Company Quick10K Filing
Foot Locker
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 112 $4,537
10-Q 2019-12-11 Quarter: 2019-11-02
10-Q 2019-09-11 Quarter: 2019-08-03
10-Q 2019-06-12 Quarter: 2019-05-04
10-K 2019-04-02 Annual: 2019-02-02
10-Q 2018-12-11 Quarter: 2018-11-03
10-Q 2018-09-12 Quarter: 2018-08-04
10-Q 2018-06-06 Quarter: 2018-05-05
10-K 2018-03-29 Annual: 2018-02-03
10-Q 2017-12-06 Quarter: 2017-10-28
10-Q 2017-09-06 Quarter: 2017-07-29
10-Q 2017-06-06 Quarter: 2017-04-29
10-K 2017-03-23 Annual: 2017-01-28
10-Q 2016-12-07 Quarter: 2016-10-29
10-Q 2016-09-07 Quarter: 2016-07-30
10-Q 2016-06-08 Quarter: 2016-04-30
10-K 2016-03-24 Annual: 2016-01-30
10-Q 2015-12-09 Quarter: 2015-10-31
10-Q 2015-09-09 Quarter: 2015-08-01
10-Q 2015-06-11 Quarter: 2015-05-02
10-K 2015-03-30 Annual: 2015-01-31
10-Q 2014-12-10 Quarter: 2014-11-01
10-Q 2014-09-10 Quarter: 2014-08-02
10-Q 2014-06-11 Quarter: 2014-05-03
10-K 2014-03-31 Annual: 2014-02-01
10-Q 2013-09-11 Quarter: 2013-08-03
10-Q 2013-06-12 Quarter: 2013-05-04
10-K 2013-04-01 Annual: 2013-02-02
10-Q 2012-12-05 Quarter: 2012-10-27
10-Q 2012-09-05 Quarter: 2012-07-28
10-Q 2012-06-06 Quarter: 2012-04-28
10-K 2012-03-26 Annual: 2012-01-28
10-Q 2011-12-07 Quarter: 2011-10-29
10-Q 2011-09-07 Quarter: 2011-07-30
10-Q 2011-06-08 Quarter: 2011-04-30
10-K 2011-03-28 Annual: 2011-01-29
10-Q 2010-12-08 Quarter: 2010-10-30
10-Q 2010-09-08 Quarter: 2010-07-31
10-Q 2010-06-09 Quarter: 2010-05-01
10-K 2010-03-29 Annual: 2010-01-30
8-K 2019-11-22 Earnings, Exhibits
8-K 2019-08-23 Earnings, Exhibits
8-K 2019-05-24 Earnings, Exhibits
8-K 2019-05-22 Officers, Shareholder Vote, Exhibits
8-K 2019-03-28 Regulation FD, Exhibits
8-K 2019-03-27 Officers
8-K 2019-03-01 Earnings, Exhibits
8-K 2019-02-07 Other Events, Exhibits
8-K 2019-02-05 Officers, Exhibits
8-K 2018-11-20 Earnings, Exhibits
8-K 2018-08-24 Earnings, Exhibits
8-K 2018-05-25 Earnings, Exhibits
8-K 2018-05-23 Shareholder Vote
8-K 2018-04-12 Officers, Exhibits
8-K 2018-03-28 Officers, Exhibits
8-K 2018-03-02 Earnings, Exhibits
8-K 2018-02-20 Amend Bylaw, Exhibits
FL 2019-11-02
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-15 fl-20191102xex15.htm
EX-31.1 fl-20191102ex3116ba6f7.htm
EX-31.2 fl-20191102ex312c9af75.htm
EX-32 fl-20191102xex32.htm
EX-99 fl-20191102xex99.htm

