Business Overview

Foot Locker, Inc. leads the celebration of sneaker and youth culture around the globe through a portfolio of banners including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, Footaction, and Sidestep. Foot Locker, Inc. and its subsidiaries hereafter are referred to as the "Company," "we," "our," or "us." We operate primarily mall-based stores, as well as stores in high-traffic urban retail areas and high streets, in 27 countries including the United States, Canada, Europe, Australia, New Zealand, and Asia. Our purpose is to inspire and empower youth culture around the world, by fueling a shared passion for self-expression and creating unrivaled experiences at the heart of the global sneaker community.

We use our omni-channel capabilities to bridge the digital world and physical stores, including order-in-store, buy online and pickup-in-store, and buy online and ship-from-store, as well as e-commerce. We operate websites and mobile apps aligned with the names of our store banners (including: footlocker.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu and related e-commerce sites in the various European countries that we operate, footlocker.com.au, footlocker.nz, sidestep-shoes.de, side-stepshoes.nl, footlocker.hk, footlocker.sg, and footlocker.my). These sites offer some of the largest online product selections and provide a seamless link between e-commerce and physical stores. We also operate the websites for eastbay.com and eastbayteamsales.com.

Store Count

At May 1, 2021, we operated 2,952 stores as compared with 2,998 and 3,113 stores at January 30, 2021 and May 2, 2020, respectively.

Franchise Operations

A total of 131 franchised stores were operating at May 1, 2021, as compared with 127 and 135 stores at January 30, 2021 and May 2, 2020, respectively. Revenue from franchised stores was not significant for any of the periods presented. These stores are not included in the operating store count above.

COVID-19 Update

In March 2020, the World Health Organization designated COVID-19 a pandemic. COVID-19 had a significant effect on overall economic conditions in the various geographic areas in which we have operations. Our top priority is to protect our team members and their families, our customers, and our operations. We have made best efforts to comply with all precautionary measures as directed by health authorities and local, state, and national governments.

Beginning in March 2020 and through the remainder of the first quarter of 2020, we temporarily closed substantially all of our retail store locations in response to governmental orders related to the COVID-19 outbreak. As of the end of the first quarter of 2020, approximately 100 stores were open. We were subsequently able to gradually reopen store locations under applicable regulations. Throughout 2020, the pandemic and the shelter in place orders negatively affected customer traffic into the stores that were operating, and certain stores required additional closures during the remainder of the year. For the first quarter of this year, we operated approximately 83 percent of the possible operating days, as compared with 48 percent in the first quarter of 2020. Our operations in Europe and Canada continued to experience significant temporary closures throughout the first quarter of 2021. Our distribution centers have been operating relatively unaffected during this time. In order mitigate the effects of the temporary closures, we have been operating in-store fulfillment activities.

Given the dynamic nature of these circumstances, the duration of business disruption, and reduced customer traffic in our stores, the related financial effect cannot be reasonably estimated at this time but may materially affect our business for the remainder of 2021.





                                            First Quarter 2021 Form 10-Q Page 17

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Reconciliation of Non-GAAP Measures

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

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

These non-GAAP measures are presented because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core business or affect comparability. In addition, these non-GAAP measures are useful in assessing our progress in achieving our long-term financial objectives. We estimate the tax effect of all non-GAAP adjustments by applying a marginal tax rate to each of the respective items. The income tax items represent the discrete amount that affected the period. The non-GAAP financial information is provided in addition to, and not as an alternative to, our reported results prepared in accordance with GAAP. Presented below is a reconciliation of GAAP and non-GAAP results for the thirteen weeks ended May 1, 2021 and May 2, 2020.




