Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
Foot Locker, Inc. is a leading footwear and apparel retailer that unlocks the "inner sneakerhead" in all of us. We have a strong history of sneaker authority that sparks discovery and ignites the power of sneaker culture through our portfolio of brands, including Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos.
Ensuring that our customers can engage with us in the most convenient manner for them whether in our stores, on our website, or on our mobile application, is a high priority for us. We use our omni-channel capabilities to bridge the digital world and physical stores, including order-in-store, buy online and pickup-in-store, and buy online and ship-from-store, as well as e-commerce. We operate websites and mobile apps aligned with the brand names of our store banners. These sites offer some of the largest online product selections and provide a seamless link between e-commerce and physical stores.
Store Count
At April 29, 2023, we operated 2,692 stores as compared with 2,714 and 2,815 stores at January 28, 2023 and April 30, 2022, respectively.
Franchise Operations
A total of 163 franchised stores were operating at April 29, 2023, as compared with 159 and 148 stores at January 28, 2023 and April 30, 2022, respectively, operating in the Middle East and Asia. These stores are not included in the operating store count above.
Results of Operations
We evaluate performance based on several factors, primarily the banner’s financial results, referred to as division profit. Division profit reflects income before income taxes, impairment and other charges, corporate expenses, non-operating income, and net interest expense.
The table below summarizes our results for the period.
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Sales |
|
$ |
1,927 |
|
|
$ |
2,175 |
|
Licensing revenue |
|
|
4 |
|
|
|
3 |
|
Total revenue |
|
|
1,931 |
|
|
|
2,178 |
|
|
|
|
|
|
|
|
Operating Results |
|
|
|
|
|
|
Division profit |
|
|
104 |
|
|
|
263 |
|
Less: Impairment and other (1) |
|
|
39 |
|
|
|
6 |
|
Less: Corporate expense (2) |
|
|
4 |
|
|
|
37 |
|
Income from operations |
|
|
61 |
|
|
|
220 |
|
Interest expense, net |
|
|
(1 |
) |
|
|
(5 |
) |
Other income / (expense), net (3) |
|
|
(3 |
) |
|
|
(25 |
) |
Income before income taxes |
|
$ |
57 |
|
|
$ |
190 |
|
(1) |
See the Impairment and Other Charges section for further information. |
(2) |
Corporate expense consists of unallocated selling, general and administrative expenses as well as depreciation and amortization related to the Company’s corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items. |
(3) |
Other income / (expense), net includes non-operating items, changes in fair value of minority interests measured at fair value or using the fair value measurement alternative, changes in the market value of our available-for-sale security, our share of earnings or losses related to our equity method investments, and net benefit expense related to our pension and postretirement programs excluding the service cost component. See the Other income / (expense), net section for further information. |
First Quarter 2023 Form 10-Q Page 15
Reconciliation of Non-GAAP Measures
In addition to reporting our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), we report certain financial results that differ from what is reported under GAAP. We have presented certain financial measures identified as non-GAAP, such as sales changes excluding foreign currency fluctuations, adjusted income before income taxes, adjusted net income, and adjusted diluted earnings per share.
We present certain amounts as excluding the effects of foreign currency fluctuations, which are also considered non-GAAP measures. Where amounts are expressed as excluding the effects of foreign currency fluctuations, such changes are determined by translating all amounts in both years using the prior-year average foreign exchange rates. Presenting amounts on a constant currency basis is useful to investors because it enables them to better understand the changes in our business that are not related to currency movements.
These non-GAAP measures are presented because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core business or affect comparability. In addition, these non-GAAP measures are useful in assessing our progress in achieving our long-term financial objectives. We estimate the tax effect of all non-GAAP adjustments by applying a marginal tax rate to each item. The income tax items represent the discrete amount that affected the period.
The non-GAAP financial information is provided in addition, and not as an alternative, to our reported results prepared in accordance with GAAP. Presented below is a reconciliation of GAAP and non-GAAP.