Foot Locker Earnings 2019-11-02

FL 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
GPS 6,817 14,043 10,418 16,423 6,168 937 1,941 6,871 38% 3.5 7%
HBI 6,086 7,877 6,742 6,966 2,713 566 659 9,855 39% 15.0 7%
JWN 5,425 9,935 9,176 15,546 1,540 493 1,411 6,647 10% 4.7 5%
LB 5,246 10,618 11,551 13,158 4,813 575 1,208 9,868 37% 8.2 5%
FL 4,537 6,720 4,208 7,984 2,546 520 841 3,699 32% 4.4 8%
AEO 3,111 3,359 2,131 4,175 1,538 267 536 2,794 37% 5.2 8%
URBN 2,740 3,138 1,777 3,929 1,295 257 464 2,578 33% 5.6 8%
DSW 1,731 2,557 1,828 3,461 715 52 174 1,914 21% 11.0 2%
PLCE 1,497 1,304 1,054 1,886 659 68 147 1,432 35% 9.8 5%
ANF 1,065 3,407 2,404 3,592 2,153 75 290 795 60% 2.7 2%

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Table of Contents

s

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:  November 2, 2019

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

Graphic

(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)

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

FL

New York Stock Exchange

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 þ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes þ 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 þ

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 þ

Number of shares of Common Stock outstanding as of December 6, 2019: 104,565,333

Table of Contents

FOOT LOCKER, INC.

TABLE OF CONTENTS

Page

PART I

FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

Condensed Consolidated Statements of Comprehensive Income

3

Condensed Consolidated Statements of Changes in Shareholders’ Equity

4

Condensed Consolidated Statements of Cash Flows

5

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 4.

Controls and Procedures

31

PART II

OTHER INFORMATION

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 6.

Exhibits

33

SIGNATURE

34

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

November 2,

November 3,

February 2,

    

2019

    

2018

    

2019

(Unaudited)

(Unaudited)

*

 

 ($ in millions)

ASSETS

 

  

 

  

 

  

Current assets:

 

  

 

  

 

  

Cash and cash equivalents

$

744

$

748

$

891

Merchandise inventories

 

1,304

 

1,305

 

1,269

Other current assets

 

299

 

325

 

358

 

2,347

 

2,378

 

2,518

Property and equipment, net

 

814

 

824

 

836

Operating lease right-of-use assets

2,956

Deferred taxes

 

93

 

107

 

87

Goodwill

 

156

 

157

 

157

Other intangible assets, net

 

21

 

39

 

24

Other assets

 

234

 

175

 

198

$

6,621

$

3,680

$

3,820

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

 

  

Current liabilities:

 

  

 

  

 

  

Accounts payable

$

396

$

383

$

387

Accrued and other liabilities

 

333

 

312

 

377

Current portion of lease obligations

508

 

1,237

 

695

 

764

Long-term debt

 

122

 

124

 

124

Long-term lease obligations

2,719

Other liabilities

 

116

 

410

 

426

Total liabilities

 

4,194

 

1,229

 

1,314

Shareholders’ equity:

Common stock and paid-in capital: 113,204,118; 121,500,846; and 112,932,605 shares outstanding, respectively

832

864

809

Retained earnings

2,310

2,323

2,104

Accumulated other comprehensive loss

(382)

(361)

(370)

Less: Treasury stock at cost: 8,139,520; 8,109,644; and 711,024 shares, respectively

(333)

(375)

(37)

Total shareholders' equity

2,427

2,451

2,506

$

6,621

$

3,680

$

3,820

*

The balance sheet at February 2, 2019 has been derived from the previously reported audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Foot Locker, Inc.’s Annual Report on Form 10-K for the year ended February 2, 2019.

See Accompanying Notes to Condensed Consolidated Financial Statements.

