit reflects income before income taxes, corporate expense, non-operating income, and net interest expense.

	Thirteen weeks ended
	April 29, 2017		April 30, 2016
Sales	($ in millions)
Athletic Stores	$	1,722	$	1,735
Direct-to-Customers		279		252
Total sales	$	2,001	$	1,987
Operating Results
Athletic Stores	$	241	$	277
Direct-to-Customers		42		38
Division profit		283		315
Less: Corporate expense		15		19
Operating profit		268		296
Interest expense, net		—		—
Other income (1)		1		2
Income before income taxes	$	269	$	298

(1) 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 associated with foreign currency option contracts.

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Restricted Cash (Tables)

3 Months Ended

Apr. 29, 2017

Restricted Cash [Abstract]

Reconciliation of Cash and Cash Equivalents

The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Cash and cash equivalents	$	1,049	$	1,062	$	1,046
Restricted cash included in other current assets		1		1		—
Restricted cash included in other non-current assets		27		27		27
Cash, cash equivalents, and restricted cash	$	1,077	$	1,090	$	1,073

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Goodwill (Tables)

3 Months Ended

Apr. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Schedule of Goodwill

The following table provides a summary of goodwill by reportable segment. The change in the balance represents foreign currency exchange fluctuations.

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Athletic Stores	$	16	$	17	$	16
Direct-to-Customers		140		140		139
Total goodwill	$	156	$	157	$	155

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Other Intangible Assets, Net (Tables)

3 Months Ended

Apr. 29, 2017

Goodwill and Other Intangible Assets, Net [Abstract]

Components of Finite-Lived Intangible Assets and Intangible Assets Not Subject to Amortization

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

		April 29, 2017						April 30, 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	$	118	$	(107)	$	11	$	123	$	(111)	$	12	$	116	$	(105)	$	11
	Trademarks / trade names		20		(13)		7		21		(13)		8		20		(13)		7
	Favorable leases		7		(5)		2		7		(5)		2		7		(5)		2
		$	145	$	(125)	$	20	$	151	$	(129)	$	22	$	143	$	(123)	$	20
Indefinite life intangible assets: (1)
	Runners Point Group trademarks / trade names					$	23					$	24					$	22
Other intangible assets, net						$	43					$	46					$	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.

Amortization Expense

Amortization expense recorded is as follows:

	Thirteen weeks ended
($ in millions)		April 29, 2017		April 30, 2016
Amortization expense	$	1	$	1

Estimated Future Expected Amortization Expense for Finite Life Intangible Assets

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

		($ in millions)
Remainder of 2017	$	3
2018		3
2019		3
2020		3
2021		2
2022		2

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Apr. 29, 2017

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

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

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Foreign currency translation adjustments	$	(123)	$	(75)	$	(127)
Cash flow hedges		—		2		1
Unrecognized pension cost and postretirement benefit		(233)		(249)		(236)
Unrealized loss on available-for-sale security		(1)		(1)		(1)
	$	(357)	$	(323)	$	(363)

Changes in Accumulated Other Comprehensive Loss

The changes in AOCL for the thirteen weeks ended April 29, 2017 were as follows:

					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		4		(1)		1		—		4
Reclassified from AOCL		—		—		2		—		2
Other comprehensive income		4		(1)		3		—		6
Balance as of April 29, 2017	$	(123)	$	—	$	(233)	$	(1)	$	(357)

Reclassification from Accumulated Other Comprehensive Loss

Reclassifications from AOCL for the thirteen weeks ended April 29, 2017 were as follows:

		($ in millions)
Amortization of actuarial (gain) loss:
Pension benefits- amortization of actuarial loss	$	3
Postretirement benefits- amortization of actuarial gain		—
Net periodic benefit cost (see Note 10)		3
Income tax benefit		(1)
Net of tax	$	2

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Financial Instruments (Tables)

3 Months Ended

Apr. 29, 2017

Financial Instruments [Abstract]

Fair Value of Derivative Contracts on Gross Basis, by Type of Contract

The following is presented on a gross basis, by type of contract:

	Balance Sheet	April 29,		April 30,		January 28,
($ in millions)	Caption	2017		2016		2017
Hedging Instruments:
Foreign exchange forward contracts	Current assets	$	1	$	3	$	3
Foreign exchange forward contracts	Current liabilities	$	3	$	—	$	3
Foreign exchange forward contracts	Non-current liabilities	$	—	$	1	$	—

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Fair Value Measurements (Tables)