                                                     Thirteen weeks ended
                                                   May 1,             May 2,
($ in millions, except per share amounts)           2021               2020
Pre-tax income:
Income (loss) before income taxes              $          284     $        (105)
Pre-tax amounts excluded from GAAP:
Impairment and other charges                                4                 16
Adjusted income (loss) before income taxes
(non-GAAP)                                     $          288     $         (89)

After-tax income:
Net income (loss)                              $          202     $        (110)
After-tax adjustments excluded from GAAP:
Impairment and other charges, net of income
tax benefit of $1 and $3, respectively                      3                 13
Tax charge related to revaluation of
certain intellectual property rights                        -                 27

Adjusted net income (loss) (non-GAAP) $ 205 $ (70)



Earnings per share:
Diluted earnings (loss) per share              $         1.93     $       (1.06)
Diluted EPS amounts excluded from GAAP:
Impairment and other charges                             0.03               0.13
Tax charge related to revaluation of
certain intellectual property rights                        -               0.26
Adjusted diluted earnings (loss) per share
(non-GAAP)                                     $         1.96     $       (0.67)




                                            First Quarter 2021 Form 10-Q Page 18

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During the thirteen weeks ended May 1, 2021 and May 2, 2020, we recorded pre-tax charges of $4 million and $16 million, respectively, classified as Impairment and Other Charges. See the Impairment and Other Charges section for further information. Related to the non-GAAP adjustments for income taxes, during the first quarter of 2020 we recorded a $27 million tax charge related to the revaluation of certain intellectual property rights, pursuant to a non-U.S. advance pricing agreement.

Segment Reporting

We have determined that we have three operating segments, North America, EMEA, and Asia Pacific. Our North America operating segment includes the results of the following banners operating in the U.S. and Canada: Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, and Footaction, including each of their related e-commerce businesses, as well as our Eastbay business that includes internet, catalog, and team sales. Our EMEA operating segment includes the results of the following banners operating in Europe: Foot Locker, Sidestep, and Kids Foot Locker, including each of their related e-commerce businesses. Our Asia Pacific operating segment includes the results of Foot Locker and Kids Foot Locker and the related e-commerce businesses operating in Australia, New Zealand, and Asia. We have further aggregated these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics.

Results of Operations



We evaluate performance based on several factors, primarily the banner's
financial results, referred to as division profit. Division profit reflects
income before income taxes, impairment and other charges, corporate expenses,
non-operating income, and net interest (expense) income. The table below
summarizes our results:


                                            Thirteen weeks ended
                                            May 1,         May 2,
($ in millions)                              2021           2020
Sales                                     $     2,153     $  1,176

Operating Results
Division profit (loss)                            315         (79)
Less: Impairment and other charges (1)              4           16
Less: Corporate expense (2)                        29           10
Income (loss) from operations                     282        (105)
Interest expense, net                             (2)          (1)
Other income, net (3)                               4            1

Income (loss) before income taxes $ 284 $ (105)

(1) See the Impairment and Other Charges section for further information.

Corporate expense consists of unallocated selling, general and administrative

expenses as well as depreciation and amortization related to the Company's (2) corporate headquarters, centrally managed departments, unallocated insurance


    and benefit programs, certain foreign exchange transaction gains and losses,
    and other items.


    Other income includes non-operating items, franchise royalty income, changes
    in fair value of minority interests measured using the fair value measurement

alternative, changes in the market value of our available-for-sale security, (3) our share of earnings or losses related to our equity method investments, and


    net benefit expense related to our pension and postretirement programs
    excluding the service cost component. See the Other income, net section for
    further information.




                                            First Quarter 2021 Form 10-Q Page 19

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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 sales also includes our direct-to-customers channel. Stores opened or closed during the period are not included in the comparable-store base; however, stores closed temporarily for relocation or remodeling are included. Stores that were temporarily closed due to the COVID-19 pandemic are also included in the computation of comparable-store sales. Computations exclude the effect of foreign currency fluctuations.