1

Table of Contents

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Thirteen weeks ended

Thirty-nine weeks ended

November 2,

November 3,

November 2,

November 3,

    

2019

    

2018

    

2019

    

2018

 

($ in millions, except per share amounts)

Sales

$

1,932

$

1,860

$

5,784

$

5,667

Cost of sales

 

1,312

 

1,272

 

3,941

 

3,874

Selling, general and administrative expenses

 

411

 

398

 

1,220

 

1,163

Depreciation and amortization

 

44

 

44

 

134

 

133

Litigation and other charges

 

1

 

2

 

16

 

17

Income from operations

 

164

 

144

 

473

 

480

Interest income, net

 

3

 

2

 

9

 

5

Other income

 

4

 

 

8

 

5

Income before income taxes

 

171

 

146

 

490

 

490

Income tax expense

 

46

 

16

 

133

 

107

Net income

$

125

$

130

$

357

$

383

Basic earnings per share

$

1.16

$

1.14

$

3.24

$

3.29

Weighted-average shares outstanding

 

106.9

 

114.5

 

110.0

 

116.6

Diluted earnings per share

$

1.16

$

1.14

$

3.23

$

3.28

Weighted-average shares outstanding, assuming dilution

 

107.2

 

115.0

 

110.5

 

117.1

See Accompanying Notes to Condensed Consolidated Financial Statements.

2

Table of Contents

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Thirteen weeks ended

Thirty-nine weeks ended

November 2,

November 3,

November 2,

November 3,

    

2019

    

2018

    

2019

    

2018

 

($ in millions)

Net income

$

125

$

130

$

357

$

383

Other comprehensive income, net of income tax

 

  

 

  

 

 

  

Foreign currency translation adjustment:

 

  

 

  

 

 

  

Translation adjustment arising during the period, net of income tax (benefit) of $2, $(2), $1, and $(9) million, respectively

 

5

 

(23)

 

(16)

 

(81)

Cash flow hedges:

 

  

 

  

 

 

  

Change in fair value of derivatives, net of income tax

 

(5)

 

 

(2)

 

1

Pension and postretirement adjustments:

 

  

 

 

 

Amortization of net actuarial gain/loss and prior service cost included in net periodic benefit costs, net of income tax expense of $1, $1, $2, and $2 million, respectively

 

2

 

2

 

6

 

6

Pension remeasurement and foreign currency fluctuations arising during the year, net of income tax benefit of $-, $-, $-, and $3, respectively.

 

 

 

 

(8)

Comprehensive income

$

127

$

109

$

345

$

301

See Accompanying Notes to Condensed Consolidated Financial Statements.

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Table of Contents

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

    

Additional Paid-In

    

    

    

    

Accumulated

    

Capital &

Other

Total

Thirteen weeks ended

Common Stock

Treasury Stock

Retained

Comprehensive

Shareholders'

(shares in thousands, amounts in millions)

Shares

Amount

Shares

Amount

Earnings

Loss

Equity

Balance at August 3, 2019

 

113,200

$

825

 

(3,579)

$

(155)

$

2,226

$

(384)

$

2,512

Issued under director and stock plans

 

4

1

1

Share-based compensation expense

 

6

6

Share repurchases

 

(4,561)

(178)

(178)

Net income

 

125

125

Cash dividends declared on common stock ($0.38 per share)

 

(41)

(41)

Translation adjustment, net of tax

 

5

5

Change in cash flow hedges, net of tax

 

(5)

(5)

Pension and postretirement adjustments, net of tax

 

2

2

Balance at November 2, 2019

 

113,204

$

832

 

(8,140)

$

(333)

$

2,310

$

(382)

$

2,427

Balance at August 4, 2018

 

121,497

$

857

 

(5,869)

$

(267)

$

2,232

$

(340)

$

2,482

Restricted stock issued

 

3

Share-based compensation expense

 

7

7

Shares of common stock used to satisfy tax withholding obligations

 

(4)

Share repurchases

 

(2,237)

(108)

(108)

Reissued ­- Employee Stock Purchase Plan

 

Net income

 

130

130

Cash dividends declared on common stock ($0.345 per share)

 

(39)

(39)

Translation adjustment, net of tax

 

(23)

(23)

Pension and postretirement adjustments, net of tax

 

2

2

Balance at November 3, 2018

 

