Welcome to Foot Locker, Inc.'s 2023 Investor Day Lacing Up for the Future. Thank you to everyone for being with us in the room today. Thank you to everyone else for listening online. We are incredibly excited to present to you the new strategic vision of our company. Before we get into that, a couple of formalities. First, our disclosure on forward-looking statements. Then, a quick run of show. In a moment, I'll walk you through the highlights of our fourth quarter results. Then, our Chief Executive Officer, Mary Dillon, will come on to introduce to you our new strategic framework and growth plans. We'll then have our executive team begin to walk you through the details of that plan. At around 9:45 A.M., we'll take about a 15-minute break. We'll then resume presentations until around 10:30 A.M. and then we'll wrap up with some Q&A. Let's get into it. Starting with our fourth quarter results. We had an exceptional fourth quarter. Our comps grew 4.2%, well ahead of guidance for down 6%-8%, driven by strong holiday demand and access to high-quality inventory. As we continue to diversify our assortment, our non-Nike sales grew mid-single digits, with our Nike mix down only slightly, much better than we originally expected. By region, we saw broad-based momentum. In North America, our core Foot Locker banner was up over 13%, while Champs was down 10% as we reposition that banner. EMEA comps grew 14% with ongoing strength in key markets and APAC grew nearly 6% given our investments in stores, our brand, and community experience. Our gross margins overall were down 290 basis points, given promotions were higher than the prior year, but in line with our plan. Our inventory up 30% with high-quality product positions as well for 2023. Our non-GAAP EPS came in at $0.97 above our guidance for $0.45-$0.53. By category, footwear led the way up mid-single digits, but with apparel not far behind, up low single digits. We were above guidance in each month of the quarter, with particular strength in December, especially during those key shopping dates during the holidays. Again, our gross margins were down overall by 290 basis points, 310 basis points from planned promotions against the still favorable environment from a year before. Our comp increase helped us drive occupancy leverage of 20 basis points. SG&A leveraged by 10 basis points, with the early benefits from our cost optimization program being largely offset by inflation. So that's the quarter. We will spend the rest of the day looking forward. Now let me bring on our Chief Executive Officer, Mary Dillon. Okay, good morning, everybody. Thank you so much for being here today in the room or on the webcast. We really appreciate your time. In the last six months or so since I joined Foot Locker, I've been spending my time learning about our business, the industry, our team, our brand partners, and really confirming many of the hypotheses that I had when I decided to join the company, which is that we have an exciting opportunity ahead. Today, along with some of my leaders, I'm excited to show you our direction for the future, which we call our Lace Up plan. Let's stop and let me just give some context at the top. Foot Locker as a company has many strong assets to leverage, and we will talk about those today. We also operate in an exciting growth category with strong tailwinds, and we have insights about the category and the consumer that provide clear pathways to position our banners for growth. I believe that with the right focus, the right investments, and new capabilities, we will drive long-term profitable growth at Foot Locker. Let me talk about our strengths first. Foot Locker has a strong and unique place in the sneaker ecosystem. We are the OG. Foot Locker is the number one global brand synonymous with sneakers and sneaker culture. We have a 50-year authentic history around street basketball and youth culture and we're truly a global iconic brand with over 90% brand awareness and social media engagement that's incredible. If you look at just Foot Locker alone, we have over 12 million followers, and that's five times the combined followership of our next four competitors. True brand engagement. Everybody knows and loves and grew up with Foot Locker. In fact, just a couple of weeks ago, the Foot Locker striper was a clue on Jeopardy. That tells you a lot. We're a favorite brand with teens. We know teens are the ultimate arbiter of what's cool. We have tremendous brand partnerships. We're the number one wholesale partner for leading brands in the industry. We have over 40,000 store associates who are truly trusted experts and provide exceptional service. I would also add, this is something we're really proud about, Foot Locker is a true job creator. Often a first job for young global people, young, diverse people around the world. We provide tremendous career possibilities. In fact, in the U.S., over 90% of our store teams are Black or Hispanic. Now, let's talk about the sneaker category. I think everybody here knows it's a large and growing category. Sneakers alone are $80 billion in sales in North America and Europe. The category is projected to grow at a mid-single-digit rate. You know, it's a category with high engagement that's a lot like beauty. It's about individual expression, newness and innovation matter, physical and digital experiences matter. There's plenty of factors that point to support for the continued growth of the category. Mass casualization. I think we all know that hybrid work is here to stay, and so whether it's that or sneakers with your tuxedo or your dress, we are not going back to less comfort in our lives, I can tell you that. Also, second factor, performance is becoming mainstream. Traditional and new performance sneaker brands are becoming fashion statements. Third, the sneakerhead mindset is on the rise, with sneakers becoming a favorite avenue for individual expression, where newness and collectibility truly fuel demand for more. All the sneaker-wearing and category participation is driving demand for a variety of brands. Consumers want choice, and we can give that to them. In fact, sneakers are becoming a larger share of the footwear market, and there's still lots of room for a sneaker wardrobe to grow in closets. More brands are serving these customer needs than ever before. Of course, Nike, adidas, New Balance, and PUMA to newer brands like On Running and HOKA. People are building a sneaker wardrobe and not just niche sneakerhead collectors. We see it in our own data. 40% of our transactions have multiple brands, and the majority of our highest frequency shoppers buy multiple brands. What I'd like to do next is dive a little deeper into demographics and psychographics or mindset and motivation. Let me start with the demographics of our Foot Locker portfolio. We have a solid base across demographics relative to the category today. You can see the data up on the slide. With a skew towards younger and more diverse customers, which we believe is a strategic advantage. These are the fastest-growing consumer segments in the U.S. and are rapidly expanding in their purchase power. If you don't win with young, diverse consumers in this category, you don't win in the long run, but d riving demand and growth is also not just about putting people in a demographic box. It's about unlocking growth by understanding and tapping into the mindset of shoppers in the category. In other word, a sneakerhead is a mindset, but a sneakerhead could be somebody of any age, race, or income. That's why we're focused on unlocking the inner sneakerhead in all of us. Let me explain more. We just completed our most exhaustive consumer segmentation study yet, and we will leverage those insights to differentiate our banners and provide new pathways to growth. Let me just share some of the highlights. It's a lot to digest. There's a broad set of shopping occasions and motivations for consumers within the sneaker market, which is true for almost any consumer category. These diverse motivations can be translated to specific consumer segments, which allow us to hone in on the mindset of shoppers and better meet their needs. Let me talk about the segments, and you might recognize yourself in one of these. There's a sneaker maven. This is the biggest segment in the marketplace. Sneaker-obsessed shoppers who represent themselves through their shoes. Fashion-forward expressionists. They wanna look and feel cool and fashionable, and sneakers play a big role in that. The active athlete prioritizes performance when shopping for shoes and often adds an apparel item to their shopping trip. Quality seekers. A quality seeker is a practically-minded shopper focused on well-fitting shoes and well-known brands. The deal finder who focuses on price as their highest priority. By the way, these segments are not completely discrete. Consumers might start in one segment and then grow their sneaker wardrobe by moving into another segment as well. I, for example, have long been in the active athlete segment as a runner, but now I'm moving into the fashion-forward expressionist segment and displacing a lot of heels in my closet in the process. Unfortunately, one of my daughters has my shoe size. She's got some damn nice heels now. You know, as evidenced by my Nike Air Max 97 Gold Bullet shoes today that I chose to match my jacket. Fashion-forward expressionist and active athlete. The Foot Locker portfolio over-indexes with the sneaker maven and captures a strong business with the fashion-forward expressionists. Both of these segments skew younger and more diverse, and while they over-index in their love of Nike and Jordans, they also have other brands in their consideration set, like adidas, PUMA, New Balance, and Converse. You may have guessed we have an incredibly strong relationship with that customer. They love the brands we carry, the energy that we bring to the category, and especially our in-store experience. Our portfolio today also attracts customers across the other segments, given our range of banners and the brands that we offer within them. Our Lace Up plan will create pathways for growth in both our areas of historic strength and our opportunity areas for the future. We'll leverage our sneakerthority at the center of sneaker culture to grow in two ways. Expanding our wallet share with sneaker mavens and fashion-forward expressionists and broaden our reach with the other segments. We'll start with the sneaker maven and fashion-forward expressionists. As we showed in the previous slide, we over-index with sneaker mavens and have a strong business with the fashion-forward expressionists already today. Our community stores really bring this relationship to life. Community stores are located in neighborhoods with a passion for sneakers, and those stores have an average order value that's over 20% higher than the balance of the chain, and we serve the full family needs in those stores. Our partnership with Crocs is just one example of how we build sneaker culture for our brand partners as well. 70% of our Crocs sales are going to women and children, and the way that we're able to connect that brand with sneaker cultures and our customers has allowed that brand to both drive more productivity and create higher pricing power than before, especially with exclusive tie-ins like Crocs and General Mills. As we walk through our Lace Up Plan today, you will see how our key actions from a relaunch of the Foot Locker brand to new store concepts to exciting brand partnerships to relaunch of our loyalty will all work together to drive even more loyalty and growth with these key segments. Secondly, while the active athletes, the quality seeker, the deal finders have different motivation than those first two segments, sneakers are a part of their everyday lives and increasingly so over time. Given our current share in those segments, we have opportunity to broaden our reach and better invite them into our portfolio and we've already started to do just that. For example, in 2022, we acquired over 10 million new customers in the U.S. with brands like On Running and HOKA driving 2x the acquisition of other brands, and 60% of those new consumers are women. Brand partnerships like these are helping us to bring in new customers into our franchise as well as helping them expand to a younger and more diverse customer set than they may have today. In addition to new brand offerings, new store formats and locations will also be a key strategy for us to reach those key segments. Example, our power store, our new power store in Dallas Fort Worth has a focus on running and basketball and our best expression of sneakers, and it's attracting a older and higher income shopper. In fact, the household median income of the Dallas Fort Worth store is 30% higher than our average fleet in the fleet. These are just a couple of examples of early wins that we're seeing in our ability to both expand wallet share and broaden our customer reach, which gives us great confidence in our growth plans. With this category segmentation as a backdrop, we've created a sneaker growth plan, positioning our banners to play each a distinct role. You'll see as we go through our strategic priorities today, we'll bring these distinctions to life by providing the right offerings and experiences for each banner and segment, combined with a powerful new set of demand creation tools and loyalty and CRM and a much-improved e-commerce experience. Foot Locker will continue to focus on the sneaker maven while we broaden Foot Locker's reach to new segments. Kids Foot Locker, as the number one kids-focused sneaker retailer, we believe in this brand's ability to broaden and serve more kids in more occasions. Champs will reposition to go after the more suburban active athlete, serving their footwear and apparel needs. WSS has a distinct focus on Hispanic families and more price-sensitive consumers and then atmos, which serves the premium customer with a focus on Japan and Japanese culture. Bringing it all together, our vision is that by leveraging our sneaker culture, passion, authority and expertise and that of our store teams, we will position our banners to deliver all things sneakers and unlock the inner sneakerhead in all of us. Let me show a quick video to bring this to life. Everybody knows our stripes. They stand for trust, community, knowledge, and of course, sneakers. At Foot Locker, we're not just here for sneaker culture. We are sneaker culture. We've been running the game for decades, powering the movement, updating and upgrading with every new generation of sneakerheads. Now it's time again to make change. We're on a mission to reach the global community, to unlock the inner sneakerhead in all of us, not just the legends on the court and trendsetters on the streets. We're for the sneaker mavens, the fashion-forward, and the active athletes too. More sneakers for more people. We're gonna show up for them by building and broadening our community and by empowering and inspiring the next generation. Plus, we're putting our stripers at the center of everything we do, everywhere we are and where our customers are. We're telling stories in store, powering up our digital capabilities, and leveling up our brand position, reinforcing our reputation as a place to go for all things sneakers. As we move forward with a fresh perspective, our stripes and future have never felt stronger. We're game to keep the ball in our court for another 50 years and the 50 after that. Let's get after it. She does a nice job of telling that story. Anyway, so what we're gonna do next is walk through the key strategic pillars of our plan, but I'd like to provide an overview on each first. The first strategic pillar is all about expanding sneaker culture. As a pioneer in the space, Foot Locker has been committed to developing sneaker culture over the last 50 years. We will leverage the passion and the commitment that we have for sneakers to serve more sneaker occasions, provide more choice, and drive greater distinction. Of course, our strong relationships with our brand partners in the industry is where it all starts. In fact, our relationships with our brand partners have been a top priority for me and my team as I joined the company. I've met with the top leaders of all of our largest brand partners to begin to share our vision for Foot Locker and our growth plans with them. Of course, Nike is our largest brand partner and the leader in the industry. From day one, I've been welcomed to the industry by John and Heidi and their team. My team and I have spent a great deal of time with Nike revitalizing our partnership, developing a shared vision of the future marketplace, aligning on growth plans in key strategic areas like basketball, kids, and sneaker culture. We've reestablished joint planning as well as data and insight sharing so that we can better serve customers. The fruits of our renewed commitment to one another will begin to show up in holiday this year as we build increasing momentum to 2024 in the 50th anniversary of Foot Locker. I'd like to thank John and Heidi and their entire leadership team for helping us revitalize the partnership and chart a path forward towards consumer-led ideas and growth. Of course, there are so many other wonderful brands that our customers love today or are beginning to love. New Balance, PUMA, adidas, Vans, Hoka, On Running, Crocs, UGG, Brooks, ASICS, the list goes on. I look forward to building collaborative partnerships and plans with all of our key partners as we strengthen our position at the center of sneaker culture. Chris Santaella, our Chief Merchandising Officer, will cover the first strategic imperative. The second imperative we call powering up our portfolio. Frank Bracken, our Chief Commercial Officer, and Tony Aversa, our SVP of Store Development, will together walk through how we'll reshape our banner portfolio with focus, intent, and innovation. We are so excited about a major relaunch of the Foot Locker and Kids Foot Locker brands in creating clear differentiation for the rest of our portfolio, as well as transforming our real estate to support our growth ambitions. The next imperative is deepening our relationships with customers. Frank will then come back to cover the critical topic of investing in all things digital, specifically reinventing our loyalty program and building our CRM capabilities to create deeper relationships with new and current customers. Then our last imperative is all about being best-in-class omni. After a break, Peter Scaturro, our SVP of Strategic Planning and Growth, and Elliott Rodgers, our new Chief Operations Officer, will describe how we'll accelerate and enable our omni offense, increasing our digital mix by removing friction and having better connectivity between channels to drive a greater penetration of digital in our business. Together, all these strategic priorities will create value for all of our stakeholders, our customers, our communities, our team members, and our investors alike. There is work to do, but we know what it takes, and we're ready to do that. First, it's about simplifying our organization. Closing underperforming businesses to reinvest those resources and focus on the banners and the geographies that'll drive profitable growth. We like to say it's getting focused on all things sneakers. Investing into technology and capabilities that will allow us to have a more targeted and personalized demand engine over time. Changing our mindset as an organization to becoming truly customer-led. Finally, creating a culture that leads through the lenses of functional expertise, enterprise thinking, and collaboration, and putting our customers and our Stripers in the center of everything we do. Doesn't happen overnight. We've already begun simplifying our organization with the closure of Team Sales, Eastbay, Footaction, Sidestep, and transitioning most of Asia to a licensed model. 