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions, except per share amounts) |
|
2023 |
|
|
2022 |
|
Pre-tax income: |
|
|
|
|
|
|
|
|
Income before income taxes |
|
$ |
57 |
|
|
$ |
190 |
|
Pre-tax amounts excluded from GAAP: |
|
|
|
|
|
|
|
Impairment and other |
|
|
39 |
|
|
|
6 |
|
Other income / expense, net |
|
|
1 |
|
|
|
24 |
|
Adjusted income before income taxes (non-GAAP) |
|
$ |
97 |
|
|
$ |
220 |
|
|
|
|
|
|
|
|
After-tax income: |
|
|
|
|
|
|
|
|
Net income attributable to Foot Locker, Inc. |
|
$ |
36 |
|
|
$ |
133 |
|
After-tax adjustments excluded from GAAP: |
|
|
|
|
|
|
|
Impairment and other, net of income tax benefit of $6, and $2 million, respectively |
|
|
33 |
|
|
|
4 |
|
Other income / expense, net of income tax benefit/(expense) of $-, and $6 million, respectively |
|
|
1 |
|
|
|
18 |
|
Tax reserves benefit |
|
|
(4 |
) |
|
|
— |
|
Adjusted net income (non-GAAP) |
|
$ |
66 |
|
|
$ |
155 |
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.38 |
|
|
$ |
1.37 |
|
Diluted EPS amounts excluded from GAAP: |
|
|
|
|
|
|
Impairment and other |
|
|
0.36 |
|
|
|
0.05 |
|
Other income / expense, net |
|
|
— |
|
|
|
0.18 |
|
Tax reserves benefit |
|
|
(0.04 |
) |
|
|
— |
|
Adjusted diluted earnings per share (non-GAAP) |
|
$ |
0.70 |
|
|
$ |
1.60 |
|
During the thirteen weeks ended April 29, 2023, we recorded pre-tax charges of $39 million and $6 million, respectively, classified as Impairment and Other. See the Impairment and Other Charges section for further information.
First Quarter 2023 Form 10-Q Page 16
The adjustments made to other income / (expense), net reflected gains or losses associated with our minority investments. See the Other Income / (Expense), net section for further information.
During the thirteen weeks ended April 29, 2023, we recorded a $4 million benefit related to an income tax reserves release from a statute of limitations expiration.
Segment Reporting and Results of Operations
We have determined that we have three operating segments, North America, EMEA, and Asia Pacific. Our North America operating segment includes the results of the following banners operating in the U.S. and Canada: Foot Locker, Champs Sports, Kids Foot Locker, and WSS, including each of their related e-commerce businesses. Our EMEA operating segment includes the results of the following banners operating in Europe: Foot Locker, Sidestep, and Kids Foot Locker, including each of their related e-commerce businesses. Our Asia Pacific operating segment includes the results of the Foot Locker banner and its related e-commerce business operating in Australia, New Zealand, and Asia, as well as atmos, which operates primarily in Asia. We have further aggregated these operating segments into one reportable segment based upon their shared customer base and similar economic characteristics.
As reported in our Annual Report on Form 10-K, we announced the closure of the Sidestep banner and the wind down of our stores operating in Hong Kong and Macau. We currently expect to wind down the majority of operations by the end of the second quarter. Additionally during the second quarter, we will be transitioning our Singapore and Malaysian business to a licensed store model.
Sales
All references to comparable-store sales for a given period relate to sales of stores that were open at the period-end and had been open for more than one year. The computation of consolidated comparable sales also includes our direct-to-customers channel. Stores opened or closed during the period are not included in the comparable-store base; however, stores closed temporarily for relocation or remodeling are included. Computations exclude the effect of foreign currency fluctuations.
Sales from acquired businesses that include inventory are included in the computation of comparable-store sales after the 15th month of operations. Accordingly, WSS comparable-store sales are included in the first quarter of 2023, while sales from the atmos banner only include two months in the computation of comparable-store sales.
For the thirteen weeks ended April 29, 2023, total sales decreased by $248 million, or 11.4%, to $1,927 million, as compared with the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, total sales decreased by $217 million, or 10.0%, for the thirteen weeks ended April 29, 2023. The information shown below represents certain sales metrics by sales channel.
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Store sales |
|
$ |
1,613 |
|
|
$ |
1,776 |
|
$ Change |
|
$ |
(163 |
) |
|
|
|
% Change |
|
|
(9.2 |
)% |
|
|
|
% of total sales |
|
|
83.7 |
% |
|
|
81.7 |
% |
Comparable sales (decrease) / increase |
|
|
(7.4 |
)% |
|
|
7.9 |
% |
Direct-to-customers sales |
|
$ |
314 |
|
|
$ |
399 |
|
$ Change |
|
$ |
(85 |
) |
|
|
|
% Change |
|
|
(21.3 |
)% |
|
|
|
% of total sales |
|
|
16.3 |
% |
|
|
18.3 |
% |
Comparable sales decrease |
|
|
(16.8 |
)% |
|
|
(29.0 |
)% |
Total sales |
|
$ |
1,927 |
|
|
$ |
2,175 |
|
$ Change |
|
$ |
(248 |
) |
|
|
|
|
% Change |
|
|
(11.4 |
)% |
|
|
|
|
Comparable sales decrease |
|
|
(9.1 |
)% |
|
|
(1.9 |
)% |
First Quarter 2023 Form 10-Q Page 17
The information shown below represents certain combined stores and direct-to-customers sales metrics for the thirteen weeks ended April 29, 2023 as compared with the corresponding prior-year period.