121,500

$

864

 

(8,110)

$

(375)

$

2,323

$

(361)

$

2,451

    

Additional Paid-In

    

    

    

    

Accumulated

    

Capital &

Other

Total

Thirty-nine weeks ended

Common Stock

Treasury Stock

Retained

Comprehensive

Shareholders'

(shares in thousands, amounts in millions)

Shares

Amount

Shares

Amount

Earnings

Loss

Equity

Balance at February 2, 2019

112,933

809

(711)

(37)

2,104

(370)

2,506

Restricted stock issued

88

Issued under director and stock plans

183

4

4

Share-based compensation expense

19

19

Shares of common stock used to satisfy tax withholding obligations

(32)

(2)

(2)

Share repurchases

(7,493)

(300)

(300)

Reissued ­- Employee Stock Purchase Plan

96

6

6

Net income

357

357

Cash dividends declared on common stock

(125)

(125)

Translation adjustment, net of tax

(16)

(16)

Change in cash flow hedges, net of tax

(2)

(2)

Pension and postretirement adjustments, net of tax

6

6

Cumulative effect of the adoption of Topic 842

(26)

(26)

Balance at November 2, 2019

 

113,204

$

832

 

(8,140)

$

(333)

$

2,310

$

(382)

$

2,427

Balance at February 3, 2018

121,262

$

842

(1,433)

$

(63)

$

2,019

$

(279)

$

2,519

Restricted stock issued

92

Issued under director and stock plans

146

6

6

Share-based compensation expense

16

16

Shares of common stock used to satisfy tax withholding obligations

(36)

(1)

(1)

Share repurchases

(6,689)

(313)

(313)

Reissued ­- Employee Stock Purchase Plan

48

2

2

Net income

383

383

Cash dividends declared on common stock

(120)

(120)

Translation adjustment, net of tax

(81)

(81)

Change in cash flow hedges, net of tax

1

1

Pension and postretirement adjustments, net of tax

(2)

(2)

Cumulative effect of the adoption of ASU 2014-09

4

4

Cumulative effect of the adoption of ASU 2016-16

37

37

Balance at November 3, 2018

 

121,500

$

864

 

(8,110)

$

(375)

$

2,323

$

(361)

$

2,451

See Accompanying Notes to Condensed Consolidated Financial Statements.

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Table of Contents

FOOT LOCKER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Thirty-nine weeks ended

November 2,

November 3,

    

2019

    

2018

 

($ in millions)

From operating activities:

 

  

 

  

Net income

$

357

$

383

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

 

 

  

Depreciation and amortization

 

134

 

133

Non-cash gain

 

(4)

 

Share-based compensation expense

 

19

 

16

Qualified pension plan contributions

 

(55)

 

(128)

Change in assets and liabilities:

 

 

Merchandise inventories

 

(42)

 

(57)

Accounts payable

 

12

 

133

Accrued and other liabilities

 

(36)

 

Pension litigation accrual

 

 

17

Class counsel fees paid in connection with pension litigation

(97)

Other, net

 

12

 

22

Net cash provided by operating activities

 

397

 

422

From investing activities:

 

  

 

  

Capital expenditures

 

(126)

 

(153)

Minority investments

 

(48)

 

(6)

Insurance proceeds related to loss on property and equipment

 

 

2

Net cash used in investing activities

 

(174)

 

(157)

From financing activities:

 

  

 

  

Purchase of treasury shares

 

(300)

 

(313)

Dividends paid on common stock

 

(125)

 

(120)

Proceeds from exercise of stock options

 

5

 

4

Treasury stock reissued under employee stock plan

 

3

 

2

Shares of common stock repurchased to satisfy tax withholding obligations

 

(2)

 

(1)

Net cash used in financing activities

 

(419)

 

(428)

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

 

(6)

 

(32)

Net change in cash, cash equivalents, and restricted cash

 

(202)

 

(195)

Cash, cash equivalents, and restricted cash at beginning of year

 

981

 

1,031

Cash, cash equivalents, and restricted cash at end of period

$

779

$

836

Cash paid during the year:

 

  

 

  

Interest

$

5

$

5

Income taxes

$

163

$

169

See Accompanying Notes to Condensed Consolidated Financial Statements.