3 Months Ended

Apr. 29, 2017

Fair Value Measurements [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

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 April 29, 2017						As of April 30, 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	$	—	$	6	$	—	$	—	$	6	$	—	$	—	$	6	$	—
Foreign exchange forward contracts		—		—		—		—		2		—		—		3		—
Total Assets	$	—	$	6	$	—	$	—	$	8	$	—	$	—	$	9	$	—
Liabilities
Foreign exchange forward contracts		—		2		—		—		—		—		—		3		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	3	$	—

Carrying Value and Estimated Fair Value of Long-Term Debt

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

	April 29,		April 30,		January 28,
	2017		2016		2017
	($ in millions)
Carrying value	$	127	$	129	$	127
Fair value	$	147	$	149	$	148

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Earnings Per Share (Tables)

3 Months Ended

Apr. 29, 2017

Earnings Per Share [Abstract]

Basic and Diluted Weighted-Average Number of Common Shares Outstanding

The computation of basic and diluted earnings per share is as follows:

	Thirteen weeks ended
		April 29,		April 30,
		2017		2016
		(in millions, except per share data)
Net Income		$	180	$	191
Weighted-average common shares outstanding			131.4		136.5
Dilutive effect of potential common shares			1.2		1.3
Weighted-average common shares outstanding assuming dilution			132.6		137.8
Earnings per share - basic		$	1.37	$	1.40
Earnings per share - diluted		$	1.36	$	1.39
Anti-dilutive share-based awards excluded from diluted calculation			0.2		0.2

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Pension and Postretirement Plans (Tables)

3 Months Ended

Apr. 29, 2017

Pension and Postretirement Plans [Abstract]

Net Benefit Expense (Income)

The following are the components of net periodic pension benefit cost and net periodic postretirement benefit income, which are recognized as part of SG&A expense:

	Pension Benefits				Postretirement Benefits
	Thirteen weeks ended				Thirteen weeks ended
	April 29,		April 30,		April 29,		April 30,
($ in millions)	2017		2016		2017		2016
Service cost	$	4	$	4	$	—	$	—
Interest cost		6		6		—		—
Expected return on plan assets		(9)		(9)		—		—
Amortization of net loss (gain)		3		4		—		(1)
Net benefit expense (income)	$	4	$	5	$	—	$	(1)

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Share-Based Compensation (Tables)

3 Months Ended

Apr. 29, 2017

Share-Based Compensation [Abstract]

Total Compensation Expense and the Related Tax Benefits Recognized

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Options and shares purchased under the employee stock purchase plan	$	2	$	3
Restricted stock and restricted stock units		3		2
Total share-based compensation expense	$	5	$	5
Tax benefit recognized	$	1	$	1

Assumptions used to Compute Share-Based Compensation Expense

The following table shows the Company’s assumptions used to compute the share-based compensation expense for awards granted during the thirteen weeks ended April 29, 2017 and April 30, 2016:  

		Stock Option Plans						Stock Purchase Plan
		April 29,			April 30,			April 29,			April 30,
		2017			2016			2017			2016
Weighted-average risk free rate of interest		2.1	%		1.4	%		0.7	%		0.3	%
Expected volatility		25	%		30	%		29	%		25	%
Weighted-average expected award life (in years)		5.3			5.7			1.0			1.0
Dividend yield		1.7	%		1.7	%		2.0	%		1.6	%
Weighted-average fair value	$	15.58		$	15.78		$	10.33		$	11.12

Options Granted under Stock Option Plans

The information in the following table covers option activity under the Company’s stock option plans for the thirteen weeks ended April 29, 2017:

		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	496				72.83
Exercised	(315)				27.83
Expired or cancelled	(2)				41.81
Options outstanding at April 29, 2017	2,985		6.7	$	49.19
Options exercisable at April 29, 2017	1,935		5.4	$	39.23
Options available for future grant at April 29, 2017	11,031

Total Intrinsic Value of Options Exercised

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

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Exercised	$	15	$	14

Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable

The aggregate intrinsic value for stock options outstanding, outstanding and exercisable, and vested and expected to vest (the difference between the Company’s 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:

	Thirteen weeks ended
	April 29,		April 30,
	2017		2016
	($ in millions)
Outstanding	$	84	$	94
Outstanding and exercisable	$	74	$	91
Vested and expected to vest	$	84	$	94

Information about Stock Options Outstanding and Exercisable

The following table summarizes information about stock options outstanding and exercisable at April 29, 2017:

