Good morning, ladies and gentlemen, and welcome to Foot Locker's fourth quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. This conference may contain forward-looking statements that reflect management's current views of future events and financial performance. Management undertakes no obligation to update these forward-looking statements, which are based on many assumptions and factors, including the impact of COVID-19, effects of currency fluctuations, customer preferences, economic and market conditions worldwide, and other risks and uncertainties described more fully in the company's press release and reports filed with the SEC, including the most recently filed Form 10-K or Form 10-Q. Any changes in such assumptions or factors could produce significantly different results, and actual results may differ materially from those contained in the forward-looking statement. Please note this conference is being recorded. I would now like to turn the call over to Robert Higginbotham, Vice President of Investor Relations. Mr. Higginbotham, you may begin. Thank you, operator. Welcome everyone to Foot Locker, Inc.'s fourth quarter earnings call. As described in today's earnings release, we reported fourth quarter net income of $103 million, inclusive of the recent purchase of both WSS and atmos, compared to net income of $123 million in the fourth quarter of the prior year. On a per share basis, fourth quarter earnings were $1.02, compared with $1.17 the prior year. During the fourth quarter of 2021, the company recorded $72 million of pre-tax adjustments to earnings, primarily including store impairments, store closing costs, the write down of minority investments and acquisition related expenses. On a non-GAAP basis, earnings per share were $1.67, including a $0.20 gain in our Retailors Ltd investment, compared to $1.55 for the fourth quarter of 2020. Unless otherwise noted, the figures and rates mentioned during our call today will be based on non-GAAP results. A reconciliation of GAAP to non-GAAP results is included in this morning's earnings release. Additionally, we have a slide presentation posted on our investor relations website with highlights on the quarter, including some sales details typically cited on our earnings call. We'll begin our prepared remarks with Dick Johnson, Chairman and Chief Executive Officer. Andrew Page, Executive Vice President and Chief Financial Officer, will then review our fourth quarter results and financial position in more detail and provide color on the 2022 guidance we issued in our press release this morning. Following our prepared remarks, Dick and Andrew will respond to your questions. With that, I'll now turn it over to Dick. Thank you, Rob. Good morning, everyone, and thank you for joining us. This morning, we will review our fourth quarter and full year results, including the progress we've made against our key strategic objectives, as well as talk to some changes in our business and the strategies we are accelerating that are well underway. We closed out a record year by delivering solid fourth quarter results that reflect the ongoing momentum we have built in our business. Our total sales grew by 6.9% this quarter and almost 19% in 2021 to approximately $9 billion, the highest in Foot Locker's history. We remain committed to our purpose to inspire and empower youth culture and further our connection to the sport and sneaker communities. Throughout 2021, we made great strides to do just that by diversifying our product mix across brands and categories. We also extended our distribution across channels and banners by enhancing our omnichannel offerings. We broadened our customer base through acquisitions of scalable new banners to strengthen our portfolio of retail brands. Starting with product, we know that our consumer demands choice across a variety of brands and categories, so we continue to work to broaden our selection, including leaning into brands where we are under-penetrated, a bigger focus on apparel, and the introduction of new third-party brands, as well as our own private labels. In the fourth quarter, we saw great vendor diversity with the majority of our top 20 vendors posting gains and driving excitement in their respective categories. Not only were we excited by the amount of brands that showed improvement resulting in non-Nike comp growth of greater than 30%, we also remain encouraged by the size of the business we are building with our major partners, which has grown consistently over the years. The momentum of brands like Adidas, PUMA, New Balance, Timberland, UGG, and Crocs during 2021 showcased the expanding breadth of our consumer sneaker closet covering athletic, outdoor, and seasonal. Also, our push into apparel continues to yield strong results, with the category growing 30% in the fourth quarter and reaching $1.4 billion in annual sales for the first time in the company's history. Within our controlled brand strategy, following up on our successful menswear launch of Locker in the third quarter, in December, we launched Cozi, our newest womenswear private brand, which is off to a great start. In addition to our owned labels, we continue to develop exclusive partnerships to create energy and connect with new consumers. We launched All City by Just Don, an exclusive lifestyle basketball brand that is inspired by the spirit of community that has immediately resonated with the next generation of streetwear enthusiasts. We continue to have curated drops by Melody Ehsani, our Creative Director of our Women's Business, as we expand our offerings and make streetwear more accessible to younger female consumers. In omni-channel, we continue to enhance our consumer experience with new features like payment options and launch capabilities. Outside the U.S., we hit significant milestones in transitioning to our new e-commerce platform, completing the rollout across Foot Locker Europe. We also continue to expand our drop ship program, where we added more vendors during the fourth quarter to expand our assortment and availability online. Our integrated FLX reward program continues to build momentum. In Europe, we continue to roll out the program across the region, adding Italy, Spain, and Germany in Q4, with five more countries planned for 2022. Overall, on an annual basis, we saw over 50% growth in active members. The difference between member and non-member spend has increased year over year, and the sales capture rate increased from 50% last year to nearly 70% this year. On the M&A front, we added two tremendous brands and high growth companies, WSS and atmos, to the Foot Locker family. These strategic acquisitions expand our customer base