5

Table of Contents

FOOT LOCKER, INC.

NOTES TO THE 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 presented. As used in these Notes to Condensed Consolidated Financial Statements (Unaudited) the terms “Foot Locker,” “Company,” “we,” “our,” and “us” refer to Foot Locker, Inc. and its consolidated subsidiaries.

The preparation of financial statements in accordance with generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements (Unaudited) and these Notes and related disclosures. 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 Form 10-K for the year ended February 2, 2019, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 2, 2019.

Other than the changes to the Leases policies as a result of the recently adopted accounting standards discussed below, there were no significant changes to the policies disclosed in Note 1, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended February 2, 2019.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a lease liability and a right-of-use asset on a discounted basis, for substantially all leases, as well as additional disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted improvements, which provides an optional transition method of applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted.

The Company adopted Topic 842 on February 3, 2019 (the “effective date”) using the optional transition method, which applies Topic 842 at the beginning of the period in which it is adopted. Prior period amounts have not been adjusted in connection with the adoption of this standard. The Company elected the package of practical expedients under the new standard, which permits companies to not reassess lease classification, lease identification, or initial direct costs for existing or expired leases prior to the effective date. We have lease agreements with non-lease components that relate to the lease components. The Company elected the practical expedient to account for non-lease components and the lease components to which they relate, as a single lease component for all classes of underlying assets. Also, the Company elected to keep short-term leases with an initial term of twelve months or less off the balance sheet.

6

Table of Contents

FOOT LOCKER, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Upon adoption of this new standard, as of February 3, 2019, the Company recorded right-of-use assets and lease obligations on the Condensed Consolidated Balance Sheet for our operating leases of $3,148 million and $3,422 million, respectively. As part of adopting the standard, previously recognized liabilities for deferred rent and lease incentives were reclassified as a component of the right-of-use assets. Additionally upon adoption, we evaluated right-of-use assets for impairment and determined that approximately $29 million of impairment was required related to newly recognized right-of-use assets that would have been impaired in previous periods. This impairment of the right-of-use asset as of February 3, 2019 was recorded, net of related income tax effects, as a $26 million reduction of beginning retained earnings. The standard did not significantly affect our Condensed Consolidated Statements of Operations, Comprehensive Income, or Cash Flows.

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.

2. Revenue

Store revenue is recognized at the point of sale and includes merchandise, net of returns, and excludes taxes. Revenue from layaway sales is recognized when the customer receives the product, rather than when the initial deposit is paid. Revenue for merchandise that is shipped to our customers from our distribution centers and stores is recognized upon shipment.

Total revenue recognized includes shipping and handling fees. We have determined that control of the promised good is passed to the customer upon shipment, since the customer has legal title, the rewards of ownership, and has paid for the merchandise as of the shipment date. Shipping and handling is accounted for as a fulfillment activity. The Company accrues the cost and recognizes revenue for these activities upon shipment.

Sales disaggregated based upon sales channel is presented below.

Thirteen weeks ended

Thirty-nine weeks ended

November 2,

November 3,

November 2,

November 3,

    

2019

    

2018

    

2019

    

2018

($ in millions)

Sales by Channel

Stores

$

1,636

$

1,591

$

4,915

$

4,876

Direct-to-customers

 

296

 

269

 

869

 

791

Total sales

$

1,932

$

1,860

$

5,784

$

5,667

Sales disaggregated based upon geographic area is presented in the table below. Sales are attributable to the geographic area in which the sales transaction is fulfilled.

Thirteen weeks ended

Thirty-nine weeks ended

November 2,

November 3,

November 2,

November 3,

    

2019

    

2018