The information shown below represents certain sales metrics by sales channel:




                                         Thirteen weeks ended
                                          May 1,       May 2,
($ in millions)                            2021         2020
Stores
Sales                                  $    1,620    $     814
$ Change                               $      806        (944)
% Change                                     99.0 %     (53.7) %
% of total sales                             75.2 %       69.2 %

Comparable sales increase (decrease) 97.4 % (53.4) %



Direct-to-customers
Sales                                  $      533    $     362
$ Change                               $      171           42
% Change                                     47.2 %       13.1 %
% of total sales                             24.8 %       30.8 %
Comparable sales increase                    43.0 %       14.3 %

For the thirteen weeks ended May 1, 2021, total sales increased by $977 million, or 83.1 percent, to $2,153 million, as compared with the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales increased by 79.4 percent for the thirteen weeks ended May 1, 2021 as compared with the corresponding prior-year period. These comparisons were significantly affected by the closures necessitated by the COVID-19 pandemic, most of the stores were closed during the first quarter of 2020. Our stores were only open for 48 percent of the operating days last year as compared with 83 percent this year. By geography, our European and Canadian operations continued to be negatively affected by the required closures during the current year. Europe and Canada were open for 39 percent and 75 percent of the total available operating days, respectively. While sales increased significantly compared with the prior-year period, we also exceeded the sales of the first quarter of 2019. As compared to the first quarter of 2019, total sales increased 3.6 percent, and 2.4 percent excluding the effect of foreign exchange rate fluctuations.

Total comparable sales represented an increase of 80.3 percent for the quarter. Our stores and direct-to-customers channels generated significant increases, which was a result of the temporary closure of our stores across all of our banners around the world during the first quarter of 2020. Our significant improvement also reflected increased consumer demand for exciting and new product offerings and the effect of government stimulus. We continue to leverage our technology platforms to improve the digital experience.

For the combined channels, all of our operating segments (North America, EMEA, and Asia Pacific) generated significant sales increases as compared to the first quarter of last year, which was negatively affected by the temporary store closures necessitated by the pandemic. Both EMEA and Canada generated significant increases despite the continued temporary store closures required in the first quarter this year. Our North American operating segment's sales strength was across all banners and was led by Champs Sports, with an increase of over 100 percent. Within EMEA, our Sidestep and Foot Locker banners were negatively affected by the ongoing temporary closures in Germany. Asia Pacific, our smallest operating segment, also experienced an increase of over 100 percent.





                                            First Quarter 2021 Form 10-Q Page 20

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From a product perspective for the combined channels, the increase was across all families of business - footwear, apparel, and accessories. All wearer segments within the footwear category experienced increases, with the largest increases coming from sales of men's and children's basketball footwear styles. Apparel sales benefited from increases in sales of men's and kid's apparel. The continued athleisure and fitness trend, coupled with exciting product offerings from our suppliers, drove the significant increase in sales as compared with last year.



Gross Margin


                                                      Thirteen weeks ended
                                                     May 1,           May 2,
                                                      2021             2020
Gross margin rate                                         34.8 %           23.0 %
Basis point increase (decrease) in the gross
margin rate                                              1,180          (1,020)
Components of the change-
Merchandise margin rate improvement (decline)              250            (170)
Lower (higher) occupancy and buyers'
compensation expense rate                                  930            (850)

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

The gross margin rate improved to 34.8 percent for the thirteen weeks ended May 1, 2021, as compared with corresponding prior-year period, reflecting a higher merchandise margin rate since we were significantly less promotional than a year ago, coupled with leverage on the relatively fixed costs. Comparing the gross margin rate to the first quarter of 2019, gross margin improved by 160 basis point reflecting an 80-basis point improvement in the merchandise margin rate and an 80 basis point improvement on occupancy and buyers' compensation rate.

The occupancy rate for the first quarter was positively affected by the increase in sales and COVID-19 related rent abatements. Due to completed lease negotiations, we were able to record $5 million of rent savings due to rent abatements during the thirteen weeks ended May 1, 2021. We record rent abatements in rent expense when the negotiations are completed and the leases are modified.