	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	551	2.4	$	14.37	551	$	14.37
$30.92 to $45.08	761	5.8		38.50	761		38.50
$55.02 to $62.11	700	7.4		61.26	467		61.43
$63.79 to $73.21	973	9.4		68.57	156		64.02
	2,985	6.7	$	49.19	1,935	$	39.23

Restricted Share and Unit Activity

Restricted stock and RSU activity for the thirteen weeks ended April 29, 2017 is summarized as follows:

			Weighted-
			Average	Weighted-
		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
Granted		237			72.83
Vested		(263)			48.60
Expired or cancelled		(59)			43.21
Nonvested at April 29, 2017		713	1.9	$	66.31
Aggregate value ($ in millions)	$	47

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Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016		Jan. 28, 2017	Jan. 30, 2016
Significant Accounting Policies [Line Items]
Shares of common stock repurchased to satisfy tax withholding obligations	$ 9	$ 6	[1]
Accounting Standards Update 2016-09 [Member]
Significant Accounting Policies [Line Items]
Excess tax benefits on share-based compensation, operating activities	7	6
Shares of common stock repurchased to satisfy tax withholding obligations		6
Accounting Standards Update 2016-18 [Member]
Significant Accounting Policies [Line Items]
Restricted cash		$ 28		$ 27	$ 27
Maximum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 02 [Member]
Significant Accounting Policies [Line Items]
Addition to assets and liabilities from accounting standards update	4,000
Maximum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 16 [Member]
Significant Accounting Policies [Line Items]
Increase in deferred tax assets	40
Minimum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 02 [Member]
Significant Accounting Policies [Line Items]
Addition to assets and liabilities from accounting standards update	3,000
Minimum [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016 16 [Member]
Significant Accounting Policies [Line Items]
Increase in deferred tax assets	$ 30

[1] Amounts for the three months ended April 30, 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.

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Segment Information (Narrative) (Details)	3 Months Ended
	Apr. 29, 2017 segment
Segment Information [Abstract]
Number of reportable segments	2

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Segment Information (Sales and Division Operating Results for Reportable Segments) (Details) - USD ($) $ in Millions		3 Months Ended
		Apr. 29, 2017	Apr. 30, 2016
Segment Reporting Information [Line Items]
Sales		$ 2,001	$ 1,987
Division profit		283	315
Less: Corporate expense		15	19
Income from operations		268	296
Interest expense, net
Other income	[1]	1	2
Income before income taxes		269	298
Athletic Stores [Member]
Segment Reporting Information [Line Items]
Sales		1,722	1,735
Operating results before restructuring income		241	277
Direct-to-Customers [Member]
Segment Reporting Information [Line Items]
Sales		279	252
Operating results before restructuring income		$ 42	$ 38

[1] 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 associated with foreign currency option contracts.

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Restricted Cash (Reconciliation of Cash and Cash Equivalents) (Details) - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016		Jan. 30, 2016	[1]
Restricted Cash [Abstract]
Cash and cash equivalents	$ 1,049	$ 1,046	$ 1,062
Restricted cash included in other current assets	1		1
Restricted cash included in other non-current assets	27	27	27
Cash, cash equivalents, and restricted cash	$ 1,077	$ 1,073	$ 1,090	[1]	$ 1,048

[1] Amounts for the three months ended April 30, 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.

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Goodwill (Schedule of Goodwill) (Details) - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Goodwill [Line Items]
Goodwill	$ 156	$ 155	$ 157
Athletic Stores [Member]
Goodwill [Line Items]
Goodwill	16	16	17
Direct-to-Customers [Member]
Goodwill [Line Items]
Goodwill	$ 140	$ 139	$ 140

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Other Intangible Assets, Net (Narrative) (Details) $ in Millions	3 Months Ended
	Apr. 29, 2017 USD ($)
Goodwill and Other Intangible Assets, Net [Abstract]
Additions of intangible assets of new leases	$ 1
Weighted-average amortization period	9 years