2023 is the year where we will reset the business. Our relationship with our brands, our banner repositioning, and store optimization will begin to execute on our cost savings, while at the same time, investing in technology and new capabilities in our global brand platform, so that in 2024 and beyond, our core banner focus, new concepts, and better digital and loyalty capabilities will drive sustainable growth. I couldn't be prouder of the team that's taken the field with me. We have an amazing mix of veteran knowledge and fresh perspectives. I'd like to mention two of our newest members who are joining us here today. Adrian Butler, our Chief Technology Officer, who recently joined us from Casey's General Stores, bringing incredible experience as a technology leader across restaurant and retail. Kim Waldmann, who is joining us officially next Monday, but we've announced this today. She's joining us, and she's most recently the Chief Digital and Marketing Officer of Athleta, and prior to that, the General Manager of E-commerce at Sephora, and she'll be our Chief Customer Officer. Let me wrap this section up by just highlighting our targets and aspirations, and we'll walk through all of this today. I believe that our Lace Up Plan to simplify, invest, and grow and execute across the strategic pillars I just gave you an overview on will truly create value for all stakeholders and set us on a path to exceed $10 billion in revenue over time and to exceed a 10% EBIT margin. Now let me bring up our Chief Merchandising Officer, Chris Santaella, to begin walking you through our strategic imperatives. All right. Thanks, Mary, and good morning, everyone. Sneaker culture has been the driving force behind Foot Locker for the last 49 years and will be the driving force behind the next 50. The last few years has created a lot of change in the industry, and one of the most positive changes has been the evolution of the consumer. I will take you through the first strategic imperative on expanding sneaker culture and how Foot Locker continues to evolve with the consumer. As Mary touched on, sneaker culture continues to evolve and be much more inclusive. More people are wearing sneakers on more occasions than ever before. No longer are sneakers only for sport and for weekends. They are part of every aspect of life for many people. The broadening consumer base continues to keep sneakers top of mind. The sneaker maven is looking for a pair of Nike Panda Dunks. The fashion-forward expressionist is looking for hunting the New Balance 9060. The active athlete is looking for performance innovation from brands like On and HOKA. The quality seeker and deal finder are looking for authentic brands and great price value in their sneaker shopping occasion. Sneaker culture was built on accessibility and inclusivity. If you had passion for sneakers, whether it's for style, comfort, or performance, there was something for everyone. That inclusivity was a great foundation for the future broadening consumer base. Foot Locker was there from the beginning, providing access to a world of consumers through our global store fleet and our passionate striper community. The broadening consumer base has created a broader brand portfolio as more consumers are seeking more brands to satisfy their footwear occasions. Foot Locker has evolved our brand portfolio to include a much broader brand representation. In the last few years, Vans, Crocs, UGG, On Running, and HOKA have all been added to our brand portfolio. In addition to our long-standing partnerships with premium athletic brands such as Nike, adidas, PUMA, New Balance, and Under Armour, just to name a few. There are more consumers seeking more brands to support their desire to wear sneakers on more occasions. As more consumers are wearing sneakers for more occasions, Foot Locker has evolved our merchandise strategies to focus on these areas. The first is broadening our footwear assortment to satisfy more footwear occasions. The sneaker maven and fashion-forward expressionist will continue to drive our core business through premium lifestyle product. This could be a Jordan Retro, adidas Superstar, or UGG Classic Mini. Premium lifestyle footwear will continue to be the sharp point for Foot Locker. In addition to style, we will expand our assortment to the active athlete focused on performance innovation in their sneaker shopping occasion. This could be running innovation from On Running or HOKA, or the next performance basketball model, such as the upcoming Jayson Tatum launch from Jordan Brand. The second focus area is broadening our brand portfolio. Our highest value customer purchase three footwear brands per year. They crave a multi-branded environment for their sneaker shopping occasion. Providing choice, both from a brand and category perspective, are critical to satisfying the evolving consumer appetite and providing our customer the best premium multi-brand experience in the marketplace. The third focus is on sneaker distinction. Our customer craves scarcity and a differentiated marketplace. Foot Locker will utilize our global sneaker community to elevate our exclusive product opportunities and create a more differentiated marketplace in the future. Foot Locker will continue to lead in basketball exclusivity in addition to developing exclusive product concepts in other categories. These principles drive customer loyalty in addition to broadening our reach and diversifying our brand portfolio. In addition to more consumers and more brands driving the future of sneaker culture, there are also more shopping occasions that are providing Foot Locker opportunity to expand our reach and increase wallet share from our existing customers. The global pandemic and new hybrid work environment has created an increased desire for performance footwear, both from a style and performance perspective. Comfort and versatility is driving the customer along with a desire to stay fit through a changing hybrid lifestyle. Sneaker innovation is deeply rooted in Foot Locker's DNA, both from a style and performance perspective. Delivering new performance innovation has been a big part of Foot Locker's 50-year journey. We have accelerated this opportunity of performance product with the development of new brands such as On and HOKA, along with aggressive growth plans with ASICS, Brooks, and Nike. Foot Locker is well-positioned to capitalize on the performance opportunity. The second footwear opportunity is the casual business. The broadening customer base has looked for comfort and style as they increase their sneaker-wearing occasions. Foot Locker has deep heritage with premium athletic brands and has now expanded our brand portfolio to include many premium casual brands. Over the last five years, Foot Locker has added Vans, Crocs, and UGG, in addition to long-standing meaningful business with Timberland and Converse. This segment is critical to our growth opportunity in women's and kids, as the casual business has a deeper customer connection with her than the male consumer. The third opportunity is under 100. Foot Locker will continue to focus on the premium segment of the marketplace, through WSS and Champs, we have the opportunity to expand our reach more aggressively in the under 100 marketplace. We have strong relationships with our brand partners such as Vans, Converse, and Crocs, in addition to developing opportunities with our premium athletic brands. Our acquisition of WSS has allowed us to better understand the under 100 marketplace and where we can play authentically in this opportunity. Performance, casual, and under 100 all provide meaningful incremental growth and allow Foot Locker to authentically evolve our footwear category portfolio. In addition to category opportunity, we continue to develop our brand partnerships. Nike will continue to be the largest brand partner, and we've revitalized our Nike relationship and both companies are committed to growth. The partnership is focused on creating a strategy that is complementary to the Nike direct-to-consumer strategy. The focus is on consumer sharp points along with an integrated marketplace. The consumer strategy is rooted in Foot Locker strengths and heritage and sneaker culture. Basketball culture and House of Hoops will lead our partnership as our shared passion to elevate the next generation of basketball icons such as Jayson Tatum and Devin Booker is critical to our customer and the continued development of the sneaker industry. Our second aligned focus is kids. Through Kids Foot Locker and Foot Locker globally, we will partner with Nike to develop the next generation of sneaker enthusiasts. Similar to developing the next generation of basketball, developing the next generation of sneakerheads is critical to Foot Locker and Nike's long-term growth. The third partnership strategy is sneaker culture. Foot Locker and Nike's relationship is close to 50 years old. The celebration of sneaker culture has been a key consumer connection throughout the journey. The global Tuned Air franchise anchors our position outside of basketball. We have some big plans to celebrate the 25-year anniversary of that model later this year. Beyond the consumer sharp points, we are partnering across planning and loyalty to develop an integrated marketplace. The revitalized alignment has positioned Nike and Foot Locker to return to growth in 2024. In addition to growth, the partnership is committed to developing unrivaled experiences for our consumers. We will reset House of Hoops with elevated product positions along with reimagining the overall experience. Starting holiday 2023, Foot Locker will have elevated access in LeBron and KD Retro models, LeBron signature, and global Air Force 1 models. Kids Foot Locker will continue to lead to be the Nike Kids leader as the only retail partner 100% focused on kids. KFL will outpace the market in kids growth from Nike. The Nike and Foot Locker partnership has always been deeply rooted in celebrating sneaker moments. As the partnership evolves, sneaker moments will continue to play an important role. 2023 is the 25-year anniversary of the exclusive Tuned Air franchise. Nike and Foot Locker will have a global celebration of that anniversary in holiday 2023. Following that, in 2024, Foot Locker and Nike will partner on an exclusive product concept celebrating Foot Locker's 50-year anniversary. The concept will include some of the most iconic models in the industry, along with an elevated go-to-market strategy celebrating our 50-year partnership. In addition to Nike, we have focused on expanding our brand portfolio to reach more consumers on more occasions. Foot Locker's market share in non-Nike brands continues to be in the high single-digit range, but much lower than the mid-teen market share Foot Locker has in total. We have significant opportunity across brands like adidas, New Balance, and PUMA, just to mention a few. The growth opportunity is rooted in long-range planning, elevated go-to-market strategies, and co-created product franchises. One example is our PUMA LaMelo Ball franchise, where we collaborated on a multiyear journey with elevated go-to-market strategies, such as Rick and Morty launch last month during NBA All-Star Weekend. Foot Locker will also partner with PUMA on a leadership position with the recently announced Rihanna and Fenty collaboration planned for later this year. We are excited about the energy Rihanna can bring to an already very strong women's footwear market. In addition to PUMA, Foot Locker has accelerated growth plans with running brands such as New Balance, On, and HOKA. We have also seen record growth in casual brands such as Crocs and UGG. Our brand portfolio and footwear is stronger and broader than ever. Foot Locker is well-positioned to capture more consumer occasions in the future. As we broaden our brand and category portfolio, driving marketplace distinction and scarcity play an important role to make Foot Locker the must-shop destination. Our customer craves scarcity, and by utilizing our global leadership position, we have the ability to develop and create more exclusive product opportunities for our customer. That competitive advantage will increase our exclusive product mix from 15% to 25% of our product assortment. I mentioned Nike Tuned Air and PUMA LaMelo Ball franchises earlier as two current examples of exclusive leadership. In 2023, Foot Locker will launch a signature basketball model from Anthony Edwards with adidas, along with exclusive color positions with Nike LeBron 21 and PUMA Scoot Henderson. In addition to signature athlete positions, we have partnered with several brands on exclusive third-party collaborations. PUMA L.O.L. Surprise! and Crocs Cinnamon Toast Crunch are two of the best examples. Elevating exclusivity is critical in developing a differentiated marketplace for a consumer who craves scarcity in a marketplace that needs differentiated retail. As Mary stated, our aspirations are clear. Broaden and expand sneaker culture through more consumers and more occasions. Revitalize the Nike relationship and diversify our brand portfolio. Nike will continue to lead our brand portfolio and be 55%-60% of our mix. Accelerate growth plans of our non-Nike partners at two times the average growth plans. Foot Locker's brand portfolio is the strongest in the industry and positioned well to serve more consumers and more sneaker occasions. Lastly, increase our exclusive mix to 25%. Basketball will continue to be the sharp point for exclusivity, along with elevating other opportunities across all categories and brands. Foot Locker is well-positioned with all of our brand partners to deliver against these aspirations as we move forward to the next 50 years. Thank you. I will turn it over to Frank Bracken. In turn, the scale of our relationship with our customers and our emerging capability to harvest insights from that data is of great value to our brand partners. Can you guys hear me? Because I'd prefer not have you down. Yeah. Okay. No worries. Not just about you guys. In turn, the scale of our relationship with our customers and our emerging capability to harvest insights from that data is of great value to our brand partners. We will increasingly build that customer insight function and capability led through technology and our refresh loyalty program in order to be of even greater value to our brand partners. This also allows us to work upstream with our partners to build more exclusive propositions to create more relevant content and media plans, and ultimately, to create more demand for our banners and our brand partners. Now, one of the most important actions we've taken over the last two years is the simplification of our banner portfolio. Simply stated, we had too much overlap between our banners, and some of our smaller banners were adding