Selling, General and Administrative Expenses (SG&A)




                                    Thirteen weeks ended
                                   May 1,          May 2,
($ in millions)                     2021            2020
SG&A                             $      418      $      316
$ Change                         $      102
% Change                               32.3 %
SG&A as a percentage of sales          19.4 %          26.9 %

SG&A increased by $102 million, or $89 million excluding the effect of foreign currency fluctuations, for the thirteen weeks ended May 1, 2021 as compared with the corresponding prior-year period. As a percentage of sales, SG&A decreased by 750 basis points for the thirteen weeks ended May 1, 2021 driven by higher sales in the quarter as sales in the prior year were significantly affected by the closures necessitated by COVID-19.





                                            First Quarter 2021 Form 10-Q Page 21

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SG&A for the thirteen weeks ended May 1, 2021 and May 2, 2020 included payroll subsidies from local governments of $10 million and $40 million, respectively. The higher amount related to the prior year credit reflected the fact that we continued to pay our employees throughout most of the first quarter despite the temporary store closures. The thirteen weeks ended May 1, 2021 included incremental expense of $2 million for personal protective equipment compared with an insignificant cost in the corresponding prior-year period. SG&A expense in the current year reflected higher incentive compensation expense of $20 million reflecting our strong performance. Excluding the above-mentioned items and the effect of foreign currency fluctuations, SG&A increased by $37 million or 11 percent representing variable expenses associated with higher sales.

Depreciation and Amortization




                                   Thirteen weeks ended
                                   May 1,          May 2,
($ in millions)                     2021            2020

Depreciation and amortization $ 45 $ 44 $ Change

                         $         1
% Change                                 2.3 %

Depreciation and amortization expense increased by $1 million for the thirteen weeks ended May 1, 2021, as compared with the corresponding prior-year periods. Excluding the effect of foreign currency fluctuations, depreciation and amortization was essentially unchanged as compared with the prior year.

Impairment and Other Charges

During the first quarter of 2021, we recorded an impairment charge of $2 million related to the underperformance of one of our minority investments. Additionally, we recorded a charge of $2 million, which was primarily related to severance in connection with the reorganization of certain support functions.

In May 2020, we made the strategic decision to close our Runners Point business. Certain Runners Point stores converted to other banners and approximately 40 Runners Point and Sidestep stores were closed. We also conducted an impairment review for certain underperforming stores operating in Europe. We evaluated the long-lived assets, including the right-of-use assets, of 70 stores and recorded non-cash charges of $15 million to write down store fixtures, leasehold improvements, and right-of-use assets.

The Company and the Company's U.S. pension plan were involved in litigation related to the conversion of the plan to a cash balance plan. The court entered its final judgment in 2018, which required the plan to be reformed as directed by the court order. We recorded charges of $1 million for the thirteen weeks ended May 2, 2020 related to administrative expenses in connection with the reformation.



Corporate Expense


                       Thirteen weeks ended
                      May 1,          May 2,
($ in millions)        2021            2020
Corporate expense    $      29       $      10
$ Change             $      19

Corporate expense consists of unallocated general and administrative expenses as well as depreciation and amortization related to our corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items. Depreciation and amortization included in corporate expense was $7 million and $5 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.





                                            First Quarter 2021 Form 10-Q Page 22

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The allocation of corporate expense to the operating divisions is adjusted annually based upon an internal study; accordingly, the allocation increased by $5 million in 2021, thus reducing corporate expense. Excluding the corporate allocation change, corporate expense increased by $24 million as compared with the prior-year period. This increase was primarily due to higher incentive compensation expense.