and geographic reach, strengthen our store footprint, and further diversify our product mix across consumers and price points. WSS gives us a strong off-mall presence in fast-growing markets with a full family offering and a special connection to the Hispanic community. While atmos provides us with a foothold in Japan and a key launching point into the rest of Asia. While not yet in the company's overall consolidated comp base, both businesses comped up double digits in the fourth quarter. Looking ahead, our customer-centric framework demands that we adapt and mold the business to where the customer is headed. Gen Z in particular craves uniqueness to project their individualism, which we are well equipped to serve with our multi-brand model. While we seek to provide more variety, our largest vendor is accelerating its DTC strategy. We expect their concentration to decline meaningfully in the fourth quarter this year to a level that will continue into 2023. We continue to have a strong relationship with Nike, and they remain an important partner for our business, especially in basketball, kids, and sneaker culture, where we have an unrivaled connection with our consumers. As we remix our business, 2022 will reflect an acceleration of pre-existing strategies that are well underway and have already been yielding success. On the product front, we will continue to work to further diversify our merchandise and vendor mix, including new brands and elevating brands and categories where we are under-penetrated. We continue to strengthen our consumer concept offense to deliver exclusive product storytelling driven by our extensive consumer insights. These will include big global programs from Adidas 3 Stripe Life and the Trefoil State of Mind, exciting storytelling with New Balance around our 574 Life concept, and exciting third-party partnerships with the likes of Pokémon and PUMA and Carrots and Crocs, among others. We will build on our basketball leadership position with the continuation of our exclusive LaMelo Ball program with PUMA, our new exclusive partnership with Reebok featuring the iconic Iverson and Shaq franchises, and our Nike exclusive basketball concepts in Got Next, Legacy, and the Tunnel Walk. We will also be continuing to grow our exclusive control brands to enrich and add dimension to our apparel offering to connect with consumers and add uniqueness to our assortments. Another area is our shift to bigger box off-mall formats and our rollout of key growth banners, both of which we are accelerating in 2022. Based on the success of our first 50 global community and power stores, we will be growing these formats to approximately 300 locations over the next three years. Our community and power stores enhance both our off-mall presence as well as our connection with communities by bringing life to a wider and richer, more locally relevant product assortment. These stores help us build authentic relationships with our customer at the hyperlocal level by incorporating local elements into the physical designs, partnering with local businesses and organizations, and engaging local artists, athletes, and influencers. Product from local designers is given special activation, and stores are staffed with local personnel to deepen the ties to the community. Additionally, WSS is now expected to reach $1 billion in sales by 2024, supported by accelerated store openings and strong same-store sales growth. The company also expects to grow atmos by approximately 50% to nearly $300 million over the next three years by scaling in existing markets and expanding internationally. We are excited to soon be opening our first home field store in South Florida. Our new off-mall large format concept store provides a one-stop shop across sport lifestyle, sport performance, and nutrition and wellness, including rich interactive experiences with energy stations, a focus on wellness, dedicated training zones, coaching clinics, training sessions, and more. We have four pilot stores planned for this year and believe this presents another exciting opportunity to further diversify our consumer base and product assortments. We will also be accelerating our omni-channel evolution efforts. As part of our investment in GOAT Group, the companies are in active discussions to create programs aimed at enhancing the value proposition and consumer experience of both platforms, including creating a more intentional connection between the two companies, prioritizing loyalty and membership benefits. While details are still coming together, we are incredibly excited to be working with our partners at GOAT on finding the best ways the two platforms can create value together. We will keep you updated on our progress. Separately, the company will be accelerating its rollout of drop ship across vendors, banners and regions through 2022, which allows us to add to our assortment and availability, effectively creating an endless aisle for the consumer while not increasing our working capital needs. As part of our efforts to drive productivity, another of our key strategic imperatives, we are announcing a new cost savings program. This new cost savings initiative is expected to generate savings of approximately $200 million on an annualized basis, is designed to better align the company's cost structure to its needs to remain nimble and able to invest appropriately as the consumer landscape evolves. Andrew will provide more detail on this program in a moment. As we look forward beyond 2022, we are confident that the remixing of our business aligns us well with the consumer's desire for a variety of both product and experiences. Our strengths remain our unique affinity with our customers across our portfolio of retail brands and our growing ability for them to engage with us in multiple ways. Our balance sheet remains strong, and we have made tremendous progress in reducing our mall exposure as we shift stores off mall, which Andrew will detail in a moment. Foot Locker is one of the truly iconic retail brands in the industry, with a special place in the market as a destination for great selection and product discovery. We will meet our customers where they need us and want us to be with the multi-brand omni-channel experience that is more relevant than ever as we continue to foster connectivity with the communities that we serve. Finally, before I turn the call over to Andrew, I want to extend a heartfelt thanks to our entire team who did a great job throughout the quarter in a record year. Their commitment and great effort made our tremendous results possible. I'd also like to welcome Rob Higginbotham to Foot Locker as our new vice president of investor