complexity to our operating model and also diluting our profitability. In North America, we have closed the Lady Foot Locker banner, the Footaction banner, and most recently, the Eastbay.com banner. In Europe, we had previously shut down the Runners Point, and in January this year, we announced the wind down of our Sidestep banner, which we expect to be complete by the end of Q2 this year. Lastly, in Asia, we've converted our business model from owned and operated to a licensed model. In fact, just today we announced the transfer of our business operations in Singapore and Malaysia to MAP Active. We expect that transition to also be complete by the end of our fiscal Q2 this year. Moving forward in Asia Pacific, we will have owned and operated businesses in Australia, New Zealand, and South Korea. As we position our banners for future growth and customer connection, we have a very deliberate purpose and role for each of those banners. If you recall, Mary introduced what we call our sneaker growth map. In this framework, we've identified the five consumer segments that we will focus on as a company. We've also identified the four major sneaker shopping occasions that drive the majority of customer purchase intent. We position each of our banners at the intersection of their core customer focus and the most compelling occasions that drives their sneaker buying behaviors. These positionings will drive everything we do, including real estate site selection, product merchandising, omni-marketing, and of course, great customer service. The Foot Locker banner will focus on the sneaker maven and fashion-forward consumer, while also broadening to serve more active athletes through the lens of basketball and running specifically. Kids Foot Locker will also target the sneaker maven and the fashion-forward consumer, albeit younger ones, and will continue to be the number one destination for kids and their parents to find all things sneakers. Champs Sports will sharpen its position against the active athlete and quality seeker, which includes moving more of the assortment to performance and athleisure in both footwear and apparel. We will further continue to differentiate Champs Sports from Foot Locker to drive incremental consumers in the fitness and lifestyle categories, the apparel category, and under $100 footwear. The WSS is very clearly positioned against the quality seeker and the deal finder with an even sharper point of view on the Hispanic family. This is driven by our real estate, a more value-driven assortment, and the great connectivity to the Hispanic community. Finally, atmos will play a key role in serving sneaker culture in their home market of Japan, while also pioneering new ideas and concepts that can inform the rest of our banner portfolio. I'm now going to transition into a few slides on each of the banners to go just a bit deeper on the strategy for each, starting with our lead brand, Foot Locker. Foot Locker is the undeniable leader of sneaker culture globally. As you look at the stats on the page, which I'm not going to read verbatim, you can see the strength and even the untapped potential of the brand. The brand has better consumer awareness than any other retail brand in the industry. Our stripers are trusted as advisors and members of their local communities, and our social engagement is simply unrivaled. That brand health, which we've built over the last 50 years, provides a great foundation for us to lead sneaker culture for the next 50 years. Our ambition for the global Foot Locker brand is to grow at a mid-single-digit CAGR, delivering over $6 billion of sales by 2026. We will accomplish that goal with four clear global strategies. First, we'll introduce a refreshed brand platform. Next, we'll intentionally broaden our assortment with key brand partners. Third, we'll unleash the power of our store fleet and our new retail concepts. Lastly, we will double down on stripers as the most authentic sneaker experts in the world. Let me take a minute to talk about each of these strategies. As the global leader of sneaker culture, we are very excited to introduce a new brand platform and campaign later this year. The objective of the platform is very clear. It's to invite more consumers than ever before to participate in sneaker culture. From the sneaker maven to the fashion-forward and all the way to the active athlete, if it's the best of sneakers that consumers want, we will unleash their inner sneakerhead. Upon launch, you will see the Foot Locker brand come to life through our unmistakable stripers and our iconic brand equities. You will see more brands and more sneakers featured than ever before, and our media plans will engage a wider audience than we have over the last decade, including men and women as part of the core brief. We'll launch our first campaign at holiday this year, and we've got a great roadmap that extends into 2024 that'll enable us to celebrate our fiftieth anniversary as a brand. As Chris said earlier, we have the full support of all of our key brand partners to make this more than just a commemorative moment, but a truly commercial moment. Chris did a great job walking through the overall broadening strategies for Foot Inc. For the Foot Locker banner, we'll continue to diversify and dimensionalize basketball culture through new signature athletes, exclusive concepts and stories, and the best offering of basketball classics in the world. We plan our basketball leadership to grow to be a multibillion-dollar business by 2026. As Mary and Chris alluded to earlier, we're very excited by the innovation of the Nike and Jordan brands and what they're bringing to market, particularly this holiday, and how that will fuel our exclusive position in House of Hoops. Next to that, we will reignite our commitment to serving runners and the lifestyle running category through expanded assortments and digital and community activations. The door count and assortment of HOKA and On Running are two great examples of newer brand partners thriving in the Foot Locker retail environment. Finally, Foot Locker will continue to build our assortment of casual sneaker and seasonal footwear, which further supports our brand diversification efforts and also helps us connect with more female consumers who want to participate in sneaker culture. Think of brands like UGG, Timberland, Crocs, and HEYDUDE as brands that have a clear role in sneaker culture with our Foot Locker consumer. To give our world-class assortment the best experience that we can, we've also kicked off our store of the future project. Our objective is to deliver a globally scalable technology and striper-powered Foot Locker experience that brings to life our leadership of all things sneakers. The core tenets of this experience will be the following. Clear sneaker leadership demonstrated through our brand selection, expanded assortments, and crisp storytelling. Dedicated men's and women's and kids' spaces so that we are more inclusive of all sneaker shoppers and can provide exceptional choice in merchandising variety. A digitally connected retail environment with stripers who can access a seamless omni-channel experience, including access to inventory across our entire store fleet. Finally, deliberate design choices that optimize our front-of-house sales productivity while also maximizing our back-of-house operational productivity. Our first pilot store will open here in New York City in Q1 of 2024, with other pilots planned next year in Italy and the U.K. Those pilots will inform a broader rollout of the store concept beginning in 2025. Now, the last topic I want to touch on for Foot Locker is our stripers. Plainly stated, our stripers are the backbone of our company, and we couldn't be more proud of their iconic status in our industry. We will continue to invest and leverage their sneaker expertise as a key differentiator and part of our brand's value proposition. We will double down on product training, leveraging our Lace Up app, which is available to all of our stripers. We will continue to equip stripers with handheld technology and integrated POS systems that unlock inventory across the entire system and also help us better acknowledge and serve our FLX members. As great ambassadors for our brand, they will continue to be present in the communities that we serve and also play a starring role in our social media and coming brand campaigns. That's our plan for global Foot Locker. Now I'd like to turn to our Kids Foot Locker banner. As the only kids-focused retailer with a full range of sneaker brands, KFL is a truly unique asset and value proposition in the marketplace and a banner that we will continue to invest in. As this slide illustrates, KFL is by far the favorite place for customers to shop for kids' sneakers. Almost 50% of those surveyed said that we were their favorite brand more than 15 points over the next highest retailer. Kids Foot Locker is also the leader in market share with nearly 2x the closest competitor when you include both KFL and Foot Locker kids' sales. We are differentiated by our premium product positioning versus most others in the marketplace who are focused on the low end of the category. Much like Foot Locker is the leading brand in the adult space, so is Kids the clear leader for sneakers with kids. Importantly, beyond its direct value as a business, KFL also has significant strategic value to our larger portfolio and our long-term growth strategies. As you can see from our lifetime value data, customers who are acquired through KFL are approximately 20% more valuable than those acquired through other banners. Additionally, the lifetime value from Kids Foot Locker customers, nearly half of that value is captured by other banners in the portfolio. In other words, customers acquired through KFL are a strong pipeline of business for our adult-based banners, as oftentimes parents will shop for themselves at a Foot Locker, and as grade school-aged kids become teens and wear adult sizes, we're able to graduate them into the Foot Locker banner as well. Having KFL as a customer acquisition and recruitment vehicle is not only good business in the short term, it also provides compelling long-term benefits to our portfolio. While we are the clear leader in the kids category, what gives us further confidence that there's still plenty of room to grow for KFL is presented on the page here. Our brand awareness of 74%, while strong, is still below that of Foot Locker's 90%, demonstrating that we still have consumers who aren't thinking of KFL as their first sneaker destination. Next to that, when surveying consumers who don't shop at KFL and asking them why they did not shop there, 22% of them cited a lack of physical availability as the top barrier to purchase. Finally, when our market planning team looked at the demand potential in our top 15 existing KFL markets alone, we modeled the potential to double our KFL sales in those markets. Clearly, there is more demand and more opportunity for the KFL banner. How do we take KFL to the next level? Our path to making KFL a $1 billion banner requires us to deliver a high single-digit to low double-digit CAGR over the next four years. Our KFL merchants will continue to take a kids-first approach to building the most compelling assortments in the marketplace and also drive exclusive content. This is something they've done very successfully over the last couple of years, including ideas like L.O.L. Surprise! with PUMA and the Crocs-General Mills collaboration. To help accelerate sales, our net KFL square footage will grow high single digits per year through 2026. Our new House of Play concept, which is delivering great four-wall results, will be a big part of those plans. Lastly, the team has shown that our digital acquisition and inclusion of KFL in our loyalty program is a winning combination to acquire and retain more households, something we tested last back to school and continue to invest in this year. There is a high level of confidence that we can continue to grow our KFL banner. The next banner I'll cover is Champs Sports. For over a decade, Champs has been a billion-dollar-plus banner for us in North America, and it's easy to understand why when you look at the stats on this page. There's very strong consumer awareness of the Champs Sports brand, particularly when compared to other sporting goods retailers. The Champs banner is also strongest in the markets that matter the most, those with high populations and high concentrations of consumers who are spending against their fitness and wellness needs. Finally, the Champs consumer is highly engaged in social media with an impressive digital footprint in the marketplace. As a destination in the mall for great sport lifestyle and sneakers, Champs Sports has been a strong number two banner next to Foot Locker. With our reset, we see an opportunity to be even sharper with the Champs banner in the future. As Foot Locker and Kids Foot Locker lead with the sneaker maven and the fashion-forward, there's a large and highly engaged consumer segment that Champs can serve within our portfolio. It starts with widening their current focus from the teen and high school athlete to a broader segment of consumers that we call the active athlete. As a segment, these are consumers who are highly connected to sport. They're inspired by what's worn by the best in the game, and they seek elevated, authentic shopping experiences. Next to that, they prefer one-stop shopping for both their footwear and apparel needs. The active athlete represents 21% of the sneaker growth map, which makes it the second-biggest consumer segment along with the fashion-forward. The category itself is forecasted to grow in the mid-single digits over the next four years, making it an attractive segment to position Champs within. To reposition and reset this business, we are taking key decisions to strengthen the core of Champs Sports so that we can stabilize the banner as a billion-dollar business. First, we are closing approximately 125 underperforming stores this year, focused on exiting non-priority markets and older format stores that are not the current expression of the brand, nor do they receive the best assortments and allocations. Moving forward, we are then prioritizing four key geographic markets where Champs has historical strength, and there are also very favorable consumer demographics and demand. That's specifically in the states of California, Texas, Florida, Georgia, and the Tri-State area. We're using Champs as our lead banner for apparel, driving more head-to-toe connectivity for the consumers shopping for their performance and athleisure needs. In summary, our ability to use Champs to further extend our consumer footprint and serve incremental occasions is what makes the totality of our North America banner portfolio even stronger moving forward. Now, in October of 2021, we acquired WSS, which was then a private company. In the time since, we've grown in our conviction that not only is WSS the next billion-dollar business for Foot Inc, but that WSS is a highly differentiated and incredibly well-positioned in its core consumer focus on the quality seeker and the deal finder segments, two consumer segments that Foot Locker previously did not directly serve. As I said, WSS is a banner that's very unique in our portfolio and in the marketplace, and it's nearly entirely complementary and incremental to our existing banner portfolio and well-positioned for growth in the coming years. It is the number one Hispanic-focused retailer in athletic footwear with a special connection to the communities that it serves. It is a 100% off-mall concept offering a fully bilingual shopping experience and hosting over 300 community events per year. WSS has a full family offering with more than 50% of its sales coming from kids and women, and the concept carries all of the globally relevant brands that the consumer wants, but at more accessible price points, as well as having a strong and growing private label business. It has an incredibly effective loyalty program as well, with nearly 4 million members that represent 85% of its sales and who spend 20% more per visit. As many of you may have not had a chance to see a WSS store, there is a short video that I'd like to play for the team to give you a sense of what the banner is all about. Our customers know who we are and what we stand for. WSS stands for authenticity and respect. For nearly 40 years, we've been the spot our communities and customers can trust for all their needs, and we pride ourselves on being a true part of the neighborhoods we serve, telling their stories their way. Making meaningful connections in one place that has it all. Which is why, since 1984, WSS has emerged as the best neighborhood shoe store, and we're only getting started. All right. With energy like that, you can see why we're excited about the future of WSS. With a focus on the Hispanic family, we have very favorable demographic trends and spending habits to anchor our growth over the next several years. The Hispanic population is expected to grow over 30% in the next 20 years, adding 10 million people to the U.S. population in the next decade alone. It'll ultimately represent 25% of the total U.S. population in the medium term. Importantly, Hispanic consumers tend to shop more in stores and spend more than other consumer segments