|
|
Thirteen weeks ended |
|
|
|
Constant Currencies |
|
|
Comparable Sales |
|
Foot Locker |
|
|
(7.2 |
)% |
|
|
(5.5 |
)% |
Champs Sports |
|
|
(27.3 |
)% |
|
|
(24.6 |
)% |
Kids Foot Locker |
|
|
(7.2 |
)% |
|
|
(7.7 |
)% |
WSS |
|
|
8.7 |
% |
|
|
(3.4 |
)% |
Other |
|
|
n.m. |
|
|
|
n.m. |
|
North America |
|
|
(14.5 |
)% |
|
|
(12.8 |
)% |
Foot Locker |
|
|
3.7 |
% |
|
|
2.1 |
% |
Sidestep |
|
|
(41.7 |
)% |
|
|
(37.8 |
)% |
EMEA |
|
|
1.0 |
% |
|
|
(0.1 |
)% |
Foot Locker |
|
|
12.9 |
% |
|
|
11.2 |
% |
atmos |
|
|
6.1 |
% |
|
|
2.7 |
% |
Asia Pacific |
|
|
10.6 |
% |
|
|
8.9 |
% |
Total Foot Locker, Inc. |
|
|
(10.0 |
)% |
|
|
(9.1 |
)% |
Comparable sales decreased both in our stores and in our direct-to-customer channels this quarter due to changing vendor mix, coupled with macroeconomic headwinds, including inflation and lower income tax refunds in the United States. In addition, North America sales were negatively affected by the closure of Eastbay business, which ceased operating in late 2022. Eastbay's sales primarily represent the other category in the above table, and excluding those sales the decline would have been 11.6% on a constant currency basis. Additionally, we are repositioning the Champs Sports banner to serve the active athlete, which is resulting in expected comparable sales declines due to the transition. Within EMEA, sales for the Foot Locker banners increased, led by our operations in Italy, Spain, and France as tourism has increased as compared with last year. Within Asia Pacific, sales for the Foot Locker banner increased across many of the regions that we operate, led by Australia, New Zealand, and South Korea. As previously announced, we are in the process of closing our operations in Hong Kong and Macau and converting our business in Singapore and Malaysia to a licensing arrangement. Our sales from our atmos banner increased by 2.7% on a comparable basis, this banner was affected negatively by the lack of certain key styles from Adidas that were available in the marketplace last year.
From a product perspective for the combined channels, the sales decline in the quarter was across all categories of footwear, apparel and accessories.
Gross Margin
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
|
|
2023 |
|
|
2022 |
|
Gross margin rate |
|
|
30.0 |
% |
|
|
34.0 |
% |
Basis point decrease in the gross margin rate |
|
|
(400 |
) |
|
|
|
Components of the change: |
|
|
|
|
|
|
|
Merchandise margin rate decline |
|
|
(250 |
) |
|
|
|
Occupancy and buyers’ compensation expense rate |
|
|
(150 |
) |
|
|
|
Gross margin is calculated as sales minus cost of sales. Cost of sales includes: the cost of merchandise, freight, distribution costs including related depreciation expense, shipping and handling, occupancy and buyers’ compensation. Occupancy costs include rent (including fixed common area maintenance charges and other fixed non-lease components), real estate taxes, general maintenance, and utilities.
First Quarter 2023 Form 10-Q Page 18
The gross margin rate decreased to 30.0% for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year period, reflecting a 250-basis point decrease in the merchandise margin rate, and a 150-basis point deleverage in the occupancy and buyers' compensation rate. The decline in merchandise margin rate reflected higher markdowns versus last year, higher costs of merchandise and increased shrink. The deleverage in the occupancy and buyers' compensation rate was primarily related to the fixed nature of these costs coupled with the decline in sales.
Selling, General and Administrative Expenses (SG&A)
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
SG&A |
|
$ |
431 |
|
|
$ |
463 |
|
$ Change |
|
$ |
(32 |
) |
|
|
|
% Change |
|
|
(6.9 |
)% |
|
|
|
SG&A as a percentage of sales |
|
|
22.4 |
% |
|
|
21.3 |
% |
SG&A decreased by $32 million, or $25 million excluding the effect of foreign currency fluctuations, for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year period. As a percentage of sales, SG&A increased by 110 basis points for the thirteen weeks ended April 29, 2023, driven primarily by deleverage from the decline in sales, coupled with pressures from inflation and investments in store wages. Partially offsetting these increases was lower incentive compensation due to the Company's underperformance relative to targets and savings from our cost optimization program.