relations. Rob joined us last month and looks forward to getting to know all of you. We thank Jim Lance for leading our IR effort over the past several years, and Jim remains an integral part of our finance team. Let me now pass the call over to Andrew. Thank you, Dick, and good morning, everyone. Our fourth quarter results demonstrate our progress in rebalancing our business across brands and categories, as well as investing in new banners and formats that increase our reach and connection with our customers. Our fourth quarter comparable sales across channels grew 0.8%, with total sales up 6.9% and up 8.2% excluding the impact of foreign currency. As a reminder, our recently completed fourth quarter was the first full quarter for both WSS and atmos, which contributed $139 million and $49 million respectively to sales in the quarter. After starting the quarter strong with November comps up high teens, December slowed significantly with comps down high single digits. In addition to consumers shopping earlier and pulling some December activity into November, our December receipts slowed as a result of supply chain disruptions and certain launches were shifted out of December into the spring. December shopping patterns were further complicated with the ramp up of the Omicron variant. January comps improved to essentially flat as receipts remained a drag but picked up through the month, resulting in inventories ending the quarter in a strong position, up 37% over last year. For the quarter, our global fleet was open 97% of available days versus 87% last year. Comparable sales in our stores grew 8.8% with store traffic up approximately 25% while conversion was down high teens. Digital penetration was 21.6% compared to 27.4% in 2020 and 18.7% in 2019. Units increased high single digits while average selling prices fell by high single digits. Ongoing improvements in full price selling was offset by a higher mix of apparel in 2021. Turning to our results by geography and banner. North American comps overall were down 4.5% with an accelerated drag from the wind down of Footaction. Foot Locker Canada led the way up low double digits with Foot Locker US up low single digits. Kids Foot Locker and Champs were down low single digits. In EMEA, overall comps grew high teens as operating days improved to 93% versus 63% last year. In APAC, comps were up over 20% with strong performance in both Pacific and Asia regions. While doors were mostly reopened during the quarter, travel restrictions in Asia continued to impact the recovery in this region. Moving down the income statement, gross margin declined 10 basis points. Occupancy delevered 110 basis points as a result of lapping elevated rent abatements in the prior year. This deleverage was offset by 100 basis points improvements in merchandise margin driven by the still favorable promotional backdrop. Excluding rent abatements, occupancy was relatively flat and our gross margins were up year over year and versus 2019. For the fourth quarter, our SG&A rate came in at 22.4%, representing deleverage of approximately 140 basis points. The deleverage was driven by higher labor costs, marketing and technology spends. Depreciation expense was $55 million versus $44 million last year, driven mainly by the inclusion of WSS and atmos. Interest expense increased to $6 million from $2 million in the prior year due to the incremental expense from the company's new bond issuance. Within other income, we recorded a benefit related to the mark to market of our investment in Retailors Ltd, our partner in the joint venture that manages our Foot Locker stores in select Eastern and Central European markets, as well as our franchise partner in Israel. Moving to our tax rate. Our non-GAAP tax rate came in at 24.2% compared to last year's rate of 25.4%. Now, turning to our balance sheet. We ended the quarter with $804 million of cash. With receipts picking up through the quarter, we ended the year with inventory up 37% versus 2020 and up approximately 5% versus 2019, putting us in a strong position to meet demand heading into 2022. During the quarter, we repurchased 4 million shares of our common stock for $178 million and paid $29 million in dividends. Turning to our 2022 financial outlook, which we laid out in our press release earlier this morning. Our guidance includes a meaningful vendor mix shift. Beginning in the fourth quarter of 2022 and going forward, we do not expect any one vendor to comprise more than 55% of our product spend. By comparison, this is down from approximately 65% in the fourth quarter of 2021. This change reflects Nike's accelerated strategic shift to DTC and Foot Locker's ongoing brand and category diversification efforts. For the full year of 2022, this would equate to approximately 60% Nike concentration, down from 70% for 2021 and 75% for 2020. Though we typically don't provide vendor concentration on a quarterly basis, we wanna give as much transparency as possible to put our 2022 outlook in context. We are also lapping the benefit of stimulus from last year that will put pressure on our results in 2022. As such, we are guiding total sales decline of 4%-6% with comparable sales down 8%-10%. We plan to open approximately 100 new stores in 2022, including 40 community and power stores, 27 WSS stores, and nine atmos stores while closing a total of 190 stores. Our store count will be down approximately 3% in 2022 with square footage down less than 2%. Taking a look at gross margin. We do not expect the favorable promotional environment and historically low markdowns that persisted in 2021 to continue into 2022. Combined with occupancy deleverage and higher supply chain costs, we expect 2022 gross margins to decline by 410-430 basis points. When compared to a more normalized 2019, we expect gross margins to decline 150-170 basis points as increased supply chain costs more than offset improvements in product costs. SG&A for the full year is expected to leverage 30-50 basis points, which includes a partial year benefit from the company's cost optimization plan, which we announced in our press release. With input from our outside partners, this program is expected to reduce overall costs and enable the company to move with more agility in the execution of our strategic imperatives. We are in the early phase of the plan and will provide more details on our first quarter earnings call. We expect our non-GAAP EPS range for 2022 to be $4.25-$4.60, which is comparable to our 2019 earnings per share of $4.93. As we enter 2022, our balance sheet remains a strategic asset for our business, opening the year with over $800 million in cash, $600 million undrawn on our credit