on the footwear category. As we position to capture that growing population and spending power, we see the opportunity for over 300 WSS stores over time. Our desire to scale the WSS brand into new markets and also fill in opportunity trade zones within existing markets is backed up by strong four-wall economics. An average WSS store requires a net investment of approximately $1.7 million. With year three planned revenues of nearly $5 million per store and a 15% four-wall operating profit, these stores generate a 40% ROI and take less than three years to pay back. What gives us confidence in the growth trajectory is how successfully this concept has traveled from the home market of California to new markets like Phoenix, Dallas, Houston, and San Antonio. Our newest market, Miami, is coincidentally opening tomorrow, and we'll have five stores open in the Miami market by the end of Q2 this year. With a strong and unique value proposition, a tremendous amount of white space, a growing market segment, and strong unit economics, we see a clear runway for profitable growth. This year, we will open at least 25 new doors, and we will accelerate that growth beyond to 40 stores a year in 2024 to 2026 to get to at least 280 stores by the end of that period. By 2026, we forecast our revenues for WSS to be $1.3 billion, a 20% CAGR over the next four years. The second acquisition we made in October of 2021 was the atmos banner. In atmos, we gained a brand that has a very strong market position in Japan, the third-largest sneaker market in the world. Atmos as a brand is incredibly well-respected by the sneaker mavens across the world, and it's also sought after as a product collaborator for exclusive footwear drops and retail experiences. We bought a business that has a great omni-channel composition and is also quite profitable. Atmos has the highest digital penetration of any of the banners in the globe at 50%, and it also delivers strong double-digit profitability. Our objective with atmos is to grow the banner at a high single digit to low double-digit CAGR to over $250 million annually while maintaining the strong profitability that it delivers today. That growth will largely come from comp growth in the home market of Japan, as well as strategic investments in North America. Meanwhile, atmos plays a strategic role in our portfolio that's enabled due to its relative size and agility, and we'll continue to use atmos to test new store and digital experiences. We'll also look to atmos to pioneer new product ideas at the highest level of sneaker culture, and that includes collabs and exclusive concepts, as well as a premium private label brand, the atmos label, which brings a unique Japanese streetwear aesthetic. That takes you through our banner portfolio and how we've architected our retail banners to serve more consumers with more sneaker choice while having very distinct roles for each of those banners with consumers, minimal real estate overlap, and a path to total revenue of over $9.5 billion by 2026. To take you through even more detail on our real estate and store plans, I'd like to introduce Tony Aversa, our Senior Vice President of Store Development. All right. Thank you, Frank, good morning, everybody. As Frank noted, I'll be taking you through the second part of powering up our portfolio, which is transforming our real estate. The way we'll do this is three key strategies. First, we'll be scaling new concepts with bigger footprints to offer more engaging experiences with a broader product assortment. Second, we'll be strengthening our portfolio off mall while also optimizing risk and rationalizing underperforming stores. Third, we will optimize our international portfolio with key focus on European markets and transitioning Asia to a licensed model. Let's start with scaling new concepts. We'll expand our new formats to deliver uniqueness and reach in the marketplace. The first of those formats are community stores. Community stores are a 15,000 on average sq ft best-in-class expression of our Foot Locker brand. They offer tailored assortments and experiences relevant to the local communities and neighborhoods that we serve. Great examples of these community stores would be Compton in the Los Angeles market, Sixty-Ninth Street, Upper Darby in the Philadelphia market, our newest addition, Mondawmin in Baltimore City, and from an international flavor, we have Saint-Denis in Paris, France. These are meaningful expressions in our communities, and our activations truly inspire and engage. As Mary noted early on, these community stores also offer first-time job opportunities for much of the community, which is extremely important. The second concept that we'll scale will be power stores. 10,000 sq ft on average, but a similar positive and powerful expression of our Foot Locker brand. You'll find these in shopping centers, high streets internationally, and A and B malls across North America. They offer a full family assortment with broader reach, and it allows us the ability to expand our product assortment. This concept unlocks our ability to be more things to more people. Examples such as American Dream in Northern New Jersey, Arden Fair in Northern California, and most recently, our larger square footage power store in the Dallas-Fort Worth market. These stores are seeing a significant increase in suburban consumers with increasingly higher household incomes. This is showing that we can have a broader reach at Foot Locker. Our last concept to scale is House of Play, a larger format Kids Foot Locker at approximately 7,500 sq ft. This design offers elevated storytelling and product presentations. Engaging experiences have already proven to be a hit with our kids and their parents as we recruit our next generation of Foot Locker families. We are extremely excited by these concepts, not only because they're achieving top and bottom-line plans, but because they're driving higher net promoter score and overall customer satisfaction. These new concepts allow us to stay focused on our core consumer while also acquiring new, as both Mary and Frank noted. Currently, these formats represent approximately 120 stores in our portfolio, and we will grow them to 400+ by 2026 by opening up 300 new concept stores in the future. Next, I'll talk about strengthening our portfolio. As we lean into the newer formats, as I discussed, to drive demand and connect with new customers, we will also rationalize our store base, closing a meaningful amount of underperforming mall stores in North America. From now through 2026, we will close approximately 400 stores, including nearly 200 C and D malls and 200 of our lower performing A and B malls across North America. We will also look to reduce our term in those C and D malls to one and a half years, offering us flexibility and optionality with our partners. These 400 stores represent nearly 10% of our total sales, but they also average 800 basis points less in profit than the rest of the chain. This will result in 80 basis points of total margin improvement for the company. As we think about malls and we talk about malls, I wanna focus on A and B malls for a moment, where we have seen sales growth over the last few years. Now, traffic has decreased by 6%, but that's due to increased customer discovery and pre-shopping on their mobile device. The good news is this creates intent, which is evident by our 8% increase in conversion since 2019, more than outpacing the traffic declines. Thus, the result is an 8% increase in sales across these centers. This sets up very nicely for us to expand in these centers with our PowerStore concept into the future. Lastly, I will quickly touch on optimizing our international portfolio, and we're going to do that in two different ways. First, optimizing our footprint, second, tailoring our growth by region. In Europe, we recently announced the shutdown of Sidestep to focus on our Foot Locker banner to continue that focus. We will spend against key market opportunities in Europe with 2/3 of our capital being spent in key countries. Larger footprints and the expansion of our power and community stores will also be a focus in the region. In Asia this morning, we announced the closures in Hong Kong and Macau, and we're also converting our own Singapore and Malaysia stores to a license model in partnership with MAP Active. This, along with our other strong partnerships with the Alshaya Group and Fox Group, will allow us to further grow in the markets across the EMEA regions and Asia-Pacific regions. Quickly, let me tie this all back together for you. We will power up our portfolio, and we'll do it by transforming our real estate. We're gonna optimize our store counts down approximately 10% through 2026 to 2,400 stores. We will increase our square footage by 10% to over 14 and a half million square feet as we open up larger, more experiential expressions of our brands with a wider product assortment. New formats will surpass 400 locations and represent over 20% of our square footage. Foot Locker will play a key role with community and power stores. Kids Foot Locker will play a key role with the growth of House of Play. We will increase our off-mall penetration to over 50% in North America. As Frank noted, the strength and the growth of WSS, which is 100% off-mall catering to the Hispanic community, will play a major role there. All of these actions will provide us a much stronger real estate foundation as we Lace Up for the future and I couldn't be more excited to lead this team. Now I'll hand it back to Frank so he can talk about our third strategic imperative, which is deepening our relationships with our customers. Thank you. All right. Can we hear me this time? Perfect. Thanks, Tony. All right. As we build an even stronger fleet of stores across our global footprint, we'll also continue to evolve how we engage with customers from a marketing and a digital standpoint. Our third strategic priority is to deepen our relationship with our customers. Our objective here is to build personalized relationship with customers driven by data and insights and supported by a world-class loyalty program and technology. We know that doing this well will yield a higher shopping frequency with our customers and increase our share of wallet with them. Let me take you guys through our approach in this area. First, I want to acknowledge again that as we broaden our reach and use our respective banners to connect with a more diverse audience, it's critical that we get the right marketing mix by banner. This is by no means a one-size-fits-all exercise. To help us do that, we just completed our most exhaustive consumer segmentation study yet, which yielded a great baseline of insights about how our customers shop, how they consume media, and how they interact in a content-driven omni-channel world. That research study helped us learn that our core Foot Locker consumer, the sneaker maven and fashion-forward, are digitally native, highly engaged on social media, and enjoy cultural content and being the first in the know on all things sneakers. Those insights will inform our marketing strategies for the Foot Locker brand, including, for instance, a meaningful investment in social media and content creation. For example, as Champs Sports engages more directly with the active athlete, we know that product functionality, product fit, ratings and reviews, and personalized service are more critical to the customer relationship. Champs will distort its resources against the in-store experience, try-ons, and having more product-based information and content on their digital site and app. These are just a few examples of how our banners will customize their marketing mix driven by insights and data to drive more meaningful connections with their core consumer segments. Meanwhile, we know that we have a massive opportunity to uplift our loyalty program. Our current program certainly confirms and demonstrates the value of having engaged members. As shown here, FLX members spend 80% more per year than non-members, and we also know that they shop more frequently with us. We also recognize that our penetration of loyalty members lags competitive benchmarks significantly by a factor of three times. That means that we are leaving a big opportunity on the table to cultivate more profitable consumer relationships. In fact, we have to look no further than our own WSS loyalty program, which drives 85% of that banner sales to see how powerful and scalable our future loyalty program can be. We will reset FLX this year to be more meaningful to our core customers, but importantly, to be far more relevant and user-friendly to the new consumers that we aim to acquire. Let's review how it will change. Our current program was primarily designed to engage with a core sneakerhead who's driven by launches and high heat product and looking to get advantages to product access. While there's nothing inherently wrong with that benefit, it's certainly not comprehensive enough for our future consumer strategy. Our new program, set to test in 2023 and begin scaling in 2024, will be more valuable to more consumers by design. It will fundamentally pivot to be a points-based reward system based on the customer spend and hitting identified thresholds, which will then trigger an opportunity to redeem those points for cash against a future purchase. FLX will also offer exclusive product and service access for members only, gating those benefits and making them available to our members only, which obviously drives the perception and value of FLX membership. It will also leverage our personalization engine to provide custom incentives to drive incremental trips, increasing retention, buying frequency, and share of wallet. Our intent is to use this capability to be even sharper with our overall markdown and promotional budgets in the future. The new FLX program will also be more simple and transparent in design. This means easier for customers to sign up, easier for them to track their status in their account, and easier for them to redeem their points. In a few minutes, Peter will talk about our new digital app, for which FLX will be integrated into the design and user experience. Finally, there will be deeper integration with our stripers and store teams to drive sign-ups and member usage, including better recognition of members in-store so that we can provide more personalized service. Beyond the loyalty program itself, we'll also invest into a more robust and integrated MarTech capability that will enable personalization at scale for both our loyalty program and our digital marketing programs at large. Our ability to capture more customer data through our FLX program and our consumer data platform, combined with more sophisticated data analytics and machine learning, will yield more effective consumer communications and offers, allowing us to not only be more efficient with our spend, but also demonstrate that we know our consumers and make smart use of the data that they provide to us. Let me share an example of how we envision this coming to life in the near future. Success starts with our banners being able to do better customer identification and tracking of their shopping journey as they interact with digital media and our digital sites. In this example, let's say a customer would see and like a social media post by Foot Locker for a HOKA running shoe on Instagram. By liking this post, this customer, an identifiable and known customer in our loyalty program, would trigger a follow-up engagement. Our decision engine would then send them a personalized push message through the Foot Locker app. In this case, a message introducing a brand-new HOKA running silhouette that has just hit the market. This push notification would have a direct click to shop link and enable a seamless purchase for the customer if they're so inclined. Let's assume that they buy that HOKA shoe online at footlocker.com. After completing the transaction with the customer, we would update their purchase history and membership profile, and we would then turn to engaging them with an invitation to a community event. In this example, let's assume that customer lived in the Metro Dallas area. Our next action might be to invite the customer to their closest Foot Locker store to join other members for a Foot Locker run club event with free giveaways at the store. An email message with personalized imagery of a runner with HOKA sneakers would be sent, along with the offer of a free gift for attending as an appreciation for their loyalty and engagement. Of course, after attending the run, we'd invite them into the store to shop and use the occasion to introduce them to new footwear and apparel. Finally, as the last image on the right shows, knowing that this customer showed a high affinity for the HOKA brand and running category, we would, a few weeks later, send them a personalized email that showed them new HOKA styles and colors that they have not bought before. Certainly, if they had accrued enough points in their FLX membership to earn a cash reward, we would message them that they're able to buy the sneaker with the benefit of their membership reward. That is what good would look like in our new loyalty and personalization capabilities, and we're very excited about taking the leap to becoming a more modern marketing company. Now, our roadmap for