Depreciation and Amortization
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Depreciation and amortization |
|
$ |
51 |
|
|
$ |
54 |
|
$ Change |
|
$ |
(3 |
) |
|
|
|
% Change |
|
|
(5.6 |
)% |
|
|
|
Depreciation and amortization expense decreased by $3 million for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year period. Excluding the effect of foreign currency fluctuations, depreciation and amortization decreased by $2 million for the thirteen weeks ended April 29, 2023, primarily related to operating fewer stores and the effect from impairments recorded in the prior year.
Impairment and Other Charges
During the first quarter of 2023, we incurred $19 million of transformation consulting expense, $18 million of impairment charges related to accelerated tenancy charges on right-of-use assets for the closures of the Sidestep banner and certain Foot Locker Asia stores, and $2 million of reorganization costs related to the closure of a North American Distribution center and costs associated with the closure of the Sidestep banner and certain Foot Locker Asia stores. In the corresponding prior-year period, we recorded impairment charges of $3 million related to long-lived assets and right-of-use assets as well as accelerated tenancy charges, $2 million of acquisition and integration costs related to WSS and atmos acquisitions, and $1 million of other expenses.
Corporate Expense
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Corporate expense |
|
$ |
4 |
|
|
$ |
37 |
|
$ Change |
|
$ |
(33 |
) |
|
|
|
Corporate expense consists of unallocated general and administrative expenses as well as depreciation and amortization related to our corporate headquarters, centrally managed departments, unallocated insurance and benefit programs, certain foreign exchange transaction gains and losses, and other items.
First Quarter 2023 Form 10-Q Page 19
Corporate expense decreased by $33 million for the thirteen weeks ended April 29, 2023, as compared with the corresponding prior-year period. Depreciation and amortization included in corporate expense was $9 million for each of the thirteen weeks ended April 29, 2023 and April 30, 2022. Corporate expense decreased primarily due to an increase in the allocation of corporate expense to the banners in 2023 and lower incentive compensation, partially offset by our ongoing investments in information technology.
Operating Results
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Division profit |
|
$ |
104 |
|
|
$ |
263 |
|
Division profit margin |
|
|
5.4 |
% |
|
|
12.1 |
% |
Division profit margin as a percentage of sales decreased to 5.4% for the thirteen weeks ended April 29, 2023, with both sales channels experiencing declines in sales and gross margin and deleveraging expenses.
Interest Expense, Net
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Interest expense |
|
$ |
(5 |
) |
|
$ |
(6 |
) |
Interest income |
|
|
4 |
|
|
|
1 |
|
Interest (expense) income, net |
|
$ |
(1 |
) |
|
$ |
(5 |
) |
We recorded $1 million of net interest expense for the thirteen weeks ended April 29, 2023, as compared with net interest expense of $5 million for the corresponding prior-year period. Interest expense decreased primarily due to an increase in interest income earned on our cash and cash equivalents related to higher interest rates and income from our cross-currency swap.
Other Income / (Expense), Net
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Other income / (expense), net |
|
$ |
(3 |
) |
|
$ |
(25 |
) |
This caption includes non-operating items, including changes in fair value of minority investments measured at fair value or using the fair value measurement alternative, changes in the market value of our available-for-sale security, our share of earnings or losses related to our equity method investments, and net benefit / (expense) related to our pension and postretirement programs excluding the service cost component.
The thirteen weeks ended April 29, 2023 reflected expense of $2 million related to our pension and postretirement programs, and a $1 million loss on our equity method investments. Other income / (expense) for the corresponding prior-year period primarily represented a decrease in the fair value of our former investment in Retailors, Ltd. resulting in a non-cash loss of $25 million.
First Quarter 2023 Form 10-Q Page 20
Income Taxes
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Provision for income taxes |
|
$ |
21 |
|
|
$ |
58 |
|
Effective tax rate |
|
|
36.3 |
% |
|
|
30.3 |
% |
Our current year interim provision for income taxes was measured using an estimated annual effective tax rate, which represented a blend of federal, state, and foreign taxes and included the effect of certain nondeductible items as well as changes in our mix of domestic and foreign earnings or losses, adjusted for discrete items that occurred within the periods presented.
We regularly assess the adequacy of our provisions for income tax contingencies in accordance with applicable authoritative guidance on accounting for income taxes. As a result, we may adjust the reserves for unrecognized tax benefits considering new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation.