line, and strong coverage and leverage metrics. Looking forward, our cash flow remains robust and our capital allocation priorities remain the same. Invest in the growth of our business and return cash to our shareholders through our periodic dividend payments and opportunistic share repurchase program. Yesterday, our board approved a $0.40 per share quarterly dividend and a new share repurchase authorization of $1.2 billion. Our CapEx plan for 2022 is $275 million, which includes our new store openings, our ongoing technology and omni-channel investments, as well as a new distribution center in Reno, Nevada, and a new WSS facility in Houston, Texas, to support growth in that banner. In addition, our real estate portfolio provides us with a tremendous amount of flexibility as we move forward. Over the past several years, we have increased our off-mall mix in North America to 21%, up from 14% in 2018. We expect that that mix will continue to move up as we open up power and community stores, as well as the potential ramp of Home field stores. At the same time, we have reduced our overall lease life in North America to approximately three years, down from four years in 2018. These relatively short-term leases have allowed us, and will continue to allow us, flexibility to optimize our real estate decisions in a cost-effective manner. In closing, we are continuing our journey in diversifying our business. With our fourth quarter and full year 2021 results as proof points of our progress, we are confident that our customers and product diversification efforts will continue to drive differentiation and connection with our customers and scale with our vendors. Our team is focused, and we look forward to sharing our progress throughout this year. With that, operator, please open the call for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you would like to register your question, please press star, then the number one on your telephone keypad. If your question has been answered or you would like to remove yourself from the queue, please press star then two. If you're using a speakerphone, please lift your handset to allow optimal sound quality. Also, we do ask that you limit yourself to one question with one follow-up. We will now take a moment to assemble our roster. Our first question comes from Jonathan Komp with Robert W. Baird. You may now go ahead. Yeah. Hi. Thank you. Good morning. I just wanna understand a little bit better the changes to the vendor mix that you highlighted, and maybe just thinking through the major changes you've seen in that relationship, if any, specifically with Nike and, you know, the significance of the fourth quarter of 2022, why you're calling that out as sort of the shift in mix that you expect? Going forward, when you think about, I think you disclosed the total penetration for your top five, how should we think about, you know, the next vendors within the top five that aren't Nike, how you expect that, the mix of those vendors to change? Thank you. Sure. Thanks for the question, Jonathan. Again, as we reflect back on 2021, there was an awful lot of focus with us and our vendor partners around inventory management, prioritization of key products, and editing of SKU lines. As we continue to battle through the pandemic, there was a heavy concentration in a very few SKUs, and that clearly allowed us to be successful in 2020 and 2021. As we went through our normal planning process with all of our vendors, which we do in November, December, January, as we set up the next fiscal year for us, it became clear that allocations as we got to the back half of the year were changing. Again, as we talked about in our prepared remarks, you know, some of that is, you know, the Nike move to DTC that they've talked about and, you know, again, I believe has been able to accelerate during COVID. Some of it is truly, you know, our p art of our ongoing journey to create the true house of brands that we are. We've got very high in our concentration, and many of you have called it out. As we shifted, and I think that Q3 and Q4 were great proof points for us, that we saw great growth outside of the, you know, our Nike and Jordan business. The next group of vendors, most of our top 20 vendors all had strong double-digit growth, and we were able to drive the business. Again, as we look forward to, you know, Q4 is really in the planning process where we saw the first impact that we mentioned. And we wanna be as transparent as we can with you all. Again, t his is certainly part of accelerating our product assortment and vendor assortment changes that I believe Q4 was a great proof point in how successful we've been so far. If I could just follow up. The comps guidance for the year of down 8%-10%, could you maybe disaggregate how much of that outlook reflects expectations that you know the private label initiatives and the other brands won't make up for the lost Nike product? How much of it is sort of the general assumptions you're making for the environment and cycling stimulus and everything else that's not related to the vendor change? Thank you. You know, it's a combination, Jonathan. We haven't parsed it out for public consumption, but it is a piece of all of those. We've got certainly inflation that we're all seeing. We've got the stimulus that won't be repeated in 2022. There's still a fair amount of supply chain disruption when you think about between 60 and 70 vessels still anchored off Long Beach and L.A. trying to get in. Again, it's a combination of all of those things that you called out. We have a high degree of confidence that our private brands, our shift to apparel, our bigger pivot off mall. Again, one of the reasons that we pivot off mall is so that we can re-create more space for these great stories that our teams tell. You know, ultimately, those bigger spaces connected with our omni-channel and digital efforts create a stronger demand creation opportunity for us, which again, I think the down comps is reflective of all of those elements that you called out, Jonathan. Okay. Understood. Best of luck. Thank you. Thanks, Jonathan. Our next question comes from Paul Kearney with Barclays. You may now go ahead. Hi. Thanks for taking the question. Just a quick one. What is embedded in the sales and EPS contribution from WSS and atmos to your FY 2022 guide? Yeah. If you recall, when you know, we initially had forecasted approximately $0.40-$0.48 contribution from those that has scaled up, and that number that's embedded in there is approximately $0.65-$0.75. Okay. Great. Thanks. Just a quick follow-up. Can you just provide some commentary of what you're seeing on consumer if we see weakening