loyalty and MarTech is a multiyear journey. In fall of 2023, we will pilot our new FLX loyalty program to gain learnings and fine-tune the processes. We'll also finalize the blueprint for our customer data platform, our decision engine, and all of our personalization tools. As we move into 2024, we'll launch the new FLX program across all of our North American banners, building on the learnings from our fall pilot. At that time, we'll also begin to roll out the personalization engine features, leveraging agile pods to pilot customer use cases and continuously generate new offers and engagements. Finally, in 2025, we'll expand FLX to our international markets to get the full-scale impact of that platform in Europe and Asia Pacific. By that time, we'll have fully adopted and operationalized our agile ways of working in order to leverage more machine learning tools and deploy our test and measurement protocols to drive and prove true customer incrementality. Taken all together, our medium-term aspiration is to generate at least 50% of our sales across our banners from members in the FLX program. This is a meaningful improvement over the next three years. We also have a longer-term aspiration to drive at least 70% of our omni-sales from loyalty members. It's a challenge that our team, led by our new Chief Customer Officer and new Chief Technology Officer, is very excited to take head on. So that wraps up part one of our presentation in which we've taken you through our first three strategic pillars. Why don't we take a 15-minute break, and we'll return to share our fourth and final pillar along with our long-term financial targets. Thank you, everyone. All right. Welcome back. Good morning, everyone. Happy to be here and really excited to share our 4th strategic imperative, being a best-in-class omni-retailer. You certainly heard the team reference the customer experience throughout the morning. For us, this imperative is all about creating pathways for our customer to engage and transact across channels and in any way they choose. We've spent a lot of time as an organization listening to our customers to understand their pain points, their passion points, and everything in between. This imperative is one that we feel can and will truly differentiate us in the marketplace. Before we go into the details of the plan, let's talk a little bit about opportunity. First, we know that we're trailing the broader market when it comes to digital penetration. We finished 2022 in the high teens, right around 17%, while much of our competitive set are in the 20s, and the broader marketplace is actually double that. There's a sizable gap for us to fill. We believe that as more digitally native customers continue to grow in purchasing power, and as we broaden the customers we're serving, we have a clear opportunity to increase our digital mix and most importantly, have that growth be incremental to our business, but we also know that our channels are highly complementary to each other. I'll share a few stats. 80% of digital sales happen within 10 miles of a store, and customers within that 10-mile radius spend almost two times more per person than the rest of the country. Those digital sales per person are almost 20% higher in the areas surrounding our new concept stores. So the power, community, and House of Play stores that Tony referenced earlier do an even better job of driving engagement and creating a digital halo in the business. Third, over 95% of customers incorporate the digital channel in their shopping journey. Whether that means drawing inspiration from a social post, using our launch reservation app before picking up highly coveted product, or engaging with our immersive brand and product stories through our articles, images, and YouTube videos, the digital channel is a key component of our customers' journey. Finally, almost half of all digital sales are aided by a store with services like shipping from our back rooms or using BOPUS to conveniently pick up product. Our two channels are already working together to drive growth. But the ultimate opportunity lies in our ability to drive more customers to shop across both channels. I'll share a couple more stats. Omnichannel customers spend more than three times more than single channel shoppers. They're more engaged, they're more committed, and they're spending more of their wallet share with Foot Locker, Inc. They make up a relatively small portion of our customer base today, only about 7%. Many of our peers are two to three times higher than that. So unlocking the omni customer creates a strong tailwind to our business. Let's talk about the priorities we need to execute to get us there. You guys have probably been sensing a theme throughout the morning that our company and our Lace Up Plan are all about the customer. We wanted to start the omni conversation with the customer journey in mind. We tried to keep it simple. We're gonna focus our energy on creating powerful and seamless touch points during the pre-purchase, purchase, and post-purchase experience. We're gonna remove friction, add features, and ultimately provide our customer with a more integrated and enjoyable shopping experience however they choose to engage with us. Let's dive into some of the details. First, on pre-purchase. We'll start with another stat where we believe there's opportunity, and that's around discovery. We're currently trailing our peer set by 1.2-1.4 times when it comes to the amount of time spent on our digital properties. As we begin to broaden our customer base and provide them with more choice, we believe a more dynamic and personalized experience will drive discovery time up, and that time will ultimately turn into revenue. Here are some of the top priorities. First, improve search and navigation to drive relevancy with a more predictive and engaging search algorithm. Improve navigation to highlight new brands, additional colorways, and create a more seamless and intuitive shopping experience. Second, we're gonna leverage the great content that our industry creates to tell better stories, provide more detailed and engaging product visuals, more in-depth rating and reviews to help our customer find the perfect pair. Finally, we're gonna leverage product recommendations driven by past browsing history, trending items, and our global history of purchase behavior to drive more discovery around new products and brands. We've already begun taking steps in this direction with small, iterative changes to the site and app, and feel really confident in the direction that we're heading. From a purchase perspective, we believe we can create a strong tailwind to improve conversion with a few key investments. The first, near real-time inventory. By 2024, we expect to have our inventory synced across stores, DCs, and our digital channel to give the customer and our stripers a near real-time picture of not only what's available, but where it sits in the network and how we can get it to them. Second, this year, we will scale new handhelds and upgraded networks across our entire fleet to provide our stripers with the ability to access that inventory picture, access product information, and provide customers with a more seamless checkout experience for purchases in store and if the product is not in store through one of our digital properties. Third, we're gonna relaunch the Foot Locker app to drive energy, commerce, and connectivity across our customer base. In 2022, over 80% of our traffic came through mobile, so our customer is telling us how and where they want to engage. It's on us to make sure that experience is immersive, drives loyalty, and ultimately connects our customer to the category and the products that they love. Finally, on post-purchase, we're gonna leverage the combination of our digital properties and our physical footprint to create a more frictionless fulfillment experience. We're gonna focus our priorities on flexible fulfillment options by accelerating our global rollout of BOPUS this year and introducing expanded and expedited shipping options across the globe. We're gonna create a more seamless return process between channels, and we're gonna create clear order transparency and communications so you know exactly when and where your product will get to you. The key stat here that we think tells a pretty significant story is that our store NPS is about 1.5 times higher than our digital NPS. We believe that by creating focus and prioritization along the customer journey, we can create parity in how our customers experience our brand in stores or online and drive significant growth for the organization. What does that growth look like? Our aspiration is to achieve a 25% digital mix by 2026, close to $2.5 billion in digital sales. I know we've been talking about omni throughout this section and a lot throughout the morning, but we feel the best measure of success will be our ability to better balance the mix between channels and drive our digital penetration up higher than it has been historically. This is gonna be a journey. It's not gonna happen in one month or one quarter. It's gonna require a multi-year strategic roadmap across our technology and supply chain infrastructure to get us there. But we're confident that we can get there. A big piece of that confidence comes from our next presenter, our Chief Operations Officer, Elliott Rodgers, who will outline some of those key enablers. Thanks, Peter. Now that we've talked about our omnichannel aspirations and the strategies to achieve them, let's talk about the supply chain and technology enablers. Let's start with supply chain. We've made enhancements to our U.S. supply chain network to improve flexibility, speed, and efficiency while significantly improving our ability to meet customer expectations. We have rapidly evolved the network from two centralized single-channel DCs to three regional omnichannel DCs that service markets in their respective territories. Consequently, we can now service 95% of our stores and customers within two business days. Our new omnichannel network allows us to leverage inventory across all locations to fulfill customer demand, enabling a buy anywhere, fulfill anywhere experience. We will make similar advancements to our supply chain network outside of the U.S. to achieve parity within the markets we operate. Our multi-year supply chain roadmap will enable our omnichannel growth strategies. We recently opened an automated DC in Reno, Nevada, to better service our stores and customers on the West Coast. This investment will drive efficiency and has reduced shipping times to the service market by 50%. We will continue to upgrade our DC network globally while leveraging supply chain partnerships to extend our capabilities. To enhance our omnichannel convenience offerings, we will further optimize our end-to-end product flow and create the near real-time visibility of inventory that Peter mentioned. This visibility will yield many benefits, such as better aligning our e-commerce estimated delivery promise with our actual delivery times. This strategy will be underpinned with technology investments ranging from data and analytics, to inventory management, to robotics and automation, all focused on creating a resilient, reliant, and responsive network. Speaking of technology, we are committed to a multi-year technology investment plan to achieve our omnichannel and broader growth aspirations. Over the last decade, we have invested at a level below the industry benchmark. We will increase our investment to be at or above 3% of sales and increase our CapEx by 50% over the next four years. This acceleration will not only be an enabler of growth in our digital channels but will create a more efficient, nimble, and digitally enabled organization. Our digital transformation will create a more agile, modern platform. The improvements will not be limited to technology. They will include improvements to our processes and ways of working. We will move from legacy platforms with heavy customization to a modern architecture that is scalable and future-proof for growth. We will evolve to a more agile product and platform operating model that delivers capabilities and personalized customer journeys with a faster speed to market. Through this transformation, we will reduce our technology debt and emerge with a stronger technology core. We have launched a multi-year plan to elevate our technology foundation and accelerate our digital capabilities. Recent improvements include extending our FLX program to Canada, launching buy online pickup in store in the U.K., and introducing express shipping from Foot Locker stores in the U.S. We have launched a digital win room along with product teams across key experience areas, including search and browse, loyalty, and launch, and are already seeing encouraging results. After introducing recent enhancements, we've seen year-over-year NPS improvements of 14% across digital purchase and fulfillment. We believe that with our focused three-year roadmap and key priorities of strengthening our foundation, reimagining our tech operating model, and transforming the customer experience, that we will be well-positioned to achieve our strategic imperative of being a truly best-in-class omnichannel retailer. Now, I will bring up Robert Higginbotham, our Interim Chief Financial Officer, who will tie this all into our financial outlook. Thank you, Elliott. The plans we are presenting to you today are meant to create value for all of our stakeholders. That's our community, that's our team members, and of course, our investors. In the communities that we serve, we will continue to invest in Black-owned businesses through our commitment to our LEED program, invest in scholarships in under-invested communities, as well as donate our time, funds, and product to charities we hold dear. We are also creating value for our team members, our people. We do that through empowering our people and transforming the way we work. We empower our people by creating mobility in multiple ways, including promoting from within, and in doing so, are dedicated to a culture of diversity. Secondly, we have our Ignite program, which includes our cost optimization work, but is much more than that. We are changing the way we work through deep engagement and collaboration, making us more nimble and building an always-on capability and mentality when it comes to driving efficiency. There's, of course, our investors. You've probably all skipped ahead to this section if you've got the slides online, but I'll go through it anyway. To summarize our financial vision at a high level, our goal is to be over $10 billion in revenue with over 10% EBIT margins. That extends beyond the 2026 timeframe that we'll flesh out in more detail in a moment, but this is our long-term ambition. The path to get us there, again, is to simplify our business, invest in our core assets and capabilities in order to drive sustainable growth. What that means is that 2023 will be a reset year for us as we absorb changes to the business, exit certain businesses, optimize our store footprint, and accelerate investments. When it comes to simplify, we've taken two key actions in our international operations. First is the wind down of our Sidestep banner in Europe, which involves closing 70 of those 80 stores while converting the other 10 to the Foot Locker banner in the region. The benefits are clear. It will give us a sharper focus on our core brand in the region. It will simplify our overall operations, and we'll have significant financial benefits. This was a $100 million top-line business, but it was losing $10 million a year. It will cost us $25 million to exit the business. That's part of the reset dynamic in 2023. Then, it will give us over 10 basis points of margin accretion going forward. We are also transforming our Asia business model by moving from a mostly owned and operated model and shifting to a mostly licensed model. We still see tremendous growth potential for the Foot Locker brand in Asia, but have made the strategic decision to lean into our partnership with MAP Active to leverage their scale and expertise in the region to drive that growth, so that we can focus on our more developed markets. What that means is that the current profile of 30 owned stores that are losing $30 million a year will evolve into a model where by 2026, we will have 15 owned stores, but 130 licensed stores that generate over $15 million of licensing revenue that falls mostly to the bottom line. We will then be taking that increased focus and more targeted capital to invest in our core. Our average annual CapEx run rate will increase by over $50 million over the next few years as we lean into the new store formats that Tony talked about, as we lean into the building, the technology capabilities that Elliott talked about. That means that the tech expense that flows through the P&L will increase by about $80 million a year, which will be an over 50 basis point of margin investment that we'll use to drive growth. We will fuel that investment through our cost optimization work. A year ago, we announced a $200 million cost savings program opportunity that we identified in SG&A that we would flow through to the bottom line. Since then, through our Ignite work, we've identified another $150 million of savings coming from merch margin and occupancy. So we now have