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Other Intangible Assets, Net (Schedule of Other Intangible Assets) (Details) - USD ($) $ in Millions		Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value	[1]	$ 145	$ 143	$ 151
Amortized intangible assets, Accum. amort.	[1]	(125)	(123)	(129)
Amortized intangible assets, Net value	[1]	20	20	22
Other intangible assets, net		43	42	46
Lease Acquisition Costs [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value	[1]	118	116	123
Amortized intangible assets, Accum. amort.	[1]	(107)	(105)	(111)
Amortized intangible assets, Net value	[1]	11	11	12
Trademarks and Trade Names [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value	[1]	20	20	21
Amortized intangible assets, Accum. amort.	[1]	(13)	(13)	(13)
Amortized intangible assets, Net value	[1]	7	7	8
Favorable Leases [Member]
Intangible Assets by Major Class [Line Items]
Amortized intangible assets, Gross value	[1]	7	7	7
Amortized intangible assets, Accum. amort.	[1]	(5)	(5)	(5)
Amortized intangible assets, Net value	[1]	2	2	2
Runners Point Group [Member]
Intangible Assets by Major Class [Line Items]
Indefinite life intangible assets, Net Value	[1]	$ 23	$ 22	$ 24

[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

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Other Intangible Assets, Net (Amortization Expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Goodwill and Other Intangible Assets, Net [Abstract]
Amortization expense	$ 1	$ 1

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Other Intangible Assets, Net (Estimated Future Amortization Expense for Finite Lived Intangibles) (Details) $ in Millions	Apr. 29, 2017 USD ($)
Goodwill and Other Intangible Assets, Net [Abstract]
Remainder of 2017	$ 3
2018	3
2019	3
2020	3
2021	2
2022	$ 2

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Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Accumulated Other Comprehensive Loss [Abstract]
Foreign currency translation adjustments	$ (123)	$ (127)	$ (75)
Cash flow hedges		1	2
Unrecognized pension cost and postretirement benefit	(233)	(236)	(249)
Unrealized loss on available-for-sale security	(1)	(1)	(1)
Accumulated other comprehensive income (loss), net of tax, total	$ (357)	$ (363)	$ (323)

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Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss) (Details) $ in Millions	3 Months Ended
	Apr. 29, 2017 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (363)
OCI before reclassification	4
Reclassified from AOCI	2
Other comprehensive income/(loss)	6
Ending Balance	(357)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(127)
OCI before reclassification	4
Reclassified from AOCI
Other comprehensive income/(loss)	4
Ending Balance	(123)
Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	1
OCI before reclassification	(1)
Reclassified from AOCI
Other comprehensive income/(loss)	(1)
Ending Balance
Items Related to Pension and Postretirement Benefits [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(236)
OCI before reclassification	1
Reclassified from AOCI	2
Other comprehensive income/(loss)	3
Ending Balance	(233)
Unrealized Loss on Available-For-Sale Security [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(1)
OCI before reclassification
Reclassified from AOCI
Other comprehensive income/(loss)
Ending Balance	$ (1)

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Accumulated Other Comprehensive Loss (Reclassifications from Accumulated Other Comprehensive Loss) (Details) $ in Millions	3 Months Ended
	Apr. 29, 2017 USD ($)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 10)	$ 3
Income tax benefit	(1)
Net of tax	2
Pension Benefits [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 10)	3
Postretirement Benefits [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit cost (see Note 10)

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Financial Instruments (Narrative) (Details) € in Millions, $ in Millions	3 Months Ended
	Apr. 29, 2017 USD ($)	Apr. 30, 2016 USD ($)	Apr. 29, 2017 EUR (€) contract	Apr. 29, 2017 USD ($) contract
Derivatives Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member]
Derivative [Line Items]
Notional value of contracts outstanding				$ 137
Increase (decrease) in fair value of hedge positions	$ (1)
Derivatives Designated as Non-Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member]
Derivative [Line Items]
Notional value of contracts outstanding				$ 2
Foreign exchange derivative NOT designated as cash flow hedges, gain (loss)		$ (1)
Derivatives Designated as Non-Hedging Instruments [Member] | Foreign Currency Option Contracts [Member]
Derivative [Line Items]
Notional value of contracts outstanding | €			€ 40
Derivatives Designated as Non-Hedging Instruments [Member] | Diesel Fuel Forward Contracts [Member]
Derivative [Line Items]
Number of contracts outstanding | contract			0	0
Maximum [Member] | Derivatives Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member]
Derivative [Line Items]
Derivative contracts maturity date	2018-08
Maximum [Member] | Derivatives Designated as Non-Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member]
Derivative [Line Items]
Derivative contracts maturity date	2017-05
Maximum [Member] | Derivatives Designated as Non-Hedging Instruments [Member] | Foreign Currency Option Contracts [Member]
Derivative [Line Items]
Derivative contracts maturity date	2017-07