demand in cost inflation kind of rolls through and price increases that you're seeing just throughout your merchandise? What do you kind of expect the consumer reaction to be, and what has it been historically? Thanks. Well, our consumer's been very, you know, has been able to fend off some of these inflationary trends, it seems like. Again, as the marketplace opens more and they get more active, you know, we'll see what happens. Clearly, traffic was up significantly in the fourth quarter. You know, the consumer has shown a tremendous amount of resiliency. You know, as it relates to our specific category, we all wait for the tax return money to start flowing in Q1. Again, I think that there's a lot of upside with our consumer. They have not been hesitant to shop the stores and shop our digital sites. It depends on how long and how rampant the inflation gets. Again, clearly with some of the geopolitical things going on, there's a wait and see is what the impact that that will be to the broader global market. Again, the consumer's been very resilient. Thank you. Best of luck. Thanks, Paul. Our next question comes from Tom Nikic with Wedbush Securities. You may now go ahead. Hey, good morning, guys. Thanks for taking my question. From a modeling perspective, when we think about, you know, this year, should we assume that the worst quarters from a comp perspective should be Q2 when you're lapping stimulus and Q4 when the vendor change really happens? Should we assume that comps are negative in all four quarters of the year? Well, I think your assumption around Q2 and Q4 is correct, Tom. You know, again, I think stimulus is gonna, you know, play a little havoc with everybody in the marketplace. Certainly we expect some pressure there. Then obviously, the pressure that we talked about with the allocation changes in Q4 will play into that. You know, Q1 and Q3, you know, flattish to down slightly, I think is the way that our model is built. Again, a lot of it's dependent on the flow of tax return money. A lot of it's dependent on, you know, the resiliency that I just talked about in the customer that stayed strong so far. Go ahead, Andrew. No, I agree. Flattish in Q1 to Q3, pressure from stimulus and the allocation shift in Q2 and Q4. Understood. As we look out to FY 2023, I mean, I know we're a long way from there, but if the vendor mix change is happening or if it's really happening to a great extent in Q4, that would suggest there would also be some wraparound into 2023 as well. Am I thinking about that correctly? Yeah. As we said in our prepared remarks, you know, we see the levels in Q4 wrapping around. You know, again, that's with one specific vendor. We also expect that the growth that we've seen from our other initiatives around our other brand partners, our private label brands, our drive into apparel, and this off-mall pivot into bigger store base will be some of the offset there. Understood. Thanks, guys, and best of luck navigating these, you know, tricky times. Take care. Thanks. Our next question comes from Jay Sole with UBS. You may now go ahead. Great. Thank you so much. Just wanna ask about just some of the vendor changing that's happening. Could you elaborate a little bit on what type of products are gonna be on different allocation? Really specifically apparel versus footwear. Maybe just to start with that one. Thank you. Yeah. As I talked about during 2021 and 2022, Jay, there was a concentration into some very specific styles and the hype, you know, the heat from certain styles that Nike certainly drives through their DTC and that's where the allocation pressure will be. You know, we still have access to all of those products. We'll just see different quantities flowing our way. You know, part of the effort that we've had ongoing with Nike is to diversify our mix with them as well, because we got very concentrated in those silhouettes. You know, again, part of it was the thought of in 2020, the thought of survival and having to focus on the inventory management, the prioritization of those key products. As I said, it allowed us to be very successful in 2020 and 2021, but as we got farther into 2021, it became very clear that we needed to diversify, you know, our offering for our consumers. You know, that coincides with, you know, Nike's DTC growth. Again, it really is, you know, Jay, you've been around the business long enough. You know the key styles and where the heat comes. Again, we'll still have access. We'll just see fewer units in those SKUs. But we will in fact continue to diversify our business with Nike, and we'll continue to grow our other brand partners. Yeah, Jay, I can't overemphasize enough as what Dick pointed out is as we move through the pandemic. You know, you saw elevated excess in some of those styles, especially as it relates to early part of 2021. You know, getting back down to a more sustainable mix of product, even in those styles, is what a lot of this shift looks at. But there was elevated excess during the pandemic years of 2020 and 2021. Got it. Maybe just to follow up on that, I mean, 'cause you mentioned the word sustainable. I mean, can you put in context, you know, this change versus last year, you know, with some of the Footaction stores closing or, you know, a big percentage of the Footaction stores closing? Like, is this sort of now just the one change where now you're at a sustainable level with Nike going forward? Or, you know, do you feel like that maybe there should be some more tweaks and adjustments to the allocation going forward? You know, I separate those things, Jay, quite honestly, right? I mean, we looked at our marketplace with Footaction, Champs, and Foot Locker, and part of what had happened during the pandemic is that we had gotten even closer together with those three banners. You know, our decision to close Footaction was really driven by not having enough separation and not seeing that we could create enough separation with those three adult male banners fast enough. Given some of the flexibility that we had with leases, and Andrew called out, you know, that we continue to lower the length of our average leases, you know, we chose to close Footaction. Now we've got two really strong banners when you think about the Foot Lock... ...three strong banners in North America, Kids Foot Locker, Foot Locker, and Champs and Eastbay. We will continue to utilize our allocations at the geographic level to assort appropriately and grow our other brands as relevant. Again, Champs has always had a little bit of a broader product assortment because they've got more space for apparel in their traditional stores and more space for more branded