a $350 million cost savings program, still with $200 million falling to the bottom line, but now with $150 million to fuel our growth strategies. What that means for the path of our earnings growth is that 2023 will be a reset year for us, with earnings down 30%. But as our growth initiatives gain traction, as our investments continue, but then our cost savings work start to more than offset that, we see sustainable growth beginning in 2024 and continuing into the future. In 2023, our reset year, we expect sales to decline by 4.5%-6.5% on a 52-week basis. Our closing of Asia stores, Sidestep, Champs rationalization, offset by ongoing growth in WSS, will result in about a 9% store count reduction. As we open bigger stores, our footage will decline by a lesser 4%. Given the timing of the closures and the productivity differences of those stores, they will only have a 1% impact to sales for the year. We expect comps to decline by 3.5%-5.5% this year as we absorb the change with Nike before returning to growth with that brand later in the year, and as we reposition the Champs banner. Comps will be down mid to high single digits in the front part of the year and improving to down low single digits in the back half of the year as our growth initiatives start to take hold. which gets us to the down 4.5%-6.5% total top line on a 52-week basis, and then the extra week adds about one point of sales growth to that. Our EBIT margins will be down significantly in 2023, given the reset, as our cost save work is more than offset in the near term by our investments, some ongoing promotions in the early part of the year, and deleveraging the business on the sales decline. From the 7.9% level in 2022, our cost save program will add about 160 basis points. Our technology investments will then see the biggest pickup in 2023, and we're also investing nearly $40 million into wages for our frontline associates. Together, those two factors will result in a 100 basis point drag on margins. Promotions weighted toward the earlier part of the year will be another 100 basis point drag. A meaningful deleverage of 180 basis points on down comps takes our 2023 EBIT margin to 5.7% on a 52-week basis. Tying all of that together, here's our full guidance for the year, including the extra week. With an EBIT margin, our gross margin will decline by 90 to 110 basis points on promotional pressure and occupancy deleverage. We expect SG&A to deleverage by 80 to 100 basis points with investments offsetting cost saves in the near term, plus the underlying deleverage on the down comp. As we mentioned as our reset year, our EPS will decline by 30% to a range of $3.35-$3.65, including $0.15 from the extra week, which embeds minimal buybacks for the year. Now, looking beyond our reset year and into 2024 through 2026, we plan to resume robust sales growth as we expect to at least keep pace with our growing market going forward. Our store base will decline by about 1% a year. With that same dynamic of opening bigger stores, our footage will actually be up 5% a year as a company. The Foot Locker banner will grow a bit below that average. KFL, with the growth opportunity that Frank described, will grow above that average. Champs will continue to rationalize its store base as we move towards that $1 billion top line target. WSS will continue to grow at about 20%. Atmos will grow, but at a modest pace. That incremental footage, by the way, given its bigger boxes, will come in at roughly half the sales per foot productivity versus the company average. When combined with the comp outlook of 3%-4%, we see total sales growth of 5%-6% starting in 2024 through at least 2026. Combined with that top line growth trajectory, we expect significant margin expansion from 2023 levels and see a path to 8.5%-9% by 2026. Let me walk you through those drivers. Technology spend will have a modest drag as those investments continue, but our sales begin to grow. Then, our cost savings will really start to shine through, where we expect to see about 170 basis points of impact. Then, the Sidestep and Asia exits will help our margins by about 30 basis points. Our store rationalization will add another 80 basis points, as Tony mentioned. Our improved licensing revenue stream will add another 15 basis points and then l everage from our top line growth will add another 20 basis points to get us to that 8.5%-9% range for 2026, but that will not be the end of our journey. Beyond 2026, we see potential for us to reach 10% or higher EBIT margins, driven by us continuing to optimize our real estate mix, cover further cost saves, optimize our mix of fulfillment, and leverage expenses as we grow the top line. As part of our growth plans, we are establishing a more explicit and targeted approach to capital. When it comes to investing in the business, going forward, we will be less focused on external sources of growth and more focused on organic growth and core capabilities, our new concepts, digital, technology, all the things we've been talking about today. That means we will be less focused on M&A activity and on minority investments. Now, that doesn't mean we're closing the door entirely on M&A, especially when it comes to buying new capabilities, but it does mean that we will be focused on internal investment first. In terms of returning cash to shareholders, we are committed to a stable but growing dividend, which we will target at 30%-35% average payout over time. On buybacks, apply a more consistent approach, targeting a low single-digit lift to EPS annually starting in 2024. The result of all of that is our 2024-2026 earnings growth algorithm. That's 5%-6% total sales growth on a 3%-4% comp and 5% footage, reaching 8.5%-9% EBIT margins. Together, that's high teens to low 20s EBIT growth. With buybacks adding a low single-digit lift to that, which gets us to an average EPS growth in the low to mid-20s. Altogether, that puts us on a roadmap for over 25% annual total shareholder return through 2026. Our sales growth, margin expansion, buybacks will drive that low to mid-20s EPS growth. And then combined with our current dividend yield of 3%-4% would result in an attractive TSR of 25% or greater. Let me end by summarizing the key elements of our new growth plan. Overall, we will simplify our business, invest in our core in order to drive sustainable growth to achieve over $10 billion of revenue in the long term. To get there, we will expand sneaker culture through more occasions, more choice, and greater distinction, increasing our exclusive mix to over 25% of sales, increasing our non-Nike sales mix to over 40% while also revitalizing our growth path with Nike. We will power up the portfolio by creating more distinction among banners, closing underperforming stores, expanding our off-mall footage to over 50% in North America, and increasing our new format footage to over 20%. We will also deepen our relationship with customers by reimagining our loyalty program and increasing our sales penetration of loyalty from 25% today to 50% by 2026 and then to 70% longer term. We are making a firm commitment to be a best-in-class omni-channel retailer, including a rich digital experience for our customers, targeting digital penetration of over 25%. The financial output of which will be 10% or better EBIT margins long term, attractive returns on capital and our low to mid-20s earnings growth algorithm. With that, I'll bring Mary back for some closing comments. Okay. Thank you all for your time and attention to our Lace Up plan today. I know there's been a lot to digest. I have complete confidence that we can deliver this plan, and I can't tell you how excited I am to lead the transformation of this company. We have, I would say, a few things to remind you about. We're in an amazing industry. We have strong partnerships with our brands, and we are clear-eyed about the actions that we need to take to simplify and make our business more efficient. That said, we are just as clear about the possibilities ahead. As we begin to execute against these strategic imperatives and get after our Lace Up plan, we believe we truly will unleash the inner sneakerhead in everyone. This team is a team that's ready to take the field and win. I have to tell you, I couldn't be more proud or excited to lead this organization. The folks at Foot Locker have love for the customer, the category, and our store teams that is truly unmatched. So 2024 is our 50th year, and we are focused on lacing up for the next 50 years of growth. Let's go. Thank you so much. We're gonna take a one-minute break and then come back and do Q&A. Thank you. I'm Olivia Mata, VP of Corporate Communications. We're now at the QA portion of the conversation. We have mic runners who are placed throughout the room. Motion to one of them. They're at the back of the room. Motion to one of them when you have a question, and they will make their way over to you. I will let you know when you have the floor. We have 45 minutes for discussion. We're gonna try to field as many questions as we can, so we ask you to please limit yourself to one question. Before asking your question, please state your name and the name of your firm. Let's get started. Hi, good morning. Kate McShane from Goldman Sachs. Thanks for the great presentation today. Just with the focus on loyalty, we had wondered what the role might be in linking loyalty programs with some of your vendors, as we've seen from some of your other competitors. Great. Okay. Thank you, Kate. Thanks for being here today. I'll start broadly, which is that, as I think Frank said well, we have a big opportunity with loyalty, and we're very excited to really go after the opportunities to really use that tool to broaden beyond access to launch, but really to reward, you know, customers for their loyalty and grow share of wallet. In addition, it's gonna allow us to unleash new capabilities using CRM, just a much more personalized manage and over time. Absolutely, the way I think about this with our brand partners is, one, we already share some data and insights with our brand partners today to help them understand, you know, how things are going. Our ability to connect a loyalty program is contingent on our ability to have a better loyalty program than we have today, right? More data, more richness, more agility. Over time, I think about it in two ways. One is that we'll absolutely work with our brand partners to help drive profitable growth for all. I think we mentioned this, but with Nike, we plan over time to have a connected loyalty program, but it's just too early to, you know, to do that today. We're building a path towards that. Thank you. Okay. Hi, John Kernan from TD Cowen. Mary, how have your conversations with Nike and Jordan Brand gone since you've joined the organization, what are you most excited about? How are things changing with that relationship? Thank you. Yeah. You know, as I talked about this at the beginning, I would say that, you know, to me, and one of the things at Ulta Beauty that I did was develop brand partnerships across a broad range of types of companies, and that's critical as a multi-branded retailer. With Nike from day one, as I said, you know, the company welcomed me to the industry, and we've been spending a lot of time revitalizing our relationship. I'd say, you know, kind of stepping back, you know, we expected that post this period of reset, we would go back to growth, and that will happen starting at holiday of this year. What we've been doing is having very constructive conversations about what we uniquely bring to the marketplace as a multi-branded retailer that connects with customers in different ways. In fact, not everybody wants to buy online. In fact, most people in this category like to come into a multi-brand shopping kind of situation. We play a unique role there as well as our credibility and connection into sneaker culture. Then what we did is really focus on areas that we could really mutually drive growth. I know Chris talked about this, but whether it's basketball, sneaker culture, kids, these are areas that are unique strengths for Foot Locker that are important to Nike as well. I would say Nike, probably like all of our brand partners, is excited about us also raising our games in terms of all things, you know, as a retailer, being even better at omnichannel and digital. At a high level, I will ask if either one of you guys wanna add more, please do. That's been the context of the conversations. Chris said, you know, showed a lot today. I'm very excited about the plans that we have going forward, with Nike as well as our other brand partners. If there's anything you guys wanna add. If not, it's okay. I'd just say coming through the period of COVID, there was just a lot of uncertainty about consumer supply chain. Obviously, product innovation was somewhat impaired through that period. Now that we have, I will say, clarity, but where there's a clear road and path to where the consumer or what the entire ecosystem and supply chain looks like, and then to Mary's point, the continuity of consumer strategies. It's all driven by being complementary, having transparent, open, and long-term strategic conversations. It's not a season-to-season allocation conversation. It's about how do you mutually create benefit for consumers. She outlined the three sharp points, the scale of our fleet, our access to consumers who love sneaker culture, our position around kids, and just the authenticity and our ability to authenticate things in sneaker culture is valued by Nike as well as other brand partners. Hi. Thanks. Lorraine Hutchinson from BofA. I wanted to dig into the 3%-4% long-term same store sales target a little bit, understanding this is a reset year. Can you talk a bit about how you think about getting exclusives, driving e-commerce growth, and then kind of square that with what we're hearing from a lot of the athletic brands and their interest to have more of a DTC approach? Yeah. If you guys don't mind, I'll start high level on this, and then, you know, Rob, you can direct from there. You know, one of the things that I think is clear in most consumer categories, and we see this in sneakers, is that there's a role for both. There's a role for direct to consumer, and there's absolutely a role for multi-branded retailers like Foot Locker. It's because there's multiple needs that people have, and very few people are buying just one brand, and very few people are buying only online. Again, this is true for most consumer categories, that the combination of both in-store and online, those create your best shoppers because they're more engaged and they're spending the most. As we try to demonstrate today, you know, in this category, there's all sorts of opportunities for more people to participate in more ways, and that requires having multiple brands that you can browse and look at and learn about, right? When people come into our stores, they love that ability to browse and look as well as get, you know, insights from our stripers who are really knowledgeable. That doesn't mean that DTC for brands isn't also important. I think they both are important, and that's... I think we play a unique role in the ecosystem. What I would say is that as it relates to our growth plans, and Rob, I'll let you go take it wherever you want from here, but, you know, we know that all the things that we outlined today, which relate to how we think about relaunching our brands, our brand access, our tools to create our own demand around loyalty, better e-commerce, CRM capabilities all add up. Really optimizing where we place those resources, right? Thinking about the best growth banners and putting our resources there drive that growth that we're talking about. We're expecting to grow at least with the category. It's a great growth category. We have tools in place that we believe can also drive market share growth beyond that. Yeah. Just add on from e-commerce. When we talk about our digital penetration going from 17%- 25%, to be very clear, that's not about shifting dollars from the store to the e-com channel, rather that we see that as true sales incremental dollars. One reason we're confident in saying that, going back to some of the information that Peter presented, our conversion rate is 3.5 times below or our peers are 3.5 times above our conversion rate. We know that we're leaving money on the table through our digital channels, and we don't think, and certainly don't see those lost transactions making their way to our stores. If we can close that conversion gap, we're really confident that we can not only hit that penetration target but actually do that through incremental sales dollars. Hi. Thank you. Jay Sole from UBS. My question is just on Champs. Can you maybe just elaborate a little bit on the repositioning, talk about where Champs has been, you know, in terms of what it stood for versus where it's gonna start, where it's gonna be going forward, and then, you know, when you see the stores reset, where do you see that banner eventually going? Thank you. Great. You want me to go to that? Little bit of history here. Champs was actually the first sort of sporting goods retailer, but on a mall, like hard goods, tennis, string and rackets, roller blades, et cetera. Through the, through the shift in the 90s and 2000s sneaker culture, you know, grew, and it became a bigger part of Foot