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Financial Instruments (Fair Value Derivative Contracts on Gross Basis by Type of Contract) (Details) - Forward Foreign Exchange Contracts [Member] - Derivatives Designated as Hedging Instruments [Member] - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Current Assets [Member]
Derivative [Line Items]
Fair value of derivative hedging assets	$ 1	$ 3	$ 3
Current Liabilities [Member]
Derivative [Line Items]
Fair value of derivative hedging liability	$ 3	$ 3
Non-current Liabilities [Member]
Derivative [Line Items]
Fair value of derivative hedging liability			$ 1

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Liabilities measured at fair value on recurring basis
Level 1 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis	6	9	8
Liabilities measured at fair value on recurring basis	2	3
Level 2 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis	6	6	6
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Liabilities measured at fair value on recurring basis
Level 3 [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 1 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 1 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 2 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis	2	3
Forward Foreign Exchange Contracts [Member] | Level 2 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis		3	2
Forward Foreign Exchange Contracts [Member] | Level 3 [Member] | Derivative Financial Instruments, Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities measured at fair value on recurring basis
Forward Foreign Exchange Contracts [Member] | Level 3 [Member] | Derivative Financial Instruments, Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets measured at fair value on recurring basis

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Fair Value Measurements (Carrying Value and Estimated Fair Value of Long-Term Debt) (Details) - USD ($) $ in Millions	Apr. 29, 2017	Jan. 28, 2017	Apr. 30, 2016
Fair Value Measurements [Abstract]
Long-term debt, Carrying value	$ 127	$ 127	$ 129
Long-term debt, Fair value	$ 147	$ 148	$ 149

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Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Earnings Per Share [Abstract]
Contingently issuable shares excluded from diluted earnings per share	0.4	0.3

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Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net Income	$ 180	$ 191	[1]
Weighted-average common shares outstanding	131.4	136.5
Dilutive effect of potential common shares	1.2	1.3
Weighted-average common shares outstanding assuming dilution	132.6	137.8
Basic earnings per share (in dollars per shares)	$ 1.37	$ 1.40
Diluted earnings per share (in dollars per share)	$ 1.36	$ 1.39
Stock Option Plans [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive share-based awards excluded from diluted calculation	0.2	0.2

[1] Amounts for the three months ended April 30, 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.

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Pension and Postretirement Plans (Narrative) (Details) $ in Millions	Feb. 23, 2017 USD ($)
U.S. Qualified Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer's contribution	$ 25

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Pension and Postretirement Plans (Net Benefit Expense (Income)) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 4	$ 4
Interest cost	6	6
Expected return on plan assets	(9)	(9)
Amortization of net loss (gain)	3	4
Net benefit expense (income)	$ 4	5
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost
Interest cost
Expected return on plan assets
Amortization of net loss (gain)		(1)
Net benefit expense (income)		$ (1)

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Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of options vested	$ 7	$ 8
Cash received from options exercised	9	7
Tax benefit realized from options exercised	6	$ 5
Restricted Stock and Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 18
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number	669,542	660,797
Fair value of awards	$ 13	$ 7
Awards vesting period description	Generally, awards fully vest after the passage of time, typically three years. However, RSU awards made in connection with the Company's performance-based long-term incentive program are earned after the attainment of certain performance metrics and vest after the passage of time.
Nonvested Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 11
Unrecognized compensation cost related to nonvested stock options, weighted-average period expected to be recognized	1 year 9 months 18 days

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Share-Based Compensation (Total Compensation Expense Included in SG&A and the Related Tax Benefits Recognized) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	$ 5	$ 5	[1]
Tax benefit recognized	1	1
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense	2	3
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense	$ 3	$ 2

[1] Amounts for the three months ended April 30, 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.

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Share-Based Compensation (Assumptions Used to Compute Share-Based Compensation Expense) (Details) - $ / shares	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average risk free rate of interest	2.10%	1.40%
Expected volatility	25.00%	30.00%
Weighted-average expected award life (in years)	5 years 3 months 18 days	5 years 8 months 12 days
Dividend yield	1.70%	1.70%
Weighted-average fair value	$ 15.58	$ 15.78
2013 ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average risk free rate of interest	0.70%	0.30%
Expected volatility	29.00%	25.00%
Weighted-average expected award life (in years)	1 year	1 year
Dividend yield	2.00%	1.60%
Weighted-average fair value	$ 10.33	$ 11.12

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Share-Based Compensation (Options Granted Under Stock Option Plans) (Details) shares in Thousands	3 Months Ended
	Apr. 29, 2017 $ / shares shares
Number of Shares
Options outstanding at beginning of year	2,806
Granted	496
Exercised	(315)
Expired or cancelled	(2)
Options outstanding at end of period	2,985
Options exercisable at end of period	1,935
Options available for future grant at end of period	11,031
Weighted-Average Exercise Price
Options outstanding at beginning of year | $ / shares	$ 42.61
Granted | $ / shares	72.83
Exercised | $ / shares	27.83
Expired or cancelled | $ / shares	41.81
Options outstanding at end of period | $ / shares	49.19
Options exercisable at end of period | $ / shares	$ 39.23
Options outstanding, weighted-average remaining contractual life	6 years 8 months 12 days
Options exercisable at end of period, Weighted-average remaining contractual life	5 years 4 months 24 days

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Share-Based Compensation (Total Intrinsic Value of Options Exercised) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Intrinsic value of stock options
Exercised	$ 15	$ 14

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Share-Based Compensation (Aggregate Intrinsic Value for Stock Options Outstanding and Exercisable) (Details) - USD ($) $ in Millions	Apr. 29, 2017	Apr. 30, 2016
Share-Based Compensation [Abstract]
Outstanding	$ 84	$ 94
Outstanding and exercisable	74	91
Vested and expected to vest	$ 84	$ 94

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Share-Based Compensation (Information about Stock Options Outstanding and Exercisable) (Details) - $ / shares shares in Thousands	3 Months Ended
	Apr. 29, 2017	Jan. 28, 2017
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares	2,985	2,806
Options outstanding, weighted-average remaining contractual life	6 years 8 months 12 days
Options Outstanding, Weighted-Average Exercise Price	$ 49.19	$ 42.61
Options Exercisable, Number of Shares	1,935
Options Exercisable, Weighted-Average Exercise Price	$ 39.23
$9.85 to $24.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	9.85
Range of Exercise Prices, Upper Limit	$ 24.75
Options Outstanding, Number of Shares	551
Options outstanding, weighted-average remaining contractual life	2 years 4 months 24 days
Options Outstanding, Weighted-Average Exercise Price	$ 14.37
Options Exercisable, Number of Shares	551
Options Exercisable, Weighted-Average Exercise Price	$ 14.37
$30.92 to $45.08 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	30.92
Range of Exercise Prices, Upper Limit	$ 45.08
Options Outstanding, Number of Shares	761
Options outstanding, weighted-average remaining contractual life	5 years 9 months 18 days
Options Outstanding, Weighted-Average Exercise Price	$ 38.50
Options Exercisable, Number of Shares	761
Options Exercisable, Weighted-Average Exercise Price	$ 38.50
$55.02 to $62.11 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	55.02
Range of Exercise Prices, Upper Limit	$ 62.11
Options Outstanding, Number of Shares	700
Options outstanding, weighted-average remaining contractual life	7 years 4 months 24 days
Options Outstanding, Weighted-Average Exercise Price	$ 61.26
Options Exercisable, Number of Shares	467
Options Exercisable, Weighted-Average Exercise Price	$ 61.43
$63.79 to $73.21 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	63.79
Range of Exercise Prices, Upper Limit	$ 73.21
Options Outstanding, Number of Shares	973
Options outstanding, weighted-average remaining contractual life	9 years 4 months 24 days
Options Outstanding, Weighted-Average Exercise Price	$ 68.57
Options Exercisable, Number of Shares	156
Options Exercisable, Weighted-Average Exercise Price	$ 64.02

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Share-Based Compensation (Changes in Nonvested Options) (Details) - Restricted Stock and Units [Member] $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Apr. 29, 2017 USD ($) $ / shares shares
Number of Shares
Nonvested, Beginning Balance | shares	798
Granted | shares	237
Vested | shares	(263)
Expired or cancelled | shares	(59)
Nonvested, Ending Balance | shares	713
Aggregate value | $	$ 47
Wtg. Avg. remaining contractual life (in years)	1 year 10 months 24 days
Weighted-Average Grant Date Fair Value per Share
Nonvested, Beginning Balance | $ / shares	$ 56.91
Granted | $ / shares	72.83
Vested | $ / shares	48.60
Expired or cancelled | $ / shares	43.21
Nonvested, Ending Balance | $ / shares	$ 66.31

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Legal Proceedings (Narrative) (Details) - Osberg V. Foot Locker, Inc [Member] $ in Millions	3 Months Ended
	Oct. 31, 2015 USD ($)
Loss contingency, loss in period	$ 100
Loss contingency loss in period after tax	61
Minimum [Member]
Loss contingency, range of possible loss	100
Maximum [Member]
Loss contingency, range of possible loss	$ 200