footwear. Again, we feel good about the portfolio and the allocation discussion and the Footaction discussion are really two separate discussions, Jay. Got it. Okay. Thank you so much. Jay, just, you know, kind of going down to the allocation. When you think about, you know, vendor concentration and sustainable business models going forward, we talked about, you know, no single vendor going forward having more than a 55% penetration. That's, you know, kind of the direction that we're modeling our business around as we move forward right now. Okay. Understood. Thanks again. Our next question comes from Kimberly Greenberger with Morgan Stanley. You may now go ahead. Great. Thank you so much. Good morning. I wanted to ask, is Foot Locker still considered a strategic partner for Nike? Or has that classification changed over the last year? Secondarily, could you just talk about the productivity of the new brands that are coming in to fill the floor space that Nike is leaving behind? Thanks so much. Thanks for the question, Kimberly. You know, again, we continue to be a strong partner, a strategic partner of Nike's. You know, we are working on building complementary strategies to their DTC growth. You know, their support of us in specifically basketball kids and sneaker culture continues to be elevated. Again, I feel great about the relationship. You know, we have ongoing dialogues with them as we plan our business. You know, this has been something that's been in process for a while as we've continued to shift our business and focus on, you know, the things that we need to do for our company. Again, you know, strong relationship there. You know, again, part of the pull model that works in our industry is the scarcity model. Again, it's... You know, one of the things that Nike does the best is they control the flow of these high heat products into the marketplace, which keeps the demand high. Again, they will certainly benefit their DTC with some of that. We'll continue to benefit from that. Our biggest benefit will be broadening our assortment with them and bringing other brand partners in. Now, the second part of your question, Kimberly, around the productivity of that next tier of vendors, the product across the board doesn't turn quite as fast as the Nike product, you know. But that being said, we just had a great LaMelo Ball launch with Puma. You know, we bring in high heat collaborations, you know, Crocs and Carrots. You know, we do those things and drive heat and demand with those type of offerings, which again, turn pretty quick. I would say in general, a little bit less productive. You know, again, one of the hottest brands in our market right now certainly continues to be New Balance, and that's in all of our geographies. There's puts and takes as we help brands develop and really create that demand, we see their productivity accelerate. You know, but there is nothing like a retro Jordan launch that comes in on a Friday and sells on a Saturday, right? I mean, that's a tough dynamic to overcome. Again, I think there is enough heat, and we do a great job of storytelling and demand creation that we will continue to be productive in our boxes and our omni-channel efforts. Okay, great. Thank you so much. Then just thinking more broadly about the store fleet, with downsizing of the Nike business, does it cause you to take an assessment of the store fleet for potentially additional closures in future years? Noting, of course, that it sounded like you're shrinking square footage by 3% in the upcoming year, and you know, effectively shortened your average lease life. Should we take these as signals, perhaps, that over time you plan to continue to downsize the fleet? Well, Kimberly, we've been a net door closer for a decade now, right? You know, if you look a decade ago, we had probably 4,000 stores or close to 4,000 stores. We have continually looked for our opportunities to get the right size store in the right marketplace to serve the consumer. Just a slight correction, our square footage is gonna be down about 2%. Our door count will be down about 3%. Our team does a great job proactively managing our portfolio. When we see the opportunity to, you know, exit a lease early because the store's not as productive as we'd like or we can't afford to put the capital into that specific marketplace, you know, we've done that, I think, a really good job of that over the years, and we'll continue to do that. I do expect that we will continue to see door count go down, square footage stay flat to slightly down. Yeah, Kimberly. Very clear. Thank you so much. Yeah. Okay. Please go ahead. Yeah, I was gonna say, as it relates to the lease life, I mean, that you should read that as an indication of our as a proxy as part of our omni-channel journey. Like, you know, as digital engagement goes up and as we continue to increase our digital penetration, you know, thinking of that full omni circle, we need to consider our physical footprint and giving ourselves leverage in that physical footprint to flex up or flex down and get out of leases in a cost-effective manner, as Dick pointed out, has been a journey and has been an effort that we've been on for a while. That continues to really help us to make the right real estate decisions. You know, one other thing about the door count as we look at 2022 and beyond will be the growth of the WSS stores, right? We made a great acquisition of a fast-growing brand, you know, very connected to a specific consumer. You know, we will, you know, over the next three years, are planning to double that door count. So again, we'll expand much slower with atmos because it's really a digitally led brand. But WSS, you know, there's an awful lot of white space as it relates to that consumer and where they're not. We've begun the migration out of Southern California, but, you know, we've just stuck our toe in the water in Texas. You know, we've got South Florida that's gonna open up with WSS. So again, we see tremendous growth opportunities there. There's always puts and takes across the portfolio. Thank you so much. That's very helpful. Our next question comes from Brian McNamara with Berenberg Capital Markets. You may now go ahead. Hey, thank you for taking the question. Clearly these vendor decisions aren't made overnight. I'm just curious, kind of when did you get the indication or when did you give Nike the indication that things are kinda headed this way? Has it been over the last couple of months, as you previously mentioned? Or has it been kind of over the last couple of years? I'm just curious the timeline of the vendor decision. Thanks. We started this journey, you know, just prior to COVID. You