Inc's business. You know, we gravitated some of that assortment more towards, I'd say, lifestyle and the apparel business. Now, with the clear, you know, positioning of Foot Locker and the sneaker maven and the fashion forward, we wanna kinda put Champs really honestly back into its some of its heritage and its root going after that active athlete. That's not to say that a fashion forward can't shop at Champs, but when you think about the assortment being grounded in footwear, apparel, and accessories, both performance and then what we call the look of athleisure, that's where the assortment's gonna pivot. The store experience, our service model, how we update the digital sites and apps will be different than Foot Locker. I think about product fit, ratings and reviews. More detail on the functionality and performance of product will be really important. Showing apparel on model and photography, perhaps even having video at some point to demonstrate the look of sport is also gonna be critical. That's the difference, is it's not really a new place for Champs. In some ways, it's a bit of a back to the future in terms of where its DNA and heritage began. Mm-hmm. Great. Thank you very much, Adrienne Yih, Barclays. Great to see you, Mary. You too. Thank you so much for doing this. My question is on the exclusives. I wanna know, are they quite literally exclusives to Foot Locker, or are they exclusives across sort of the Nike's tier one partners themselves, maybe TKS as well as yourself? The number, the dollar number is kinda $6 billion from Nike today, right? It's probably $6 billion it stays there. What percentage of that dollar amount you know, kind of becomes more exclusive? Within that exclusive, can you talk a little bit about adidas? Where are they in the partner, and how do they play into the next year with Yeezy? Again, the exclusives. Thank you very much. Great. Thank you. Thank you, Adrienne. Is that three questions in one? No, that's okay. That's all right. I know that. I know how that goes. I'd like to direct that to Chris, who's really our product expert, to begin to answer your question. Sure. I'll take that. From a Nike perspective, it's a little bit of a combination of all of the above. Our Tuned Air franchise is an exclusive model that we have in ownership in the complete marketplace. There are some levels within basketball that are elevated, so just very top of the tier access, so a partner like Kids or Social Status or some of those. That is part of it as well. Primarily, all of our exclusive positions, we are talking about exclusive within the marketplace and a lot of exclusives we share with direct. It's going to be tough to have that level of pure exclusivity. It's really against the rest of the wholesale market when we talk about exclusivity. We feel really good about it. Basketball, we'll continue to lead, and when you get to adidas as an example, the basketball exclusivity, we'll launch Anthony Edwards with them in holiday of 2023. So we'll continue to drive our exclusivity pieces across multiple categories. There's also exclusivity across product concepts, so not everything's an exclusive model. So we may have a third-party collaboration. I mentioned L.O.L. Surprise! I mentioned the Cinnamon Toast with Crocs. So there could be product concepts that are unique, elevated executions that are exclusive to us. So we look at across all the different layers of exclusivity to really bring our consumer the best, either from a model or from a storytelling perspective. And ultimately... We use a lot of global access also because there's a lot of different layers that you can create globally, then provide access in North America or in Asia Pacific through things that are created potentially in Europe. All different lanes that we're looking across exclusivity. Some brands are higher than others. I think we've got a benchmark of 25%. Some brands will be higher, some brands will be lower, but we're pretty comfortable with where that target is as we go forward. Hi, it's Bob Drbul from Guggenheim. Can you spend a little more time on the WSS business? You know, it seems to be a very big driver of the top line, you know, with the new stores. Maybe, like, a little bit of color on the leadership team in place, you know, sort of the brand offering and how, you know, you really intend to grow that piece of the business. Just the second question is. I'll stop at two. I lost my train of thought. No, the second question is on the drop ship capability. Like, what's the timeline, you know, sort of brand receptivity you have in that capability for the business? Thanks. Okay. Let me start. That is two. Adrienne at least were connected to each other, the same questions. Now it's easier. It's fine. We're happy to talk about all. I'll just start at a high level, turn to Frank Bracken to give us some more color on WSS. Listen, this is one of the things I was thrilled to learn about when I joined Foot Locker is that acquisition. I mean, I think I have long been an advocate for really understanding the power of the Hispanic consumer, especially in the U.S., and the growth in that segment, I don't think enough companies really are focusing on really understanding that consumer segment. WSS does that really well. I visited some stores, seeing it in action, and we have a real connection, and every experience is bilingual. We have a true connection with the community. I think that's something to be really proud about. Obviously, demographics would suggest that there's a lot of opportunity for growth there. I think it's great that we have the focus on that. Do you want to say a little bit more about. Look, we finished last fiscal year at about 122 stores, a little over $600 million in top line, you can do the math at the store per volume. It is a dominantly store-driven consumer sell-through. Digital is a lesser penetration than our total company mix. You know, over 70% of sales come from the state of California, only in the last really three to four years have we expanded. Texas was the next biggest state that we started to penetrate. Houston, Dallas, we opened simultaneously about two and a half years ago, went into San Antonio earlier last year, and then we're opening up Southern Florida. If you look at the Hispanic population, where they currently exist, where migration and population growth is forecasted, there are plenty of growth pockets. We're very, very confident, and we've seen the productivity of the stores hold as we've come, you know, east, if you will, to Texas and now literally tomorrow opening our first Southern Florida store. We're very pleased. The assortment is all the brands that you would expect. It's Nike, Jordan, adidas, PUMA, Converse, Vans, et cetera, but typically at a lower price level, so more accessible price points. We see a lot more family shopping in the Hispanic consumer. It's typically driven by the mother or home category manager. Take care of the kid first. The husband, and then what's left goes for mom, and we see that dynamic. 85% of sales come from their loyalty program, it's an incredibly loyal consumer. Those locations are all off mall, and they're in the community. The market planning and site selection is critically important. It's arguably the most important thing we do. The second thing is just living up to the experience of respecting the community and the shopper, providing an authentic experience, and investing back in the community. Feel very good about the growth trajectory for WSS. The second question was on drop ship. I don't know if you wanna add anything? Was that your second question? Do you wanna take that, Chris? Yeah. I think from a drop ship standpoint, we really started developing the program a year ago, and it's been a nice program to start to broaden our reach and get some expanded SKU counts and some additional better utilization of our inventory from our brand partners. It's been a nice program for the last 12 months. It's not a significant part of the business, but it is something that can add some good consumer loyalty, add some better partnerships with our brands to better utilize our inventory, and we'll continue to do that as we go forward. Hi. Thanks. Alex Straton from Morgan Stanley. Two quick ones from me. The first is just on the trajectory down to 55%-60% of inventory for Nike. Can you walk us through how that's going to look in the next few years? Secondly, I wanted to understand the margin profile of kind of moving further into e-com and then also these non-Nike brands, if you can just break that down for us. Thank you. Yeah. I think we announced earlier last year that the reset of the relationship through the lens of allocation would continue through most of this year, 2023. Largely we'll anniversary that through the third quarter, and then holiday and really in 2024 is the level set and then the return to growth with Nike. As we go through that, we saw about a 5.5-6 point mix shift of vendors last year. We continue to expect to see, if not similar, but a low single-digit shift in the mix in 2023. In 2024, you know, honestly, we haven't seen and been presented those assortments yet, so we'll have to sort of let our buyers and ultimately the consumer decide where it settles, which is why we've given ourselves a little bit of wiggle room. I think the good news is that our ability to now go in across all of our vendor partners and buy best available, best offer, and what we think the consumer wants based on our segmentation, is what's exciting to us. As a multi-brand retailer, you know, that's what it's all about for sneaker culture. We're really enthused by that. I'll touch on the margin aspect. For the brands, we don't talk about margin differences by brand. We have said in the past that some of the product that we'll have less units of going forward do carry directionally a bit better favorable markdown dynamics, so a bit better margin there. There'll be a bit of a drag there, but it's really not a meaningful amount. On the e-com side, there's a bunch of puts and takes there, but all in, it's really EBITDA margin neutral, given that the merch margin drag, there's a bit of a merch margin drag because fulfillment costs are higher for that channel as opposed to the store. With the work that Elliott's doing to minimize that drag going forward, but then also with the fact that, again, those are all incremental sales, we'll get the leverage of both occupancy and SG&A to offset that such that it's EBITDA margin neutral going forward. I mean, I would just add that the e-commerce unlock is really big for us. I mean, only 7% of our shoppers today are omni-channel shoppers, and like, again, we see across retail, those are the best shoppers. They spend three times more than somebody who shops in just one channel. You know, as well as being margin neutral, it is an unlock for growth for us. Hi, Cristina Fernández from Telsey Advisory Group. I have two questions. How does private label and apparel play into your merchandising strategy? In the past, you've spoken about, you know, expanding those two. The second question's from the real estate side, the new Foot Locker that you wanna test next year, and then scale in 2025, I guess, what do you need to see? Why not sooner? You know, why would it take kinda two years to develop that new store format? Why not sooner? I like that. I think I've heard that before. Do you wanna try private label? Yeah, I'll take the private label one. We're very encouraged by our private label development. We've launched multiple brands over the last couple years. Locker was launched for Foot Locker. Cozi was also launched from a women's perspective, in addition to our long-standing business with CHG at the Champs banner. As we really develop our apparel business, private label will become a bigger, broader component of that. I think as we develop our footwear business to be more brands across more categories, we have a lot of opportunity in apparel through private label to really address those opportunities, whether it's from a performance or lifestyle perspective. Certainly, the broader footwear reach creates a lot broader apparel opportunity, and we're gonna focus most of that broader apparel opportunity through our private label area. We're really optimistic about where our business is going. We've created a team to really focus on that of really outside experts to really come in and help develop us, develop the private label business. We're pretty encouraged about where our results were a year ago and our go-forward plans with that. Yeah. Just on the retail concepts, recall, I think Tony presented the Power Community and our House of Play. Those are relatively new concepts that we're gonna continue to invest in this year and in 2024. The store of the future in many ways is informed by what we've learned, you know, up until this time and for the next 18 months as well. The top spin, I will say, is that we're gonna have global alignment and synchronicity. That's one of the things that I noticed coming into a global role is that as we looked across North America, Western Europe, and some of our Asian, the consistency of the store format, the assortment presentation, fixturing, which drives cost to build out, and then also the integration of technology was not consistent enough. The one of the goals is really to synchronize the store experience globally as best possible, of course, allowing for local adaptation as necessary. Also, we're not slowing down on Power and Community store. I think we shared that they're outperforming the balance of chain and outperforming our internal targets, so there's plenty of upside in the next 18 months as we continue to scale. Hi, good afternoon. Gabriella Carbone, Deutsche Bank. Was wondering if you can just dig a little deeper into your plan to sync inventory across channels and how you expect that to improve your markdown efficiency and inventory allocation over time? Thanks. I can jump in here. I think you heard us call it out in the presentation, but that idea of getting to a near real-time inventory picture is really powerful for our business. You can imagine it coming to life from both channels, right? In the store side, as we equip our stripers with handhelds, we actually see some pretty nice productivity metric increases, think up to 100 basis points in conversion, 150 basis points in NPS increase. It's more productive, and it is actually creating a better experience, and it's allowing the striper to access the product that sits in our DCs and on the web and service the consumer with it if we don't have it in store. The other side of that, when consumers are shopping online, as we sync our inventory across all the different nodes in the network, they're gonna be able to access product that is sitting in a store or sitting somewhere else in the business. It's really about creating visibility of inventory for the consumer across both channels. Hi, Janine Stichter from BTIG. I wanted to ask about the additional $150 million of cost savings you identified. I think there was 50% that was the merch margin piece, and it was broken down into pricing optimization and supply chain efficiencies. Curious particularly about the pricing optimization. Is that more on your private label piece of the business or where that's coming from? If you could also dig a little bit more into the supply chain efficiencies, where those are coming from as well. Thank you. Elliott, you wanna take that? Can you hear me? I think if you think about, we talked today about the -- you heard us talk about transformation. When we talk about cost, I think it's important to highlight that, you know, this transformation, yes, there's a lot of strategies behind it, but it's also about changing our ways of working. One of the things I'm most proud of is in retail some of the best ideas come from people who are closest to the customers and to the business. A lot of our cost ideas have come, you know, come from our teams, and that includes things like, you know, optimizing our, you know, direct-to-consumer box sizes, which has a significant impact on our parcel spend, especially as we grow digital penetration. That would just be one example. Another thing I would point out is that we are learning to leverage our scale as a global organization, as Frank mentioned, which translates to things like more effective vendor negotiations, which also translates to a more efficiency, and a procurement spend that spans multiple areas. It translates to more effective vendor negotiations. It has multiple benefits. As you mentioned, we're leveraging, you know, analytics to be more effective in our pricing strategies. We are also leveraging a number of different, you know, operational activities. When you think about supply chain, you heard me reference this notion of end-to-end supply chain, which also translates to more efficient non-selling store tasks, so that our stripers can spend more time with the customer versus time on operational activities. We're really thinking about this end to end, and not just within our individual functions, but we think about it how we can make the best decisions for the overall company. I'll just jump in quickly. Sorry. On pricing and margin optimization. We're already making progress. Our team has built a machine learning pricing tool. We've gone from sort of manual pricing, both in store and online, to now an automated tool, which has proven to save significant markdown dollars as we roll that out across channels and geographies and banners. Then I think we linked it back to our loyalty program. The ability to drive personalized offers and not discount something that somebody otherwise would pay full price or have a strong affinity for, we're certainly have modeled that into. We'll learn in our fall pilot certainly how to quantify what that benefit means to us. All right. Thank you. Jonathan Komp from Baird. Over here. Hi. Thank you. Well, the light is right behind you. Okay. A couple of financial related questions. Just first, given some of the comments on 2023, could you maybe shape the year a little bit more? You talked about first half comps and some of the promotional pressure in the first half that might be tailwinds later in the year. If you could do anything more to just shape the year a little better. The long term EBIT margin bridge was very helpful. Could you maybe just talk and expand about what gross margin you might need to get to the long term EBIT margin targets and how you expect to get there? Sure. So on the shape of the year, we gave you the comps kind of by half, so that down mid-to-high single digits in the front half and the down low singles in the back half. In addition to that, again, we're gonna see some promotional pressure continue into the early part of the year that we saw in the back half of last year, so that's gonna continue into the early part of the year. The earnings growth, that down 30%, is gonna be most pronounced in the first half, less pronounced in the back half. That's kind of the shape of the year. On the EBIT margin, on gross margins, our merch margins will be up from 2023 to 2026. A couple of dynamics to consider there. One is that, again, we have a little bit of pressure from the e-commerce channel being a little bit more expensive to fulfill, but we have offsets in the form of the cost saves through the transformation work. We have offsets in terms of leveraging occupancy on top of that. The overall merch margins will be up and overall gross margins will be up as well. Hi, Warren Cheng from Evercore ISI. I just wanted to dig in a little bit on your strategy of serving more sneaker occasions. You highlighted performance and casual as a couple of the key pillars there. Can you elaborate just more on the use cases you're focusing on here? A big part of casualization has been office casualization, where a lot of new brands have emerged. Is there any thought towards expanding your selection, on the vendors there? Thank you. Yeah. How about we tag team this? I'll just start more broadly, and then we'll go from there. I'm very excited about the fact that we've got the insights about the category and the consumer, and even common sense would tell you that there's plenty of opportunities to get more people into this category and for us to get more customers in our portfolios as well as more share of wallet. I mean, there's just plenty of opportunities. We've been proving we're doing that already, even, I would say, without the capabilities that we really know are gonna help us do that a lot more. All the things we just talked about in terms of loyalty, digital, CRM, e-commerce will only continue to add to that. The entire plan that we're working on is really focused around how do you broaden and appeal to more people for more occasions, whether it's in the Foot Locker banner specifically, where I think is our broadest opportunity, as well as how we do that through WSS and atmos separately. Why don't you talk a little bit about the products that would fit into these occasions as well? Yeah. I think if you looked at the left side of that consumer chart where we had the sneaker maven and the fashion-forward, certainly driven by more high heat, launch, energy type products. As you migrate to the center of the active athlete, more around performance, lifestyle and athleisure, and then the quality seeker and the deal finder, again, same brands, but a different mindset as the consumer is shopping. Deal finder being, of course, the most sensitive to pricing, promotions. Sub 100 is the biggest part of that consumer. Then the quality seeker's willing to pay for quality, hence the name, but is very sort of discriminating in what they're looking for and making sure that it meets their needs and try on and service is an important part of that value proposition. I think the other thing is really using our banner portfolio, particularly here in North America, where we have the strongest multi-banner offense, to divide and conquer and be really discreetly positioned from a consumer standpoint against discrete consumer and shopping occasions. That's the big unlock as well is using the store experience, the digital marketing, and then the retention mechanisms to make sure that that comes through in how we communicate and engage with consumers. I would just add that in terms of new brands, I mean, that's what Chris and his team do all the time, is really scour the landscape and build deeper relationships with our current brand partners and also constantly be looking at new ones. I think the key thing for us is to authentically evolve, and that's something that's really important as we looked at our brand product portfolio and as we work through the consumer types. We really have some opportunity to expand our portfolio through performance brands and through casual brands, but still stay authentically linked to the rest of our core business. That's really given us a lot of confidence as we've started to evolve, and we've seen great results over the last couple of years, and we've got a lot more things coming in the pipeline. Hey, thanks. Paul Lejuez, Citigroup. I'm curious if you could talk about the percent of your sales done on cash, paid with cash and how that's changed over time. How does it differ by banner? and then also curious about the decision to pilot in Canada, the loyalty program, if that's gonna be indicative of the U.S. market just in terms of a customer demographic perspective. Yeah. Let me start with the Canada loyalty test, and I'll ask somebody else to opine also on the cash. The test in Canada I would consider more of a technical test. You know, it's like we have to set up the technology to be able to exchange points for cash and all the things that go behind that. To your point, it's not nearly a replica of the U.S. market, but it's a helpful place for us to be able to test and learn just as we roll out the technology. There's other ways that we're assessing how, you know, the impact will play out in terms of the U.S. business. We have a lot of confidence just studying other loyalty programs, which, you know, I know some of them pretty well, and understanding our consumer needs and expectations that we're gonna be able to make this work. Think about Canada as a technical role and then a role in the U.S. over time, you know, to that program. I'll jump in on the tender mix actually. Yeah. We do over-index a bit on cash, but not to a dramatic extent, to be honest. We don't really parse it out beyond that. What we have seen in terms of trend is a trend away from cash, more towards credit and debit, much like the rest of the world. Certainly through the past couple, you know, year plus of economic expansion as the consumers, you know, kind of, you know, started to stretch a little bit, we've seen a little bit of credit impact there. Hi. Tom Nikic with Wedbush Securities. I wanted to ask about the partnership with adidas. About a year ago, you put out a press release announcing a new partnership, expecting to, I think it was triple the penetration of Adi sales. How does the fact that Yeezy doesn't exist anymore affect that? And Mary, have you had a chance to chat with, you know, with their new CEO and talk strategy with them? Yes. adidas is a very important brand partner for us. I've already chatted with Bjørn, and in fact, we're going to Germany to meet him in person very soon. You know, we are very committed to our long-term partnership with adidas, and obviously, that situation, you know, was broader than just Foot Locker. Chris, maybe you can just opine a bit, if you'd like, about kind of where we're heading with adidas and some of the exciting things. Yeah. I think we're excited about where our adidas partnership is going. I mentioned earlier the Anthony Edwards launch. We've really focused on basketball and really getting young and really driving a basketball point of view through them. That was step one in the process. We're working on multiple other product franchises. The Samba is becoming a very strong shoe globally right now. We've got a big plan with that around back to school. We're working on third-party collaboration ideas with them. Certainly, when Yeezy comes out, it impacts, but certainly our growth aspiration continues to move forward. We had to just sharpen and change a little bit of the trajectory of where that's going based off of that. We feel really good about where our partnership is with adidas and the lanes that we've created together. They've been a great partner in creating exclusivity around their key icons through elevated storytelling. That's probably the other big piece from them that we continue to work on. We're seeing some good traction globally around the brand, and we've got some work to do in other areas. Sam Poser with Williams Trading. Elliott, I'd like to ask you some questions in regard to you mentioned the new foundation for some of the digital work, the CRM, and, sort of how long this all takes, and how does all the other work being done, loyalty and all this stuff, sort of make sure that that all works. Like, where's the egg and where's the chicken, in a sense of what you need to get the whole thing working, and how long it takes, and how long deliveries and things like that for e-commerce orders, because you're a little longer than some of your competitors right now, and how that's gonna change? Thank you. Yeah. I'll take the first one. This is a multiyear plan. You heard Mary talk about an enterprise thinking collaborative approach. Certainly, our multiyear plan has been threaded through all of the strategies that we talked and we discussed today. There's a natural order, natural sequencing of things. You heard me talk about emerging with a stronger technology core and foundation. That includes investment in an ERP foundation across HR, merch, finance, which is very important to set us up for the next 50. That is certainly an example of a multiyear investment. The FLX program that Frank talked about and the expansion and scale of that will truly be multiyear, and we've threaded this across the year. It's a nice sequencing that balances the appropriate amount of speed and acceleration with balancing against risk to deliver, and we've thought about that. We're gonna be very intentional with the expansion there. Your second question on the e-commerce times. A couple of things I would highlight is we have very recently serviced a good amount of our demand through the central part of the country. Our investments on the coast is fairly recent, so we're ramping up our investment in Reno, Nevada, and we're also ramping up our fulfillment center on the East Coast in Pennsylvania. As we shift more of the volume to those nodes on the coast, we will expect our delivery times to improve. Our opportunity will be to sync our communication to the customer with the actual delivery times, but that's something that we're aggressively working on. Yeah. And- Sam, I was just gonna add one thing, which is that we also wanna have our cake and eat it too. This is a multiyear journey. We'll do it right, but there's plenty of low-hanging fruit. We have agile pods of team members working together on short-term immediate wins in digital, and we're seeing results already. We can both do the sum of those things as well as build the foundation. Well, in the spirit of having your cake and eating it too, we're focused on the short term also. We've stood up a digital win room that Elliott Rodgers mentioned in his presentation that is solely focused on driving conversion tactics through CRM and on the site today. So Frank Bracken mentioned a few things around product recommendations. We're doing a lot more with higher lifetime value consumers and sending them very targeted emails. We're adding things to the product display page that are calls to action around purchase. We're not waiting. I think to Mary Dillon's point on the low-hanging fruit, it's actually the thing that gives us a lot of confidence in the digital growth plan because there are things that we know we can optimize today. We feel really good about where we're heading on the trajectory. Mm-hmm. Hi, good morning. Thank you for having me. Corey Tarlowe with Jefferies. Mary, one of the things that you mentioned was that I think the broadest opportunity you see specifically is at Foot Locker. You also talked about how you ran a really comprehensive customer segmentation strategy and about how there's a lot of opportunity for the business to gain market share. I wanted to specifically ask about market share and where you see the market share for Foot Locker coming from, who that new customer incrementally is that's coming into the store, and how you see that unfolding as we look ahead, and you continue to drive these market share gains. Well, one of the ways to think about this is minting new customers into the category, which I, you know, I think actually Foot Locker has a pretty unique role in introducing, whether it's through Kids Foot Locker, graduating to Foot Locker, or just as we bring a lot more attention to sneaker culture through the relaunch of the Foot Locker brand, there's an opportunity for more folks to open up the aperture and become part of the category, frankly, as one source of growth. It's really about everything that we're doing is around more customers, more share of wallet. It crosses the range from the store of the future, the formats, the brands that we carry, the way that we create our own demand engine. It will be a combination of more share of wallet. You know, it's like, again, a lot of consumer categories. People can shop in a lot of places, whether it's a direct-to-consumer, an online-only retailer, physical retailers. I mean, that doesn't daunt us because that's true for almost any consumer category. Our job is to play our offense and really stand out and attract more customers to give more of their share of wallet to us. That's kind of included in everything that we're talking about today. That is the whole Lace Up Plan. Hi, it's Omar Saad from Evercore Partners. If I could play devil's advocate a little bit. You know, you look at the balance of how your inventory is gonna look, post this kind of Nike adjustment. Have you taken down Nike enough? You know, 55%-60%, still a very single brand dominated retailer in a category that you're obviously super bullish on across different use cases and brands. You know, I don't wanna open up a new conversation, but is it possible that you should be more balanced even? Well, I think we're just growing that balance over time, you know. Nike is clearly a leader and our number one brand partner, and will continue to be so for some period of time. I think our quest is to say, how can we drive great growth with Nike as well as you just said, broaden the portfolio and do that through other brands, and we're doing that today. It's also a different mix by banner. WSS is a sub 50% Nike penetration. Champs is gonna migrate to sub 50%. Foot Locker and Kids have a higher proportion of Nike and Jordan, candidly, because that's what the sneaker maven, the fashion-forward want. The old saying, the heart wants what the heart wants. Ultimately, the consumer will sort of decide, but it is different. Again, that goes back to, I think, this gentleman's questions about the use and application of our banner portfolio, very discreetly against different consumer segments who want inherently different things. Bran Mišković at VESA. Thank you for having us. Quick question around GOAT. Can you sort of talk about the financial sort of valuation of the company or for your participation, and more importantly, about how it plays a role in the strategy? Do you wanna take that? Yeah, sure. Yeah. Very happy and proud of the work that Eddy Lu and the team are doing at GOAT. They've obviously carved an incredible position for themselves in the secondary market. A fantastic brand, fantastic digital experience, made a recent acquisition of the Grailed company to help grow their streetwear and apparel business. I sit on the board, always in active conversations with Eddy and the senior team and their investment partners about how to share data, how to look at operational efficiencies, and how to think strategically about the future of the marketplace. You know, at this point, we've tested some things. We'll continue to have those conversations and look for opportunities to partner and drive synergy both from a consumer as well as a back of house standpoint and, you know, more to come. Certainly, those guys have carved a and charted a nice path for themselves in the secondary market. I think that concludes Q&A. Yes. Wow, this is a first. Thank you. Thank you all again so much for your time and attention. Really appreciate your questions as well. Thank you. Thank you.