Operating Results


                                   Thirteen weeks ended
                                   May 1,         May 2,
($ in millions)                     2021           2020
Division profit (loss)           $      315      $   (79)
Division profit (loss) margin          14.6 %       (6.7) %

Division profit margin as a percentage of sales increased to 14.6 percent of sales for the thirteen weeks ended May 1, 2021, with both sales channels generating significant improvements in both gross margin and expense leverage. The results for prior year were negatively affected by the pandemic.



Interest Expense, Net


                           Thirteen weeks ended
                          May 1,         May 2,
($ in millions)            2021           2020
Interest expense         $     (3)      $     (3)
Interest income                  1              2
Interest expense, net    $     (2)      $     (1)

We recorded $2 million of net interest expense for the thirteen weeks ended May 1, 2021, as compared with net interest expense of $1 million for the corresponding prior-year period. Net interest expense increased due to a reduction in interest income, primarily as a result of lower average interest rates on our cash and cash equivalents.



Other Income, Net


                      Thirteen weeks ended
                     May 1,         May 2,
($ in millions)       2021           2020
Other income, net   $       4      $       1

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

The change in other income primarily represented higher franchise income and an improvement in our market value of our available-for-sale security.





                                            First Quarter 2021 Form 10-Q Page 23

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Income Taxes


                                Thirteen weeks ended
                                May 1,         May 2,
($ in millions)                  2021           2020
Provision for income taxes    $       82      $      5
Effective tax rate                  28.8 %       (4.9) %

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

For the first quarter of 2020, in accordance with the authoritative guidance, we used a discrete effective tax rate method to calculate income taxes because small changes in the estimated level and mix of annual income or loss by jurisdiction would have resulted in significant changes in the estimated annual effective tax rate making the historical method unreliable.

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

During the thirteen weeks ended May 1, 2021, we recorded $1 million excess tax benefits from stock-based compensation.

The tax rate for the prior-year period was negatively affected by a $27 million tax charge related to the revaluation of certain intellectual property rights pursuant to a non-U.S. advance pricing agreement. In addition, we recognized a $2 million tax benefit for the reversal of a withholding tax accrual that was no longer required.

Excluding the above-mentioned discrete items, the effective tax rates for the thirteen weeks ended May 1, 2021 increased, as compared with the corresponding prior-year period, primarily due to the change in the mix of domestic and foreign earnings and losses.

We currently expect our full-year tax rate to approximate 29 percent excluding the effect of any nonrecurring items that may occur. The actual tax rate will vary depending on the level and mix of income earned in the various jurisdictions.

Liquidity and Capital Resources

Liquidity

Our primary source of liquidity has been cash flow from operations, while the principal uses of cash have been to fund inventory and other working capital requirements; finance capital expenditures related to store openings, store remodelings, internet and mobile sites, information systems, and other support facilities; make retirement plan contributions, quarterly dividend payments, and interest payments; and 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, future cash flow from operations, and amounts available under our credit agreement will be adequate to fund these requirements.





                                            First Quarter 2021 Form 10-Q Page 24

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The Company may also repurchase its common stock or seek to retire or purchase outstanding debt through open market purchases, privately negotiated transactions, or otherwise. Share repurchases and retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions, strategic considerations, and other factors. The amounts involved may be material. As of May 1, 2021, approximately $797 million remained available under our current $1.2 billion share repurchase program.

In January 2022, we will repay the $98 million principal outstanding of our 8.5 percent debentures.

Any material adverse change in customer demand, fashion trends, competitive market forces, or customer acceptance of our merchandise mix, retail locations and websites, uncertainties related to the effect of competitive products and pricing, our reliance on a few key suppliers for a significant portion of our merchandise purchases and risks associated with global product sourcing, economic conditions worldwide, the effects of currency fluctuations, continued uncertainties caused by the COVID-19 pandemic, as well as other factors listed under the headings "Disclosure Regarding Forward-Looking Statements," and "Risk Factors" could affect our ability to continue to fund our needs from business operations.



Operating Activities


                                                          Thirteen weeks ended
                                                        May 1,          May 2,
($ in millions)                                          2021            2020

Net cash provided by (used in) operating activities $ 398 $ (116) $ Change

$    514

Operating activities reflects net income (loss) adjusted for non-cash items and working capital changes. Adjustments to net income (loss) for non-cash items include gains, impairment charges, other charges, depreciation and amortization, deferred income taxes, and share-based compensation expense.

The increase in cash provided by operating activities, as compared with the same period last year, reflected higher accounts payable and accrued and other liabilities, as well as higher net income. As of May 1, 2021, we have withheld approximately $32 million of lease and lease-related payments as we continue to negotiate rent deferrals or abatements with our landlords for the period that our stores were closed due to the COVID-19 pandemic.

During the fourth quarter of 2020, we were notified by our property insurance carrier that it had approved a $10 million partial settlement on our claim for losses sustained in connection with the social unrest of 2020. The cash received during the first quarter of 2021 from this partial settlement was classified in the statement of cash flows on the basis of the related insurance coverage. Accordingly, $8 million was related to inventory and was therefore classified in operating activities. The balance of $2 million was related to losses sustained on our property and equipment and was classified in investing activities. We are continuing to work with our insurers to determine the remaining amount of our covered losses under our property insurance policies. Additional insurance recoveries will be recorded in the period in which we conclude our settlement discussions with our insurance providers.





                                            First Quarter 2021 Form 10-Q Page 25

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Investing Activities


                                              Thirteen weeks ended
                                             May 1,          May 2,
($ in millions)                               2021            2020

Net cash (used in) investing activities $ (54) $ (58) $ Change

$        4

For the thirteen weeks ended May 1, 2021, capital expenditures decreased by $1 million to $51 million, as compared with the corresponding prior-year period. Our full-year capital spending is expected to be $275 million. The revised forecast includes $180 million related to the remodeling or relocation of approximately 120 existing stores and the opening of approximately 160 new stores, as well as $95 million for the development of information systems, websites, and infrastructure, including supply chain initiatives. The capital expenditures forecast includes the anticipated costs related to the conversion of the Footaction stores to our other banners, although the timing of these expenditures is being evaluated. Cash used in investing activities for the first quarter included $8 million in minority investments as compared with $6 million spent in the corresponding prior-year period.

In connection with the shutdown of the Runners Point banner completed last year, during the first quarter of 2021 we sold the former headquarters resulting in proceeds of $3 million.

As noted above, related to our insurance claim from the social unrest in 2020, we recorded proceeds of $2 million related to property and equipment loss.



Financing Activities


                                                         Thirteen weeks ended
                                                          May 1,         May 2,
($ in millions)                                            2021           2020

Net cash (used in) provided by financing activities $ (61) $ 288 $ Change

$      (349)


Cash used in financing activities consisted primarily of our return to
shareholders initiatives, including our share repurchase program and cash
dividends, as follows:




                                    Thirteen weeks ended
                                   May 1,          May 2,
($ in millions)                     2021            2020
Share repurchases                 $      34       $       -
Dividends paid on common stock           21              42

Total returned to shareholders $ 55 $ 42

During the thirteen weeks ended May 1, 2021, we repurchased 620,544 shares of common stock for $34 million under our share repurchase program. We also declared and paid dividends representing quarterly rates of $0.20 and $0.40 per share for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.

We paid $10 million to satisfy tax withholding obligations relating to the vesting of share-based equity awards during the thirteen weeks ended May 1, 2021. Partially offsetting this amount were proceeds received from the issuance of common stock in connection with employee stock programs of $4 million.

In the first quarter of 2020, we borrowed $330 million of our then-existing revolving credit facility, which was repaid in full during the second quarter of 2020.





                                            First Quarter 2021 Form 10-Q Page 26

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Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in the Annual Report on Form 10-K for the fiscal year ended January 30, 2021.

Recent Accounting Pronouncements

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

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