know, if you go back to our investor day in March 2019, we started to show some of the vendor changes there. Certainly, as it relates to the numbers that we talked about today, our 2022 plan and the wraparound into 2023, you know, those discussions really happened during January, late January, actually, when we were in our regular planning process with Nike. Again, it's sort of an acceleration, again, that I believe is driven by their success with DTC, certainly. But I think that COVID has allowed us all to see that the consumer is changing, the consumer behaviors are changing. Our consumer is clearly saying that they want choice and that multi-brand destinations matter. When 70%+ of your... ...75% of your purchases are with one vendor. It doesn't leave a lot of space in your store for choice. That's part of what we're looking at. Really, it's an acceleration of conversation that's been going on for a couple years, and it was late January when we worked on the planning for 2022. Just a quick follow-up on the 55%. Is that a number you expect to continue to drift lower over time? How should we think about that on a kind of a longer term outlook? Thanks. Yeah. We don't expect it to go up from there. We would expect it to probably drift slightly lower. That depends on, you know, where we take the brand, where we work with the brand to move forward to meet our customer expectations, you know, how their DTC business progresses, etc. Again, that 50%-55%. You know, if you reflect back to the mid-2000s, you know, 2006 to 2010, that's about where we were, in the mid-40s to upper 50s. You know, I think that we will create a healthier business by spreading, you know, our choice for our consumers out to a broader vendor base. Brian, it's math, and it's obvious, but remember that penetration is the penetration of our buy. We expect to grow our non-Nike brands at a much faster rate. Therefore, that penetration could go down just as a sheer result of the growth of our other businesses. Great. Thank you. Our next question comes from Michael Binetti with Credit Suisse. You may now go ahead. Hey, guys. Thanks for taking our question here. I guess we've gone over the vendor mix quite a bit here, but you know, maybe I'll focus on the model for a minute. Can you help us just reconcile between the comps down 8%-10%, footage down 1%-2% more on top of that, but revenue's only down 4%-6%? I think there's a gap there. Maybe you can just help us clearly understand the footage down 1%-2%. Where you know, how do the acquisitions fit into that number? I would also love a little bit of help understanding the cadence of gross margin this year and how much we should expect the gross margin compression to be concentrated around the fourth quarter vendor mix? Thanks. Yeah. I'll jump on the first part of that question, Michael, and then Andrew can jump in. You know, again, part of the sales change, the comp change, and the square footage change is being driven by our acquisition of WSS and atmos, right? atmos does a bigger percentage of their sales digitally. They're a double-digit comp grower. WSS has been a teens comp grower and, you know, we expect that to continue and add square footage there. That, that's sort of the relationship. We expect, you know, as we talked about in the prepared remarks, we expect doors to be down about 3% square footage in that 1%-2% range. In productivity, because of a broader offering in our off-mall community stores and power stores, we expect, you know, that that's gonna help cover some of the overall sales change, as will WSS as we expand their footprint. Just to add a little bit on the footprint, because we're opening bigger formats, so you can close at a faster rate of stores than as you open stores in bigger footprints. WSS is a bigger footprint. The community and Homefield stores are bigger footprint. That's why the square footage is declining at a slower rate. Now, as it relates to gross margin, you know, from a larger perspective, you know, there is a, you know, we called a 400- to 410-basis-point decline in gross margin. As you think about that, about 100, you know, about 130 of that relates to occupancy deleverage as you think about the revenue coming down and us moving out of and us having that occupancy footprint. So there's gonna be some deleverage there. Then on the merch side, approximately 280-ish on the merch side. Of that 280 on the merch side, approximately 100 basis is really driven by increased freight costs. How would you break down the remainder of the other $180 then? You know, yeah. Yes, there's gonna be some distributions that are costs, and the rest of it is really distribution center costs increased, acquisition related costs. We honestly think that we'll see markdowns shift a little bit. Yeah, you're gonna see markdowns. We've run at historical lows during 2021, and we don't expect the marketplace to get overly promotional, but we do expect it to be more promotional than it has been in 2021. Right. Yeah. Just so that I'm crystal clear, the footprint down 1%-2% is taking the end point from 2021 with WSS and atmos in it, and the end point of 2022, that delta will be down 1%-2% when we add all the components up. That's correct. Yeah. Okay. Thank you, guys. Our next question comes from Cristina Fernandez with Telsey. You may now go ahead. Yeah, good morning. I wanted to talk about the vendor mix change. Think about, you know, apparel versus footwear composition. Apparel, on my math, was about 16% of sales last year. As you look, you know, as to how the business is changing, do you see that being materially higher as we move over the next couple years? Yeah, we absolutely do, both from a branded perspective and our private and control brands. You know, again, one of the benefits of moving off mall into bigger square footage doors is that we can do a better job of storytelling for apparel, for all the great apparel brands that we work with. You know, as we brought in our LCKR product and our Cozi product in Q3 and Q4, we saw great acceptance from our consumers. You know, we've got, you know, many brands that we work with to drive apparel as well. I think the more square footage really allows us to do a better job of the storytelling and demand creation around apparel and, you know, working with great collaborators like Melody Ehsani, Don C, those all drive our apparel heat, and we'll continue to leverage that across all of our brands. As a follow-up, can you talk about the power stores that you've opened so far? How are they performing relative to the stores in malls? Any details you can share about how the vendor mix is in those stores and the apparel penetration that would help, so think about as you transition to more out, you know, off mall stores, how that's gonna help the business. Yeah. We haven't broken down the specifics inside each of those power store boxes, but suffice it to say that we've been very pleased with the results of the first 50. That's why we're accelerating our expansion of those. You know, if you think about our first 181st Street, you know, Eight Mile Road in Detroit, Compton, Dallas, Crenshaw, Philadelphia. In the U.K., we've opened up Brixton. We've seen a broader distribution of brands in those stores because we have more square footage. We've seen a higher penetration of women's and kids because we can do a more full family presentation in those stores. We've seen greater connectivity from our consumer as they come into those stores, spend more time shopping, their dwell time is longer, etc. Again, we've really, you know, been on this journey. The 181st Street store in the Heights opened up in 2019. You know, we've been on this proof of concept journey and, you know, you have to test it around the globe, you have to test it in a lot of different ways. The brand expansion, the square footage expansion, the ability to take care of full family shoppers with full family offerings has really been the strength of the power stores and community stores. Of course, the deep connection with the community. You know, bringing in local managers to run big boxes. You know, historically, we would have brought a manager who had experience running that size store. We're now looking for local managers to make sure that they've got that deep connectivity with the community. Our last question comes from Robert Drbul with Guggenheim Securities. You may now go ahead. Hi. Good morning. Good morning. Couple of quick questions. Good morning, Dick. I think the first one is, when you think about, you know, some of the vendor shift, the marketing expense requirements, you know, I don't know if it's cooperative marketing or co-op dollars, et cetera, can you just talk about your plan and need to invest in some of these, you know, smaller, I would say, use the iconic, you know, brands or players that you're partnering up with and that relationship. I guess the second question is, when you look and this is probably for Andrew, but when you think about, you know, the transition underway in the business, it does sort of strike me that, you know, the range of rates that you're forecasting for 2022 is rather tight versus your historical expectations for, like, a full year. I just wonder if you can just address. You know, that visibility, the confidence in, you know, gross margin, 20 basis point range, SG&A range, just broadly speaking, that would be helpful. Thanks. Sure. Well, I'll start, Bob, and then I'll hand over to Andrew for the second part of the question. Clearly, you know, we believe that part of our role in the market is to be a demand creation tool, right? We're working with smaller vendors. We're working with all of the vendors that we have great products from to create better stories and create more connectivity. Part of our marketing, we've got great digital marketing and great social connectivity with our consumers. Our followership is significant. We continue to leverage our FLX program to speak to our best consumers more often. We start with exclusive concepts that we're creating with all of these vendors. We communicate that digitally and socially and through FLX. As we get further and further along that FLX journey, we'll be able to have enough data that we can truly personalize the connectivity with our consumers. I think that we've got, you know, the right elements in place, and we've got, you know, very willing partners to continue to grow with us, and invest with us. I think certainly a bit of a shift. You know, the truth is that you don't have to spend a lot of a lot of marketing dollars on certain high heat profile, you know, silhouettes. We will deploy those marketing dollars to be more effective as we work against our consumer preferences and the exclusivity of the concepts that we're gonna bring to bear in our stores. Now I'll turn it... Bob, I'll turn it over to Andrew to talk you through some of the ranges and margins. Sure. As you think about our 2022 guidance and some of the information that we put out with regards to 2022, you know, our confidence and our ability to really look at our market and look at our offerings and look at our product bottoms-up perspective and really get a fairly good perspective on our top line. We obviously have a lot of information on our margins. Obviously, we're in an MSRP environment, and so, you know, our ability to really drive margin is, you know, it has a ceiling and it has a floor. As you think about our ability to really get close to the pin on that, what we've done is we feel confident in our numbers, but we also have built in, you know, lapping stimulus. We've also built in what we believe is slower velocity of some of our non-Nike accounts that some of our non-Nike product that will now be elevated. We believe that we have, you know, a really good pulse on that, so this is the information that we put out for 2022. I think it does provide a relatively, you know, range that's appropriate for full year guidance. I think that if there's some specific line item that you wanna talk about, I'm happy to focus on it. No. I mean, I think generally, especially just I think the margin piece of it, the growth margin piece of it, you know, just seems narrow with a lot of the change. But I guess the other piece that I would ask, Andrew, is, you know, with the share repurchase program, the $1.2 billion, I guess, can you just maybe address the thought process at this point in time on, you know, the share repurchase and I guess what's in this forecast, the financial outlook for 2022 that you have in there today? Thanks. Yeah. As you know, our share repurchase is and always has been an opportunistic share repurchase. Yeah, we don't forecast or guide share repurchase. We'll obviously lean into those opportunities to return value to the shareholder as the market conditions allow. We have not modeled in a particular share repurchase amount in the guidance that we've provided. Great. Okay. Thank you very much. Good luck. Thank you. Thanks, Bob. I would like to turn the call back to Mr. Robert Higginbotham for any closing remarks. Thank you for joining us today. Please join us again for our next earnings call, which we anticipate will take place at 9:00 A.M. on Friday, May 20. The call will follow the release of our first quarter results earlier that morning. Thank you and goodbye. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.