During the thirteen weeks ended April 29, 2023, we recorded a $4 million reserve release from a statute of limitations expiration on our foreign income taxes. Excluding this item, and other insignificant reserve releases due to settlements of international tax examinations, the effective tax rate for the current year period increased, as compared with the corresponding prior-year period, primarily due to the decline in income before tax and a change in geographic mix of earnings.
Liquidity and Capital Resources
Liquidity
Our primary source of liquidity has been cash flow from operations, while the principal uses of cash have been to fund inventory and other working capital requirements; finance capital expenditures related to store openings, store remodelings, internet and mobile sites, information systems, and other support facilities; make retirement plan contributions, quarterly dividend payments, and interest payments; and fund other cash requirements to support the development of our short-term and long-term operating strategies, including strategic investments.
We generally finance real estate with operating leases. We believe our cash, cash equivalents, future cash flow from operations, and amounts available under our credit agreement will be adequate to fund these requirements.
The Company may also repurchase its common stock or seek to retire or purchase outstanding debt through open market purchases, privately negotiated transactions, or otherwise. Share repurchases and retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions, strategic considerations, and other factors. The amounts involved may be material. As of April 29, 2023, approximately $1,103 million remained available under our current $1.2 billion share repurchase program.
Our full-year capital spending is expected to be $275 million. The forecast includes $210 million related to the remodeling or relocation of approximately 170 existing stores and the opening of approximately 90 new stores, including 25 WSS stores. Additionally, we expect to spend $65 million for the development of information systems, websites, and infrastructure, including supply chain initiatives. We also expect to spend an additional $30 million in software-as-a-service contracts related to our technology initiatives.
Any material adverse change in customer demand, fashion trends, competitive market forces, or customer acceptance of our merchandise mix, retail locations and websites, uncertainties related to the effect of competitive products and pricing, our reliance on a few key suppliers for a significant portion of our merchandise purchases and risks associated with global product sourcing, economic conditions worldwide, the effects of currency fluctuations, as well as other factors listed under the headings “Disclosure Regarding Forward-Looking Statements,” and “Risk Factors” could affect our ability to continue to fund our needs from business operations.
First Quarter 2023 Form 10-Q Page 21
Operating Activities
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Net cash used in operating activities |
|
$ |
(118 |
) |
|
$ |
(21 |
) |
$ Change |
|
$ |
(97 |
) |
|
|
|
Operating activities reflects net income adjusted for non-cash items and working capital changes. Adjustments to net income for non-cash items include impairment charges, other charges, fair value adjustments to minority investments, depreciation and amortization, deferred income taxes, and share-based compensation expense.
The decrease in cash from operating activities reflected lower net income, partially offset by timing of merchandise purchases and payments of accounts payable and accrued and other liabilities, as compared with the same period last year. The prior-year merchandise purchases were affected by the supply chain disruptions that occurred in the preceding year.
Investing Activities
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Net cash used in investing activities |
|
$ |
(59 |
) |
|
$ |
(105 |
) |
$ Change |
|
$ |
46 |
|
|
|
|
The change in investing activities primarily reflected lower capital expenditures in the current year, as compared with the prior-year period, as several large projects related to 2021 were paid in the first quarter of 2022.
For the thirteen weeks ended April 29, 2023, capital expenditures decreased by $36 million to $59 million, as compared with the corresponding prior-year period.
Financing Activities
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Net cash used in financing activities |
|
$ |
(46 |
) |
|
$ |
(128 |
) |
$ Change |
|
$ |
82 |
|
|
|
|
Cash used in financing activities was primarily related to our return to shareholders initiatives as follows:
|
|
Thirteen weeks ended |
|
|
|
April 29, |
|
|
April 30, |
|
($ in millions) |
|
2023 |
|
|
2022 |
|
Share repurchases |
|
$ |
— |
|
|
$ |
(89 |
) |
Dividends paid on common stock |
|
|
(38 |
) |
|
|
(38 |
) |
Total returned to shareholders |
|
$ |
(38 |
) |
|
$ |
(127 |
) |
During the thirteen weeks ended April 29, 2023, we did not repurchase any shares under our share repurchase program, whereas in the prior year we spent $89 million to repurchase shares. We declared and paid $38 million in dividends representing a quarterly rate of $0.40 per share in both 2023 and 2022. We paid $10 million and $1 million during the first quarters of 2023 and 2022, respectively, to satisfy tax withholding obligations related to vesting of share-based equity awards.
Critical Accounting Policies and Estimates
There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within the 2022 Form 10‑K.
First Quarter 2023 Form 10-Q Page 22
Recent Accounting Pronouncements
Descriptions of the recently issued and adopted accounting principles are included in Item 1. “Financial Statements” in Note 1, Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements.