10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 9, 2017; or

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________.

Commission File Number:  0-19797

WHOLE FOODS MARKET, INC.

(Exact name of registrant as specified in its charter)

Texas	74-1989366
(State of	(IRS employer
incorporation)	identification no.)

550 Bowie Street

Austin, Texas 78703

(Address of principal executive offices)

512-477-4455

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)	Emerging growth company o

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

The number of shares of the registrant’s common stock, no par value, outstanding as of May 12, 2017 was 319,564,636 shares.

Whole Foods Market, Inc.

Form 10-Q

Table of Contents

	Page
Part I. Financial Information
Item 1. Financial Statements.
Consolidated Balance Sheets (unaudited), April 9, 2017 and September 25, 2016	1
Consolidated Statements of Operations (unaudited), for the twelve and twenty-eight weeks ended April 9, 2017 and April 10, 2016	2
Consolidated Statements of Comprehensive Income (unaudited), for the twelve and twenty-eight weeks ended April 9, 2017 and April 10, 2016	3
Consolidated Statements of Shareholders’ Equity (unaudited), for the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 25, 2016	4
Consolidated Statements of Cash Flows (unaudited), for the twenty-eight weeks ended April 9, 2017 and April 10, 2016	5
Notes to Consolidated Financial Statements (unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	30
Item 4. Controls and Procedures.	30
Part II. Other Information
Item 1. Legal Proceedings.	31
Item 1A. Risk Factors.	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	31
Item 5. Other.	32
Item 6. Exhibits.	32
Signature	33

Part I. Financial Information

Item 1. Financial Statements.

Whole Foods Market, Inc.

Consolidated Balance Sheets (unaudited)

(In millions)

Assets	April 9, 2017			September 25, 2016
Current assets:
Cash and cash equivalents	$	412		$	351
Short-term investments - available-for-sale securities	476			379
Restricted cash	124			122
Accounts receivable	255			242
Merchandise inventories	508			517
Prepaid expenses and other current assets	119			167
Deferred income taxes	214			197
Total current assets	2,108			1,975
Property and equipment, net of accumulated depreciation and amortization	3,469			3,442
Goodwill	710			710
Intangible assets, net of accumulated amortization	71			74
Deferred income taxes	114			100
Other assets	41			40
Total assets	$	6,513		$	6,341
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	2		$	3
Accounts payable	313			307
Accrued payroll, bonus and other benefits due team members	393			407
Dividends payable	45			43
Other current liabilities	584			581
Total current liabilities	1,337			1,341
Long-term debt and capital lease obligations, less current installments	1,047			1,048
Deferred lease liabilities	665			640
Other long-term liabilities	105			88
Total liabilities	3,154			3,117
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value, 1,200 shares authorized; 377.0 shares issued; 318.8 and 318.3 shares outstanding at 2017 and 2016, respectively	2,945			2,933
Common stock in treasury, at cost, 58.2 and 58.7 shares at 2017 and 2016, respectively	(2,004		)	(2,026		)
Accumulated other comprehensive loss	(35		)	(32		)
Retained earnings	2,453			2,349
Total shareholders’ equity	3,359			3,224
Total liabilities and shareholders’ equity	$	6,513		$	6,341

The accompanying notes are an integral part of these consolidated financial statements.

1

Whole Foods Market, Inc.

Consolidated Statements of Operations (unaudited)

(In millions, except per share amounts)

	Twelve weeks ended						Twenty-eight weeks ended
	April 9, 2017			April 10, 2016			April 9, 2017			April 10, 2016
Sales	$	3,737		$	3,696		$	8,656		$	8,524
Cost of goods sold and occupancy costs	2,463			2,406			5,732			5,593
Gross profit	1,274			1,290			2,924			2,931
Selling, general and administrative expenses	1,057			1,028			2,474			2,402
Pre-opening expenses	12			18			33			31
Relocation, store closure and lease termination costs	34			3			74			5
Operating income	171			241			343			493
Interest expense	(11		)	(11		)	(26		)	(18		)
Investment and other income	2			5			1			9
Income before income taxes	162			235			318			484
Provision for income taxes	63			93			124			185
Net income	$	99		$	142		$	194		$	299
Basic earnings per share	$	0.31		$	0.44		$	0.61		$	0.90
Weighted average shares outstanding	318.5			324.7			318.3			331.7
Diluted earnings per share	$	0.31		$	0.44		$	0.61		$	0.90
Weighted average shares outstanding, diluted basis	318.9			325.4			318.7			332.7
Dividends declared per common share	$	0.140		$	0.135		$	0.280		$	0.270

The accompanying notes are an integral part of these consolidated financial statements.

2

Whole Foods Market, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

	Twelve weeks ended					Twenty-eight weeks ended
	April 9, 2017			April 10, 2016		April 9, 2017			April 10, 2016
Net income	$	99		$	142	$	194		$	299
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(2		)	10		(3		)	—
Other comprehensive loss, net of tax	(2		)	10		(3		)	—
Comprehensive income	$	97		$	152	$	191		$	299

The accompanying notes are an integral part of these consolidated financial statements.

3

Whole Foods Market, Inc.

Consolidated Statementsof Shareholders’ Equity(unaudited)

Twenty-eight weeks endedApril 9, 2017 and fiscal year ended September 25, 2016

(In millions)

	Shares outstanding		Common stock			Common stock in treasury			Accumulated other comprehensive loss			Retained earnings			Total shareholders’ equity
Balances at September 27, 2015	348.9		$	2,904		$	(1,124	)	$	(28	)	$	2,017		$	3,769
Net income	—		—			—			—			507			507
Other comprehensive loss, net of tax	—		—			—			(4		)	—			(4		)
Dividends ($0.54 per common share)	—		—			—			—			(174		)	(174		)
Issuance of common stock pursuant to team member stock plans	1.1		(23		)	42			—			—			19
Purchase of treasury stock	(31.7	)	—			(944		)	—			—			(944		)
Tax benefit related to exercise of team member stock options	—		3			—			—			—			3
Share-based payment expense	—		49			—			—			—			49
Other	—		—			—			—			(1		)	(1		)
Balances at September 25, 2016	318.3		2,933			(2,026		)	(32		)	2,349			3,224
Net income	—		—			—			—			194			194
Other comprehensive loss, net of tax	—		—			—			(3		)	—			(3		)
Dividends ($0.28 per common share)	—		—			—			—			(89		)	(89		)
Issuance of common stock pursuant to team member stock plans	0.5		(10		)	22			—			—			12
Tax benefit related to exercise of team member stock options			(1		)	—			—			—			(1		)
Share-based payment expense			23			—			—			—			23
Other			—			—			—			(1		)	(1		)
Balances at April 9, 2017	318.8		$	2,945		$	(2,004	)	$	(35	)	$	2,453		$	3,359

The accompanying notes are an integral part of these consolidated financial statements.

4

Whole Foods Market, Inc.

Consolidated Statementsof Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended
	April 9, 2017			April 10, 2016
Cash flows from operating activities
Net income	$	194		$	299
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	305			259
Share-based payment expense	23			28
LIFO expense	3			4
Deferred income tax expense	(31		)	5
Excess tax benefit related to exercise of team member stock options	—			(1		)
Accretion of premium/discount on marketable securities	1			1
Deferred lease liabilities	34			18
Other	6			1
Net change in current assets and liabilities:
Accounts receivable	(11		)	(12		)
Merchandise inventories	6			(25		)
Prepaid expenses and other current assets	54			(54		)
Accounts payable	6			4
Accrued payroll, bonus and other benefits due team members	(13		)	(39		)
Other current liabilities	30			76
Net change in other long-term liabilities	17			11
Net cash provided by operating activities	624			575
Cash flows from investing activities
Development costs of new locations	(227		)	(197		)
Other property and equipment expenditures	(149		)	(141		)
Purchases of available-for-sale securities	(356		)	(176		)
Sales and maturities of available-for-sale securities	258			350
Payment for purchase of acquired entities, net of cash acquired	—			(11		)
Other investing activities	(6		)	(10		)
Net cash used in investing activities	(480		)	(185		)
Cash flows from financing activities
Purchases of treasury stock	—			(734		)
Common stock dividends paid	(88		)	(90		)
Issuance of common stock	10			11
Excess tax benefit related to exercise of team member stock options	—			1
Proceeds from long-term borrowings	—			999
Proceeds from revolving line of credit	—			300
Payments on long-term debt and capital lease obligations	(2		)	(305		)
Other financing activities	(1		)	(8		)
Net cash provided by (used in) financing activities	(81		)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			2
Net change in cash, cash equivalents, and restricted cash	63			566
Cash, cash equivalents, and restricted cash at beginning of period	473			364
Cash, cash equivalents, and restricted cash at end of period	$	536		$	930
Supplemental disclosure of cash flow information:
Federal and state income taxes paid	$	142		$	229
Interest paid	$	26		$	—

The accompanying notes are an integral part of these consolidated financial statements.

5

Whole Foods Market, Inc.

Notes to Consolidated Financial Statements (unaudited)

April 9, 2017

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements of Whole Foods Market, Inc. and its consolidated subsidiaries (collectively “Whole Foods Market,” “Company,” or “we”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis and the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation. Where appropriate, we have reclassified prior year financial statements to conform to current year presentation. Interim results are not necessarily indicative of results for any other interim period or for a full fiscal year. The Company reports its results of operations on a 52- or 53-week fiscal year ending on the last Sunday in September. The first fiscal quarter is 16 weeks, the second and third quarters each are 12 weeks, and the fourth quarter is 12 or 13 weeks. Fiscal years 2017 and 2016 are 52-week years. The Company has one operating segment and a single reportable segment, natural and organic foods supermarkets.

The following is a summary of percentage sales by geographic area for the periods indicated:

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Sales:
United States	97.1	%	97.1	%	97.1	%	97.1	%
Canada and United Kingdom	2.9		2.9		2.9		2.9
Total sales	100.0	%	100.0	%	100.0	%	100.0	%

The following is a summary of the percentage of net long-lived assets by geographic area as of the dates indicated:

	April 9, 2017		September 25, 2016
Long-lived assets, net:
United States	97.5	%	97.5	%
Canada and United Kingdom	2.5		2.5
Total long-lived assets, net	100.0	%	100.0	%

(2) Summary of Significant Accounting Policies

Recent Accounting Pronouncements

Effective September 26, 2016, the Company early adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-18, “Statement of Cash Flows: Restricted Cash ,” which amends the Accounting Standards Codification Topic 230. The amendments, which require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash, were adopted on a retrospective basis. The adoption of these amendments did not have a significant effect on the Company’s financial statements.

6

The following table provides a brief description of recently issued accounting pronouncements that have not yet been adopted. Early adoption is permitted for all updates unless stated.

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2017-04 Simplifying the Test for Goodwill Impairment (Topic 350)	The amendments eliminate Step 2 from the goodwill impairment test. Instead, an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value should be recognized; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss should also be considered, if applicable. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 27, 2020	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-13 Measurement of Credit Losses on Financial Instruments(Topic 326)	The amendments guide on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendments require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments also require that credit losses on available-for-sale debt securities be presented as an allowance. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic.	First quarter of fiscal year ending September 29, 2021	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-09 Improvements to Employee Share-Based Payment Accounting (Topic 718)	The amendments aim to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, and certain classifications on the statement of cash flows. The amendments should be applied on either a prospective, retrospective, or modified-retrospective basis depending on the subtopic.	First quarter of fiscal year ending September 30, 2018	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (Topic 606)	The amendments, which do not change the core principle of the guidance in Topic 606, clarify the implementation guidance on principal versus agent considerations, including how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-07 Simplifying the Transition to the Equity Method of Accounting (Topic 323)	The amendments eliminate the requirement to retroactively apply the equity method of accounting when an investment qualifies for the use of the equity method due to an increase in the level of ownership interest or degree of influence. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.

7

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2016-04 Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) (Subtopic 405-20)	The amendments require entities to recognize liabilities related to the sale of prepaid stored-value products redeemable for goods, services or cash as financial liabilities in the scope of ASC 405. Additionally, the new guidance amends ASC 405-20 to include a narrow scope exception requiring entities to recognize breakage for these liabilities in a way that is consistent with how gift card breakage will be recognized under the new revenue recognition standard. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-02 Leases (Topic 842)	The amendments require lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is largely unchanged. The amendments should be applied on a modified retrospective basis.	First quarter of fiscal year ending September 27, 2020	The adoption of this ASU will result in a significant increase to the Company’s Consolidated Balance Sheets for lease liabilities and right-of-use assets, and the Company is currently evaluating the other effects of adoption of this ASU on its Consolidated Financial Statements.
ASU No. 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)	The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet in year of adoption. Early adoption is permitted for only certain amendments of the update.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2015-17 Balance Sheet Classification of Deferred Taxes (Topic 740)	The amendments simplify the presentation of deferred income taxes by requiring that all deferred tax liabilities and assets be classified as noncurrent in the statement of financial position. The amendments may be applied on either a prospective or retrospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330)	The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost and net realizable value. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606)	The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the timing, method, and impact that the adoption of these provisions will have on the Company’s consolidated financial statements.

8

(3) Fair Value Measurements

The Company holds money market fund investments that are classified as cash equivalents that are measured at fair value on a recurring basis based on quoted prices in active markets for identical assets. The Company also holds available-for-sale securities that are valued using a series of multi-dimensional relational models and series of matrices with standard inputs obtained from readily available pricing sources and other observable market data, such as benchmark yields and base spread. Equity interests measured at fair value are based on quoted prices for similar assets in active markets.

The carrying amounts of accrued payroll, bonuses and other benefits due team members, and other accrued expenses approximate fair value because of their short maturities. Store closure reserves and estimated workers’ compensation claims are recorded at net present value to approximate fair value.

Assets Measured at Fair Value on a Recurring Basis

The Company held the following financial assets measured at fair value on a recurring basis based on the hierarchy levels indicated (in millions):

April 9, 2017	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	2	$	—	$	—	$	2
Marketable securities - available-for-sale:
Municipal bonds	—		25		—		25
Variable-rate demand notes	—		451		—		451
Total	$	2	$	476	$	—	$	478

September 25, 2016	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	62	$	—	$	—	$	62
Commercial paper	—		30		—		30
Municipal bonds	—		46		—		46
Marketable securities - available-for-sale:
Commercial paper	—		30		—		30
Municipal bonds	—		26		—		26
Variable rate demand notes	—		323		—		323
Total	$	62	$	455	$	—	$	517

The estimated fair value of the Company’s long-term debt is included in Note 8 “Long-Term Debt.”

Assets Measured at Fair Value on a Nonrecurring Basis

During the twenty-eight weeks ended April 9, 2017, the Company recorded fair value adjustments, based on hierarchy level 3 inputs, totaling approximately $34 million related to certain locations for which asset value exceeded expected future cash flows, which were primarily included in the “Relocation, store closure and lease termination cost” line item on the Consolidated Statement of Operations. These impairment charges reduced the carrying value of related long-term assets to an immaterial fair value.

(4) Investments

The Company holds investments primarily in marketable securities that are classified as short-term available-for-sale securities. The Company held the following investments at fair value as of the dates indicated (in millions):

	April 9, 2017		September 25, 2016
Short-term marketable securities - available-for-sale:
Commercial paper	$	—	$	30
Municipal bonds	25		26
Variable rate demand notes	451		323
Total short-term marketable securities	$	476	$	379

9

Gross unrealized holding gains and losses were not material at April 9, 2017 or September 25, 2016. There were no available-for-sale securities in an unrealized loss position at April 9, 2017. Available-for-sale securities totaling approximately $33 million were in unrealized loss positions at September 25, 2016. The aggregate value of available-for-sale securities in a continuous unrealized loss position for greater than 12 months was not material at September 25, 2016. The Company did not recognize any other-than-temporary impairments during the twenty-eight weeks ended April 9, 2017 or fiscal year ended September 25, 2016. The average effective maturity of the Company’s short-term available-for-sale securities was less than one month at April 9, 2017 and September 25, 2016.

At April 9, 2017 and September 25, 2016, the Company held approximately $24 million and $19 million in equity interests which were accounted for using the cost method of accounting. Equity interests accounted for using the equity method were not material at April 9, 2017 or September 25, 2016.

(5) Goodwill and Other Intangible Assets

There were no additions or adjustments to goodwill during the twenty-eight weeks ended April 9, 2017 or April 10, 2016. Additions of other intangible assets were not material during the twenty-eight weeks ended April 9, 2017 or the same period of the prior fiscal year. The components of intangible assets as of the dates indicated were as follows (in millions):

	April 9, 2017					September 25, 2016
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Definite-lived contract-based	$	118	$	(56	)	$	120	$	(55	)
Indefinite-lived contract-based	9					9
Total	$	127	$	(56	)	$	129	$	(55	)

Amortization expense associated with intangible assets was not material during the twelve weeks ended April 9, 2017 or the same period of the prior fiscal year. Future amortization expense associated with the net carrying amount of definite-lived intangible assets is estimated to be as follows (in millions):

Remainder of fiscal year 2017	$	3
Fiscal year 2018	5
Fiscal year 2019	5
Fiscal year 2020	5
Fiscal year 2021	4
Future fiscal years	40
Total	$	62

(6) Store and Facility Closures

During the first quarter of fiscal year 2017, the Company announced plans to close nine stores and three commissary kitchens and recorded non-cash charges of approximately $34 million to adjust the long-lived assets of these locations to fair value. During the second quarter of fiscal year 2017, the Company closed all nine stores and all three commissary kitchens and recorded additional charges of $30 million primarily related to remaining lease obligations and Team Member severance. The Company expects to incur no material additional charges related to these closures.

(7) Reserves for Closed Properties

The following table provides a summary of activity in reserves for closed properties during the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 25, 2016 (in millions):

	April 9, 2017			September 25, 2016
Beginning balance	$	26		$	28
Additions	27			6
Usage	(5		)	(10		)
Adjustments	1			2
Ending balance	$	49		$	26

10

(8) Long-Term Debt

Credit Agreement

The Company’s revolving credit facility under a credit agreement dated as of November 2, 2015 (the “Credit Agreement”) provides for an unsecured revolving credit facility in the aggregate principal amount of $500 million, which may be increased from time to time by up to $250 million. The Credit Agreement also provides for a letter of credit subfacility of up to $250 million.

At April 9, 2017, the Company had no amounts outstanding under the credit facility. Commitment fees paid on undrawn amounts were not material during the twenty-eight weeks ended April 9, 2017. At April 9, 2017, the Company was in compliance with its covenants under the Credit Agreement.

During the twenty-eight weeks ended April 10, 2016, the Company borrowed and repaid $300 million under the Credit Agreement. At April 10, 2016, the Company had no amounts outstanding.

Senior Notes

The Company has outstanding $1.0 billion of senior notes (the “Notes”). The Notes bear interest at a fixed rate equal to 5.2% per year, payable semiannually, and mature on December 3, 2025. The effective interest rate of the Notes, which includes interest on the Notes and amortization of discount and issuance costs, is approximately 5.28%. At April 9, 2017, the Company was in compliance with all covenants under the indenture governing the Notes. The estimated fair value of the Notes at April 9, 2017, based on observable market prices (Level 2), exceeded the carrying value by approximately $72 million.

The Notes and Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by certain wholly owned domestic subsidiaries of the Company (the “Guarantors”). For additional information regarding the Guarantors see Note 14, Guarantor Financial Statement Information. The components of long-term debt as of the dates indicated were as follows (in millions):

	April 9, 2017			September 25, 2016
5.2% senior notes due 2025	$	1,000		$	1,000
Less: unamortized discount and debt issuance costs related to senior notes	(7		)	(7		)
Carrying value of senior notes	993			993
Capital lease obligations	56			58
Total long-term debt and capital lease obligations	1,049			1,051
Less: current installments	(2		)	(3		)
Total long-term debt and capital lease obligations, less current installments	$	1,047		$	1,048

(9) Income Taxes

Income taxes resulted in an effective tax rate of approximately 39.0% for the twelve and twenty-eight weeks ended April 9, 2017 compared to approximately 39.5% and 38.2%, respectively, for the same periods of the prior fiscal year. The lower effective tax rate for the twenty-eight weeks ended April 10, 2016 was due to the recognition of an environmental tax credit related to the development of a new store.

(10) Shareholders’ Equity

Dividends per Common Share

The following table provides a summary of dividends declared per common share during fiscal year 2017 to date and fiscal year 2016 (in millions, except per share amounts):

Date of declaration	Dividend per common share		Date of record	Date of payment	Total amount
Fiscal year 2017:
November 2, 2016	$	0.14	January 13, 2017	January 24, 2017	$	45
February 17, 2017 (1)	0.14		April 7, 2017	April 18, 2017	45
Fiscal year 2016:
November 4, 2015	$	0.135	January 15, 2016	January 26, 2016	$	44
March 9, 2016	0.135		April 8, 2016	April 19, 2016	44
June 7, 2016	0.135		July 1, 2016	July 12, 2016	43
September 22, 2016	0.135		October 3, 2016	October 14, 2016	43

⁽¹⁾ Dividend accrued at April 9, 2017

11

On May 10, 2017, the Company’s Board of Directors (“Board”) announced a 29% increase in the regular quarterly dividend to $0.18 per share, and the next quarterly dividend to be declared is expected to be payable on July 11, 2017 to shareholders of record as of June 30, 2017.

Treasury Stock

As of April 9, 2017, one share repurchase program remained in effect, with prior programs having been fully utilized, expired or cancelled. The following table outlines the share repurchase program authorized by the Board, and the related repurchase activity as of April 9, 2017 (in millions):

Effective date	Expiration date	Amount authorized		Cost of repurchases		Authorization available
November 4, 2015	Not applicable	$	1,000	$	557	$	443

Share repurchase activity for the twelve and twenty-eight weeks ended April 9, 2017 was immaterial. Share repurchase activity for the twelve and twenty-eight weeks ended April 10, 2016 was as follows (in millions, except per share amounts):

	Twelve weeks ended		Twenty-eight weeks ended
	April 10, 2016		April 10, 2016
Number of common shares acquired	3.5		24.6
Average price per common share acquired	$	28.88	$	29.81
Total cost of common shares acquired	$	100	$	734

On May 10, 2017, the Board authorized a new $1.25 billion share repurchase program, with the intent to opportunistically utilize the authorization over the next 18 months. The new authorization will replace the Company’s existing program.

The Company reissued approximately 0.6 million treasury shares at cost of approximately $21 million and approximately 0.5 million treasury shares at cost of approximately $22 million to satisfy the issuance of common stock pursuant to team member stock plans during the twenty-eight weeks ended April 9, 2017 and April 10, 2016, respectively. At April 9, 2017 and September 25, 2016, the Company held in treasury approximately 58.2 million shares and 58.7 million shares, respectively, totaling approximately $2.0 billion.

(11) Earnings per Share

The computation of basic earnings per share is based on the number of weighted average common shares outstanding during the period. The computation of diluted earnings per share includes the dilutive effect of common stock equivalents consisting of incremental common shares deemed outstanding from the assumed exercise of stock options and the dilutive effect of restricted stock awards. A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows (in millions, except per share amounts):

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Net income (numerator for basic and diluted earnings per share)	$	99	$	142	$	194	$	299
Weighted average common shares outstanding (denominator for basic earnings per share)	318.5		324.7		318.3		331.7
Incremental common shares attributable to dilutive effect of share-based awards	0.4		0.7		0.4		1.0
Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share)	318.9		325.4		318.7		332.7
Basic earnings per share	$	0.31	$	0.44	$	0.61	$	0.90
Diluted earnings per share	$	0.31	$	0.44	$	0.61	$	0.90

12

The computation of diluted earnings per share for the twelve and twenty-eight weeks ended April 9, 2017 and does not include share-based awards to purchase approximately 24.0 million shares and 24.3 million shares of common stock, respectively, due to their antidilutive effect. The computation of diluted earnings per share for the twelve and twenty-eight weeks ended April 10, 2016 does not include share-based awards to purchase approximately 20.9 million shares and 19.7 million shares of common stock, respectively, due to their antidilutive effect.

(12) Share-Based Payments

Share-based payment expense, primarily included in the “Selling, general and administrative expenses” line item on the Consolidated Statements of Operations, totaled approximately $9 million and $23 million, respectively, during the twelve and twenty-eight weeks ended April 9, 2017, and totaled approximately $12 million and $28 million, respectively, for the same periods of the prior fiscal year.

At April 9, 2017 and September 25, 2016, approximately 31.2 million shares and 29.8 millionshares of the Company’s common stock, respectively, were available for future stock incentive grants. At April 9, 2017 and September 25, 2016, there was approximately $51 million and $73 million of unrecognized share-based payment expense, respectively, related to unvested stock options, net of estimated forfeitures, related to approximately 9.7 million shares and 10.5 million shares, respectively. The Company anticipates this expense to be recognized over a weighted average period of 2.5 years.

(13) Commitments and Contingencies

The Company is exposed to claims and litigation matters arising in the ordinary course of business and uses various methods to resolve these matters in a manner that we believe best serves the interests of our stakeholders. From time to time we are a party to legal proceedings including matters involving shareholder claims, personnel and employment issues, personal injury, product liability, protecting our intellectual property, regulatory practices, acquisitions and other proceedings arising in the ordinary course of business. These matters have not resulted in any material losses to date. Certain litigation cases have been certified as class or collective actions and may seek substantial damages.

Our primary contingencies are associated with insurance and self-insurance obligations and litigation matters. Additionally, the Company has retention agreements with certain members of Company management which provide for payments under certain circumstances including change of control. Estimation of our insurance and self-insurance liabilities requires significant judgments, and actual claim settlements and associated expenses may differ from our current provisions for loss. We have exposures to loss contingencies arising from pending or threatened litigation for which assessing and estimating the outcomes of these matters involve substantial uncertainties.

The Company evaluates contingencies on an ongoing basis and has established loss provisions for matters in which losses are probable and the amount of loss can be reasonably estimated, and is not currently a party to any legal proceeding that management believes could have a material adverse effect on our results of operations. Insurance and legal settlement liabilities are included in the “Other current liabilities” line item on the Consolidated Balance Sheets. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities.

13

(14) Guarantor Financial Statement Information

The Senior Notes issued on December 3, 2015 and Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by certain wholly owned domestic subsidiaries of the Company (the “Guarantors”). Supplemental condensed consolidating financial information of the Company, including such information for the Guarantors is presented below:

Consolidated Balance Sheets (unaudited)

(In millions)

	April 9, 2017
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	310	$	102	$	—		$	412
Short-term investments - available-for-sale securities	—		476		—		—			476
Restricted cash	—		118		6		—			124
Accounts receivable	—		233		22		—			255
Intercompany receivable	—		728		—		(728		)	—
Merchandise inventories	—		438		70		—			508
Prepaid expenses and other current assets	1		75		43		—			119
Deferred income taxes	—		214		—		—			214
Total current assets	1		2,592		243		(728		)	2,108
Property and equipment, net of accumulated depreciation and amortization	—		3,082		387		—			3,469
Investments in consolidated subsidiaries	4,802		107		476		(5,385		)	—
Goodwill	—		703		7		—			710
Intangible assets, net of accumulated amortization	1		61		9		—			71
Deferred income taxes	—		108		6		—			114
Other assets	—		13		28		—			41
Total assets	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	2	$	—	$	—		$	2
Accounts payable	—		224		89		—			313
Intercompany payable	389		—		339		(728		)	—
Accrued payroll, bonus and other benefits due team members	—		368		25		—			393
Dividends payable	45		—		—		—			45
Other current liabilities	18		530		36		—			584
Total current liabilities	452		1,124		489		(728		)	1,337
Long-term debt and capital lease obligations, less current installments	993		46		8		—			1,047
Deferred lease liabilities	—		615		50		—			665
Other long-term liabilities	—		104		1		—			105
Total liabilities	1,445		1,889		548		(728		)	3,154
Commitments and contingencies
Total shareholders’ equity	3,359		4,777		608		(5,385		)	3,359
Total liabilities and shareholders’ equity	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513

14

Consolidated Balance Sheets (unaudited)

(In millions)

	September 25, 2016
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	254	$	97	$	—		$	351
Short-term investments - available-for-sale securities	—		379		—		—			379
Restricted cash	—		114		8		—			122
Accounts receivable	—		216		26		—			242
Intercompany receivable	—		649		—		(649		)	—
Merchandise inventories	—		441		76		—			517
Prepaid expenses and other current assets	—		150		17		—			167
Deferred income taxes	—		197		—		—			197
Total current assets	—		2,400		224		(649		)	1,975
Property and equipment, net of accumulated depreciation and amortization	—		3,063		379		—			3,442
Investments in consolidated subsidiaries	4,593		103		472		(5,168		)	—
Goodwill	—		702		8		—			710
Intangible assets, net of accumulated amortization	1		63		10		—			74
Deferred income taxes	—		94		6		—			100
Other assets	—		16		24		—			40
Total assets	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	3	$	—	$	—		$	3
Accounts payable	—		227		80		—			307
Intercompany payable	317		—		333		(650		)	—
Accrued payroll, bonus and other benefits due team members	—		381		26		—			407
Dividends payable	43		—		—		—			43
Other current liabilities	17		536		28		—			581
Total current liabilities	377		1,147		467		(650		)	1,341
Long-term debt and capital lease obligations, less current installments	993		48		7		—			1,048
Deferred lease liabilities	—		592		48		—			640
Other long-term liabilities	—		87		1		—			88
Total liabilities	1,370		1,874		523		(650		)	3,117
Commitments and contingencies
Total shareholders’ equity	3,224		4,567		600		(5,167		)	3,224
Total liabilities and shareholders’ equity	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341

15

Consolidated Statements of Operations (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	3,547	$	220		$	(30	)	$	3,737
Cost of goods sold and occupancy costs	—			2,332		161			(30		)	2,463
Gross profit	—			1,215		59			—			1,274
Selling, general and administrative expenses	—			1,001		56			—			1,057
Pre-opening expenses	—			12		—			—			12
Relocation, store closure and lease termination costs	—			34		—			—			34
Operating income	—			168		3			—			171
Interest expense	(11		)	—		—			—			(11		)
Investment and other expense	—			—		(1		)	3			2
Equity in net income of subsidiaries	106			1		3			(110		)	—
Income before income taxes	95			169		5			(107		)	162
Provision for income taxes	(4		)	66		1			—			63
Net income	$	99		$	103	$	4		$	(107	)	$	99

	Twelve weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Sales	$	—		$	3,512	$	223	$	(39	)	$	3,696
Cost of goods sold and occupancy costs	—			2,290		155		(39		)	2,406
Gross profit	—			1,222		68		—			1,290
Selling, general and administrative expenses	—			971		57		—			1,028
Pre-opening expenses	—			17		1		—			18
Relocation, store closure and lease termination costs	—			3		—		—			3
Operating income	—			231		10		—			241
Interest expense	(11		)	—		—		—			(11		)
Investment and other expense	—			4		—		1			5
Equity in net income of subsidiaries	149			3		9		(161		)	—
Income before income taxes	138			238		19		(160		)	235
Provision for income taxes	(4		)	94		3		—			93
Net income	$	142		$	144	$	16	$	(160	)	$	142

16

Consolidated Statements of Operations (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,219	$	535		$	(98	)	$	8,656
Cost of goods sold and occupancy costs	—			5,442		386			(96		)	5,732
Gross profit	—			2,777		149			(2		)	2,924
Selling, general and administrative expenses	—			2,338		136			—			2,474
Pre-opening expenses	—			30		3			—			33
Relocation, store closure and lease termination costs	—			73		1			—			74
Operating income	—			336		9			(2		)	343
Interest expense	(26		)	—		—			—			(26		)
Investment and other expense	—			—		(2		)	3			1
Equity in net income of subsidiaries	210			3		4			(217		)	—
Income before income taxes	184			339		11			(216		)	318
Provision for income taxes	(10		)	131		3			—			124
Net income	$	194		$	208	$	8		$	(216	)	$	194

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,096	$	512		$	(84	)	$	8,524
Cost of goods sold and occupancy costs	—			5,318		356			(81		)	5,593
Gross profit	—			2,778		156			(3		)	2,931
Selling, general and administrative expenses	—			2,266		136			—			2,402
Pre-opening expenses	—			27		4			—			31
Relocation, store closure and lease termination costs	—			5		—			—			5
Operating income	—			480		16			(3		)	493
Interest expense	(18		)	—		—			—			(18		)
Investment and other income (expense)	—			9		(2		)	2			9
Equity in net income of subsidiaries	310			6		15			(331		)	—
Income before income taxes	292			495		29			(332		)	484
Provision for income taxes	(7		)	187		5			—			185
Net income	$	299		$	308	$	24		$	(332	)	$	299

17

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net income	$	99	$	103	$	4		$	(107	)	$	99
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		1		(3		)	—			(2		)
Other comprehensive income (loss), net of tax	—		1		(3		)	—			(2		)
Comprehensive income	$	99	$	104	$	1		$	(107	)	$	97

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	194	$	208		$	8	$	(216	)	$	194
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		(3		)	—		—			(3		)
Other comprehensive income (loss), net of tax	—		(3		)	—		—			(3		)
Comprehensive income	$	194	$	205		$	8	$	(216	)	$	191

	Twelve weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	142	$	144		$	16	$	(160	)	$	142
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		(4		)	14		—			10
Other comprehensive loss, net of tax	—		(4		)	14		—			10
Comprehensive income	$	142	$	140		$	30	$	(160	)	$	152

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	299	$	308	$	24	$	(332	)	$	299
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		—		—		—			—
Other comprehensive loss, net of tax	—		—		—		—			—
Comprehensive income	$	299	$	308	$	24	$	(332	)	$	299

18

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	(26	)	$	628		$	22		$	—		$	624
Cash flows from investing activities
Purchases of property, plant and equipment	—			(351		)	(25		)	—			(376		)
Purchases of available-for-sale securities	—			(356		)	—			—			(356		)
Sales and maturities of available-for-sale securities	—			258			—			—			258
Payment for purchase of acquired entities, net of cash acquired	—			—			—			—			—
Intercompany activity	107			—			—			(107		)	—
Other investing activities	—			(6		)	—			—			(6		)
Net cash provided by (used in) investing activities	107			(455		)	(25		)	(107		)	(480		)
Cash flows from financing activities
Purchases of treasury stock	—			—			—			—			—
Common stock dividends paid	(88		)	—			—			—			(88		)
Issuance of common stock	10			—			—			—			10
Excess tax benefit related to exercise of team member stock options	—			—			—			—			—
Proceeds from long-term borrowings	—			—			—			—			—
Proceed for revolving line of credit	—			—			—			—			—
Payments on long-term debt and capital lease obligations	(2		)	—			—			—			(2		)
Intercompany activity	—			(113		)	6			107			—
Other financing activities	(1		)	—			—			—			(1		)
Net cash provided by (used in) financing activities	(81		)	(113		)	6			107			(81		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			—			—			—
Net change in cash, cash equivalents, and restricted cash	—			60			3			—			63
Cash, cash equivalents, and restricted cash at beginning of period	—			368			105			—			473
Cash, cash equivalents, and restricted cash at end of period	$	—		$	428		$	108		$	—		$	536

19

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	—		$	547		$	28		$	—		$	575
Cash flows from investing activities
Purchases of property, plant and equipment	—			(302		)	(36		)	—			(338		)
Purchases of available-for-sale securities	—			(176		)	—			—			(176		)
Sales and maturities of available-for-sale securities	—			350			—			—			350
Payment for purchase of acquired entities, net of cash acquired	—			—			(11		)	—			(11		)
Intercompany activity	(174		)	—			—			174			—
Other investing activities	—			(10		)	—			—			(10		)
Net cash used in investing activities	(174		)	(138		)	(47		)	174			(185		)
Cash flows from financing activities
Purchases of treasury stock	(734		)	—			—			—			(734		)
Common stock dividends paid	(90		)	—			—			—			(90		)
Issuance of common stock	11			—			—			—			11
Excess tax benefit related to exercise of team member stock options	1			—			—			—			1
Proceeds from long-term borrowings	999			—			—			—			999
Proceed for revolving line of credit	300			—			—			—			300
Payments on long-term debt and capital lease obligations	(305		)	—			—			—			(305		)
Intercompany activity	—			155			19			(174		)	—
Other financing activities	(8		)	—			—			—			(8		)
Net cash provided by financing activities	174			155			19			(174		)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			2			—			2
Net change in cash, cash equivalents, and restricted cash	—			564			2			—			566
Cash, cash equivalents, and restricted cash at beginning of period	—			261			103			—			364
Cash, cash equivalents, and restricted cash at end of period	$	—		$	825		$	105		$	—		$	930

(15) Subsequent Events

On May 10, 2017, the Board authorized a new $1.25 billion share repurchase program, with the intent to opportunistically utilize the authorization over the next 18 months. The new authorization will replace the Company’s existing program.

20

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Disclaimer on Forward-looking Statements

Certain statements in this report and from time to time in other filings with the Securities and Exchange Commission, news releases, reports, and other written and oral communications made by us and our representatives, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by words such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “see,” “continue,” “could,” “can,” “may,” “will,” “likely,” “depend,” “should,” “would,” “plan,” “predict,” “target,” and similar expressions, and include references to assumptions and relate to our future prospects, developments and business strategies. Except for the historical information contained herein, the matters discussed in this analysis are forward-looking statements that involve risks and uncertainties that may cause our actual results to be materially different from such forward-looking statements and could materially adversely affect our business, financial condition, operating results and cash flows. These risks and uncertainties include general business conditions, changes in overall economic conditions that impact consumer spending, the impact of competition and other factors which are often beyond the control of the Company, as well other risks listed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016 and risks and uncertainties not presently known to us or that we currently deem immaterial. We wish to caution you that you should not place undue reliance on such forward-looking statements, which speak only as of the date on which they were made. We do not undertake any obligation to update forward-looking statements.

This information should be read in conjunction with the consolidated financial statements and the accompanying notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016.

Overview

Whole Foods Market is the leading natural and organic foods supermarket, the first national “Certified Organic” grocer, and uniquely positioned as America’s Healthiest Grocery Store™. We are a mission-driven company that aims to set the standards of excellence in food retailing. Our success is measured by customer satisfaction, team member happiness and excellence, return on invested capital, active environmental stewardship, service in our local and global communities, and win-win supplier partnerships, among other things. Through our growth, we have had a significant and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance. The Company incorporated in 1978, opened the first Whole Foods Market store in 1980, and as of April 9, 2017, operated 461 stores: 440 stores in 42 U.S. states and the District of Columbia; 12 stores in Canada; and 9 stores in the United Kingdom. We have one operating segment, natural and organic foods supermarkets.

Our continued growth depends on our ability to increase sales in our comparable stores and open new stores. Our growth strategy includes opening new stores in existing and new areas and operating those stores successfully. The Company’s average weekly sales and gross profit as a percentage of sales are typically highest in the second and third fiscal quarters, and lowest in the fourth fiscal quarter due to seasonally slower sales during the summer months. Gross profit as a percentage of sales is typically lower in the first fiscal quarter due to the product mix of holiday sales.

Sales of a store are deemed to be comparable commencing in the fifty-seventh full week after the store was opened or acquired. The calculation of comparable store sales excludes sales from relocated and remodeled stores with square footage changes greater than 20% to reduce the impact of square footage changes on the comparison. Stores closed for eight or more days are excluded from the comparable store base from the first fiscal week of closure until re-opened for a full fiscal week. Comparable store sales growth is calculated on a same-calendar-week to same-calendar-week constant currency basis. Companies define comparable store sales differently; thus growth rates across companies may not be comparable.

The Company reports its results of operations on a 52- or 53-week fiscal year ending on the last Sunday in September. Fiscal years 2017 and 2016 are 52-week years.

Economic and Industry Factors

Food retailing is a large, intensely competitive industry and is evolving at an incredibly fast pace. Consumers have more options than ever before. Our competition includes but is not limited to local, regional, national and international conventional and specialty supermarkets, natural foods stores, warehouse membership clubs, online retailers, smaller specialty stores, farmers’ markets, restaurants and home delivery, and meal solution companies, each of which competes with us on the basis of store ambiance and experience, product selection and quality, customer service, price, convenience or a combination of these factors.

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We offer the broadest selection of high-quality natural and organic products, with a strong emphasis on perishable foods. We believe our high quality standards differentiate our stores from other supermarkets and enable us to attract and maintain a broad base of loyal customers. Our groundbreaking quality standards ban hundreds of ingredients commonly found in products sold by other retailers, as well as products grown or produced by manufacturing, farming, fishing and ranching practices that don’t measure up.

Second Quarter of Fiscal Year 2017 Summary

• Record sales of $3.7 billion, a 1.1% increase over the prior year

• Comparable store sales decrease of 2.8%

• Net income of $99 million, or 2.6% of sales

• Diluted earnings per share of $0.31

• EBITDA of $287 million, or 7.7% of sales

• Return on Invested Capital (“ROIC”) of 10.0%

Results include a charge of $30 million, or $0.06 per diluted share, related to previously announced store and facility closures. Excluding this charges, net income was $117 million, or 3.1% of sales; diluted earnings per share were $0.37; EBITDA margin was 8.5%; and ROIC was 11.1%. Please refer to the reconciliation of GAAP measures to non-GAAP measures included in this Management’s Discussion and Analysis. During the twelve weeks ended April 9, 2017, we produced approximately $340 million in cash flows from operations and returned approximately $45 million in quarterly dividends to common shareholders. At April 9, 2017, we had approximately $1.0 billion in total debt and approximately $1.4 billion in total available capital.

Fiscal Year 2017 Updated Outlook

The Company’s outlook excludes charges of $63 million, or $0.12 per diluted share, related to store and facility closures and $13 million, or $0.02 per diluted share, associated with Walter Robb’s separation agreement incurred in the first and second quarters, as well as potential future LIFO adjustments and share repurchases. The Company remains focused on the metrics it believes are key to the long-term health of its business and for fiscal year 2017 is targeting:

• Sales growth of 1.0% of greater

• Comps of approximately -2.5% or better

• Ending square footage growth of approximately 5% net of closures, reflecting approximately 30 new stores, including up to seven relocations and three 365 stores

• Diluted EPS of $1.30 or greater

• EBITDA margin of approximately 8%

• Capital expenditures of approximately 4% of sales

• ROIC of approximately 11%

The Company’s outlook implies 0.5% sales growth in the second half of the year, primarily reflecting the impact of recent closures, including stores closed for relocations and a major remodel. The Company is on track to achieve its cost reduction goal but expects these savings to be more than offset by investments in marketing, value and technology, as well as higher occupancy, depreciation and other costs. In addition, the Company is now estimating additional costs of approximately $16 million, or $0.03 per diluted share, related to the accelerated rollout of Affinity and other technology initiatives as well as the engagement of a consulting firm related to its cost reduction efforts. Therefore, the Company now expects a decline in operating margin, excluding LIFO, of up to 70 basis points in the third quarter and 95 basis points in the fourth quarter.

Overview of Strategic Initiatives and Longer-Term Targets

The Company provided a comprehensive shareholder update regarding new and accelerated initiatives to increase profitability, improve operational performance, and enhance shareholder value, including 2020 financial targets. The Company has identified a detailed path to sustained top-line growth, supported by category management and pricing initiatives, enhanced marketing and Affinity programs, and disciplined organic growth. Key components include:

• Accelerating Affinity (customer rewards) rollout to all U.S. stores by calendar year end 2017. The new program combines the best elements of the Company’s My 365 Rewards and pilot programs, which have successfully driven increased trips and bigger baskets from participants by providing more personalized and relevant communications as well as new digital experiences;

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• Restructuring purchasing program by calendar year end 2017 and implementing category management across all U.S. stores by fiscal year end 2018. Robust data analytics, state-of-the-art technology and a unified purchasing structure will provide optimized product assortment and pricing, leading to lower costs, lower prices and higher sales;

• Returning to positive comps and earnings growth by fiscal year end 2018, and providing FY 2020 financial targets based on the execution of new and accelerated initiatives. For 2020, the Company expects to achieve:

• Total sales of over $18 billion;

• Comparable store sales greater than 2.0%;

• SG&A as a percentage of sales of less than 27%;

• EBITDA margin greater than 9.5%; and,

• Cash flow from operations of over $1.2 billion

• Realizing $300 million in additional cost savings by fiscal year end 2020. Key components include: store labor transformation including standardization of in-store processes and labor allocation; support function efficiencies; and supply chain optimization through an accelerated order-to-shelf rollout. The Company also has engaged a top-tier consulting firm to help identify and support the implementation of these new cost savings measures. These savings are in addition to the $270 million already realized as part of the Company’s prior cost reduction plan, which is on track to reach $300 million by fiscal year end 2017.

Results of Operations

The following table sets forth the Company’s consolidated statements of operations data expressed as a percentage of sales:

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold and occupancy costs	65.9		65.1		66.2		65.6
Gross profit	34.1		34.9		33.8		34.4
Selling, general and administrative expenses	28.3		27.8		28.6		28.2
Pre-opening expenses	0.3		0.5		0.4		0.4
Relocation, store closure and lease termination costs	0.9		0.1		0.9		0.1
Operating income	4.6		6.5		4.0		5.8
Interest expense	(0.3	)	(0.3	)	(0.3	)	(0.2	)
Investment and other income	0.1		0.1		—		0.1
Income before income taxes	4.3		6.4		3.7		5.7
Provision for income taxes	1.7		2.5		1.4		2.2
Net income	2.6	%	3.8	%	2.2	%	3.5	%

Figures may not sum due to rounding

Sales for the twelve and twenty-eight weeks ended April 9, 2017 totaled approximately $3.7 billion and $8.7 billion, respectively, increasing 1.1% and 1.5%, respectively, over the same period of the prior fiscal year. Comparable store sales during the twelve and twenty-eight weeks ended April 9, 2017 and the same period of the prior fiscal year are reflected in the table below.

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Comparable store sales	(2.8	)%	(3.0	)%	(2.6	)%	(2.3	)%
Change in transactions	(3.0	)%	(2.1	)%	(3.2	)%	(1.8	)%
Change in basket size	0.2	%	(0.9	)%	0.6	%	(0.5	)%

We have seen stability in our comparable store sales over the last four quarters. Comparable store sales for the twelve weeks ended April 9, 2017 were negatively impacted by Easter shifting to the third quarter of fiscal year 2017 versus the second quarter of fiscal year 2016. Comparable stores contributed approximately 94.8% and 95.0% of total sales for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately 94.4% and 94.0%, respectively, for the same periods of the prior fiscal year. As of April 9, 2017, there were 439 locations in the comparable store base compared to 411 locations at April 10, 2016.

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The Company’s gross profit as a percentage of sales for the twelve and twenty-eight weeks ended April 9, 2017 was approximately 34.1% and 33.8% compared to approximately 34.9% and 34.4% for the same periods of the prior fiscal year. Gross margin for the twelve weeks ended April 9, 2017 declined 82 basis points to 34.1%, as compared to the twelve weeks ended April 10, 2016, driven by increases in occupancy costs and cost of goods sold as a percentage of sales.

Selling, general and administrative expenses as a percentage of sales were approximately 28.3% and 28.6% for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately 27.8% and 28.2%, respectively, for the same periods of the prior fiscal year. During the twenty-eight weeks ended April 9, 2017, selling, general and administrative expenses included a charge of $13 million associated with the separation agreement for Walter Robb, our former Co-Chief Executive Officer. Excluding this charge, selling, general and administrative expenses increased 26 basis points year over year for the twenty-eight weeks ended April 9, 2017 driven by an increase in marketing and depreciation expenses as a percentage of sales.

Pre-opening expenses totaled approximately $12 million and $33 million for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately $18 million and $31 million, respectively, for the same periods of the prior fiscal year.

Relocation, store closure and lease termination costs totaled approximately $34 million and $74 million for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately $3 million and $5 million, respectively, for the same periods of the prior fiscal year. Relocation, store closure and lease termination costs for the twelve and twenty-eight weeks ended April 9, 2017 includes approximately $30 million and $63 million, respectively, in charges related to the previously announced decision to close nine stores and three commissary kitchens.

The numbers of stores opened and relocated were as follows:

	Twelve weeks ended		Twenty-eight weeks ended
	April 9, 2017	April 10, 2016	April 9, 2017	April 10, 2016
New stores	4	7	15	10
Relocated stores	2	1	4	1

Interest expense, primarily related to the Company’s $1.0 billion offering of 5.2% senior notes completed on December 3, 2015, totaled approximately $11 million and $26 million for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately $11 million and $18 million, respectively for the same periods of the prior fiscal year.

Investment and other income, which includes gift card breakage, interest income and investment gains and losses, and other income, was $2 million and $1 million for the twelve and twenty-eight weeks ended April 9, 2017, respectively, compared to approximately $5 million and $9 million, respectively, for the same periods of the prior fiscal year.

Income taxes resulted in an effective tax rate of approximately 39.0% for each of the twelve and twenty-eight weeks ended April 9, 2017 compared to approximately 39.5% and 38.2%, respectively, for the same periods of the prior fiscal year. The lower effective tax rate for the twenty-eight weeks ended April 10, 2016 was due to the recognition of an environmental tax credit related to the development of a new store.

Non-GAAP measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding adjusted diluted Earnings per Share (“EPS”), Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), adjusted EBITDA, Return on Invested Capital (“ROIC”) and adjusted ROIC as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. We believe that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to our results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of incentive compensation. Management believes ROIC and adjusted ROIC are useful to investors and analysts because each measures how effectively we are deploying our assets.

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The Company defines adjusted diluted EPS as net income plus charges for store and facility closures and Mr. Robb’s separation agreement divided by the weighted average shares outstanding and potential additional common shares outstanding. The following is a tabular reconciliation of the non-GAAP financial measures adjusted diluted EPS to GAAP diluted EPS, which the Company believes is the most directly comparable GAAP financial measure. Adjusted diluted EPS was as follows (in millions):

	Twelve weeks ended				Twenty-eight weeks ended
Adjusted Diluted EPS	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Net income	$	99	$	142	$	194	$	299
Store and facility closures, net of tax	18		—		38		—
Mr. Robb's separation agreement, net of tax	—		—		8		—
Adjusted Net income	$	117	$	142	$	240	$	299
Adjusted Diluted Earnings per Share	$	0.37	$	0.44	$	0.75	$	0.90
Weighted average shares outstanding	318.9		325.4		318.7		332.7

The Company defines adjusted EBITDA as EBITDA plus charges for Mr. Robb’s separation agreement and store and facility closures other than the related accelerated depreciation already included in depreciation and amortization. The following is a tabular reconciliation of the non-GAAP financial measures EBITDA to GAAP net income, which the Company believes is the most directly comparable GAAP financial measure. EBITDA was as follows (in millions):

	Twelve weeks ended						Twenty-eight weeks ended
	April 9, 2017			April 10, 2016			April 9, 2017			April 10, 2016
Net income	$	99		$	142		$	194		$	299
Provision for income taxes	63			93			124			185
Interest expense	11			11			26			18
Investment and other income	(2		)	(5		)	(1		)	(9		)
Operating income	171			241			343			493
Depreciation and amortization	116			112			305			259
EBITDA	287			353			648			752
Mr. Robb’s separation agreement	—			—			13			—
Store and facility closures, excluding accelerated depreciation	29			—			29			—
Adjusted EBITDA	$	316		$	353		$	690		$	752

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The Company defines ROIC as ROIC earnings divided by average invested capital. ROIC earnings and adjustments to ROIC earnings are defined in the following tabular reconciliation. Invested capital reflects a trailing four-quarter average. ROIC and adjusted ROIC were as follows (in millions):

	Fifty-two weeks ended
	April 9, 2017			April 10, 2016
Net income	$	402		$	509
Interest expense, net of tax	29			11
ROIC earnings	431			520
Total rent expense, net of tax (1)	295			273
Estimated depreciation on capitalized operating leases, net of tax (2)	(197		)	(182		)
ROIC earnings, including the effect of capitalized operating leases	$	529		$	611
Average working capital, excluding current portion of long-term debt	$	692		$	584
Average property and equipment, net	3,409			3,177
Average other assets	950			1,048
Average other liabilities	(731		)	(666		)
Average invested capital	4,320			4,143
Average estimated asset base of capitalized operating leases (3)	3,882			3,553
Average invested capital, including the effect of capitalized operating leases	$	8,202		$	7,696
ROIC	10.0		%	12.6		%
ROIC, including the effect of capitalized operating leases	6.5		%	7.9		%

	Fifty-two weeks ended
	April 9, 2017			April 10, 2016
Net income	$	402		$	509
Interest expense, net of tax	29			11
Adjustments, net of tax (4)	50			47
Adjusted ROIC earnings	481			567
Total rent expense, net of tax (1)	295			273
Estimated depreciation on capitalized operating leases, net of tax (2)	(197		)	(182		)
Adjusted ROIC earnings, including the effect of capitalized operating leases	$	579		$	658
Average working capital, excluding current portion of long-term debt	$	692		$	584
Average property and equipment, net	3,409			3,177
Average other assets	950			1,048
Average other liabilities	(731		)	(666		)
Average invested capital	4,320			4,143
Average estimated asset base of capitalized operating leases (3)	3,882			3,553
Average invested capital, including the effect of capitalized operating leases	$	8,202		$	7,696
Adjusted ROIC	11.1		%	13.7		%
Adjusted ROIC, including the effect of capitalized operating leases	7.1		%	8.6		%

⁽¹⁾ Total rent includes minimum base rent of all tendered leases

⁽²⁾ Estimated depreciation equals two-thirds of total rent expense

⁽³⁾ Estimated asset base equals eight times total annualized rent expense

⁽⁴⁾ Adjustments include charges related to Mr. Robb’s separation agreement, store and facility closures and asset impairments, as well as the Q4 2015 restructuring charges

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Liquidity and Capital Resources and Changes in Financial Condition

The following table summarizes the Company’s cash and short-term investments as of the dates indicated (in millions):

	April 9, 2017		September 25, 2016
Cash and cash equivalents	$	412	$	351
Short-term investments - available-for-sale securities	476		379
Total	$	888	$	730

Additionally, the Company had $500 million available under its revolving credit facility at April 9, 2017.

We generated cash flows from operating activities totaling approximately $624 million during the twenty-eight weeks ended April 9, 2017 compared to approximately $575 million during the same period of the prior fiscal year. The increase in cash flows from operating activities resulted primarily from increased non-cash expenses and changes in operating working capital. Depreciation and amortization was the primary non-cash expense included in cash flows from operating activities totaling approximately $305 million and $259 million for the twenty-eight weeks ended April 9, 2017 and April 10, 2016.

Net cash used in investing activities totaled approximately $480 million for the twenty-eight weeks ended April 9, 2017 compared to approximately $185 million for the same period of the prior fiscal year. Net purchases of available-for-sale securities totaled approximately $98 million during the twenty-eight weeks ended April 9, 2017 compared to approximately $174 million for the same period of the prior fiscal year. Our principal historical capital requirements have been the funding of the development or acquisition of new stores, the acquisition of property and equipment for existing stores, and technology investments. The required cash investment for new stores varies depending on the size of the new store, geographic location, degree of work performed by the landlord and complexity of site development issues. Capital expenditures for the twenty-eight weeks ended April 9, 2017 totaled approximately $376 million, of which approximately $227 million was for the development of new locations. Capital expenditures for the twenty-eight weeks ended April 10, 2016 totaled approximately $338 million, of which approximately $197 million was for the development of new locations.

We believe we will produce operating cash flows in excess of the capital expenditures needed to open the 90 stores, or 3.8 million square feet, in our current store development pipeline. We have a disciplined, opportunistic real estate strategy, opening stores in existing trade areas as well as new areas, including international locations. Our growth strategy is to expand primarily through new store openings, and while we may pursue acquisitions of smaller chains that provide access to desirable geographic areas and experienced team members, such acquisitions are not expected to significantly impact our future store growth or financial results.

Net cash used in financing activities totaled approximately $81 million for the twenty-eight weeks ended April 9, 2017 compared to approximately $174 million provided by financing activities for the same period of the prior fiscal year.

The Company’s revolving credit facility under a credit agreement dated as of November 2, 2015 (the “Credit Agreement”) provides for an unsecured revolving credit facility in the aggregate principal amount of $500 million. For the twenty-eight weeks ended April 9, 2017, the Company had no amounts outstanding on the Credit Agreement. During the twenty-eight weeks ended April 10, 2016, the Company borrowed and repaid $300 million under the Credit Agreement. At April 9, 2017, the Company was in compliance with all applicable debt covenants.

The Company has outstanding $1.0 billion aggregate principal amount of its 5.2% senior notes due 2025 (the “Notes”). The Notes will mature on December 3, 2025. At April 9, 2017, the Company was in compliance with all applicable debt covenants.

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Share repurchase activity for the twelve and twenty-eight weeks ended April 9, 2017 was immaterial. Share repurchase activity for fiscal year 2016 was as follows (in millions, except share per share amounts):

	Number of common shares acquired (1)	Average price per common share acquired		Total cost of common shares acquired
Fiscal year 2016:
First Quarter	21.2	$	29.96	$	634
Second Quarter	3.5	28.88		100
Third Quarter	6.5	30.01		195
Fourth Quarter	0.5	27.98		15
Total fiscal year 2016	31.7	$	29.82	$	944

⁽¹⁾ Number of shares may not sum due to rounding

As of April 9, 2017, one share repurchase program remained in effect, with prior programs having been fully utilized, expired or cancelled. The following table outlines the share repurchase program authorized by the Company’s Board of Directors (“Board”), and the related repurchase activity as of April 9, 2017 (in millions):

Effective date	Expiration date	Amount authorized		Cost of repurchases		Authorization available
November 4, 2015	Not applicable	$	1,000	$	557	$	443

On May 10, 2017, the Board authorized a new $1.25 billion share repurchase program, with the intent to opportunistically utilize the authorization over the next 18 months. The new authorization will replace the Company’s existing program.

During the first quarter of fiscal year 2017, the Board increased the Company’s quarterly dividend to $0.140 per common share from $0.135 per common share. The following table provides a summary of dividends declared per common share during fiscal year 2017 to date and fiscal year 2016 (in millions, except per share amounts):

Date of declaration	Dividend per common share		Date of record	Date of payment	Total amount
Fiscal year 2017:
November 2, 2016	$	0.140	January 13, 2017	January 24, 2017	$	45
February 17, 2017 (1)	0.140		April 7, 2017	April 18, 2017	45
Fiscal year 2016:
November 4, 2015	$	0.135	January 15, 2016	January 26, 2016	$	44
March 9, 2016	0.135		April 8, 2016	April 19, 2016	44
June 7, 2016	0.135		July 1, 2016	July 12, 2016	43
September 22, 2016	0.135		October 3, 2016	October 14, 2016	43

⁽¹⁾ Dividend accrued at April 9, 2017

On May 10, 2017, the Company’s Board of Directors (“Board”) announced a 29% increase in the regular quarterly dividend to $0.18 per share, and the next quarterly dividend to be declared is expected to be payable on July 11, 2017 to shareholders of record as of June 30, 2017.

The Company will pay future dividends at the discretion of the Board. The continuation of these payments, the amount of such dividends, and the form in which dividends are paid (cash or stock) depend on many factors, including the results of operations and the financial condition of the Company. Subject to these qualifications, the Company currently expects to pay dividends on a quarterly basis.

Net proceeds to the Company from the exercise of stock options by team members for the twenty-eight weeks ended April 9, 2017 totaled approximately $10 million compared to approximately $11 million for the same period of the prior fiscal year. The Company intends to keep its broad-based stock option program in place, but also intends to limit the number of shares granted in any one year so that annual earnings dilution from share-based payment expense will not exceed 10%. The Company believes this strategy is best aligned with its stakeholder philosophy because it limits future earnings dilution from options and at the same time retains the broad-based stock option plan, which the Company believes is important to team member morale, its unique corporate culture and its success. At April 9, 2017 and September 25, 2016, approximately 31.2 million shares and 29.8 million shares of our common stock, respectively, were available for future stock incentive grants.

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In addition to the Company’s debt obligations referenced above, the Company is committed under certain capital leases for rental of certain equipment, buildings and land, and certain operating leases for rental of facilities and equipment. These leases expire or become subject to renewal clauses at various dates through 2054. The following table shows payments due by period on contractual obligations as of April 9, 2017 (in millions):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Capital lease obligations (including interest)	$	87	$	5	$	10	$	10	$	62
Operating lease obligations (1)	9,267		199		1,074		1,165		6,829
Total	$	9,354	$	204	$	1,084	$	1,175	$	6,891

⁽¹⁾ Amounts exclude taxes, insurance and other related expense

Gross unrecognized tax benefits and related interest and penalties at April 9, 2017 were not material. Although a reasonably reliable estimate of the period of cash settlement with respective taxing authorities cannot be determined due to the high degree of uncertainty regarding the timing of future cash outflows associated with the Company’s unrecognized tax benefits, as of April 9, 2017, the Company does not expect tax audit resolution will reduce its unrecognized tax benefits in the next 12 months.

We periodically make other commitments and become subject to other contractual obligations that we believe to be routine in nature and incidental to the operation of the business. Management believes that such routine commitments and contractual obligations do not have a material impact on our business, financial condition or results of operations.

Our principal historical sources of liquidity have included cash generated by operations, available cash and cash equivalents, and short-term investments. Absent any significant change in market conditions, we expect planned expansion and other anticipated working capital and capital expenditure requirements for the next 12 months will be funded by these sources.

The Company intends to maintain an investment-grade profile and a balance sheet that provides the financial flexibility to pursue its strategic growth initiatives. There can be no assurance, however, that the Company will continue to generate cash flows at or above current levels or that other sources of capital will be available to us in the future.

Off-Balance Sheet Arrangements

Our off-balance sheet arrangements at April 9, 2017 consist of operating leases disclosed in the above contractual obligations table, as well as the Credit Agreement discussed above. Additionally, we enter into forward purchase agreements for certain products in the ordinary course of business. Purchase commitments do not exceed anticipated use within an operating cycle. We have no other off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our consolidated financial statements or financial condition.

Recent Accounting Pronouncements

Recent accounting pronouncements are included in Note 2 of the Notes to Consolidated Financial Statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our direct exposure to financial market risk results from fluctuations in foreign currency exchange rates and interest rates. There have been no material changes to our market risks as disclosed in our Annual Report on Form 10-K, for the fiscal year ended September 25, 2016.

Item 4. Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosure. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Other than as described above, there have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings.

Information related to the Company’s legal proceedings is discussed in Note 13 of the Notes to Consolidated Financial Statements in Part I of this report.

Item 1A. Risk Factors.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 25, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information about the Company’s share repurchase activity during the twelve weeks ended April 9, 2017.

Period (1)	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (2)	Approximate dollar value of shares that may yet be purchased under the plans or programs (2)
September 26, 2016 - October 23, 2016	—	$	—	—	$	443,504,390
October 24, 2016 - November 20, 2016	16,200	27.95		16,200	443,051,523
November 21, 2016 - December 18, 2016	—	—		—	443,051,523
December 19, 2016 - January 15, 2017	—	—			443,051,523
Total	16,200	$	27.95	16,200

⁽¹⁾ Periodic information is presented by reference to our fiscal periods during the second quarter of fiscal year 2017.

⁽²⁾ On November 4, 2015, the Board authorized a share repurchase program whereby the Company may make up to $1.0 billion in stock purchases of outstanding shares of common stock of the Company. The repurchase program does not have an expiration date. Under the share repurchase programs, purchases can be made from time to time using a variety of methods, which may include open market purchases. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. Purchases may be made through a Rule 10b5-1 plan pursuant to pre-determined metrics set forth in such plan. The Board’s authorization of the share repurchase program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at any time at the Company’s discretion.

31

Item 5. Other Information.

As previously disclosed in our report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on May 10, 2017, the Company announced the appointment of five new independent directors and named Gabrielle Sulzberger the new Chair of the Board and Mary Ellen Coe the new Chair of the Nominating and Governance Committee. The Company also announced the appointment of Keith Manbeck as its new Chief Financial Officer.

Item 6. Exhibits.

3.1	Amended and Restated Articles of Incorporation of the Registrant, dated September 15, 2015 (1)
3.2	Amended and Restated Bylaws of the Registrant effective March 13, 2017 (2)
4.1	Amended and Restated Indenture, dated as of September 8, 2016, between the Registrant and U.S. Bank National Association, as Trustee (3)
4.2	First Supplemental Indenture, dated December 3, 2015, among the Registrant, the Guarantors, and U.S. Bank National Association (4)
4.3	Form of 5.2000% Senior Notes due 2025 (included in Exhibit 4.2) (4)
10.1	Form of Time-based Restricted Share Unit Award Agreement under the 2009 Stock Incentive Plan (5)
31.1	Certification of Chief Executive Officer Pursuant to 17 CFR 240.13a -14(a) (5)
31.2	Certification of Chief Financial Officer Pursuant to 17 CFR 240.13a - 14(a) (5)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 (6)
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 (6)
101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 9, 2017 formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements (5)

(1)	Filed as an exhibit to Registrant’s Form 10-K for the period ended September 27, 2015 filed November 13, 2016 and incorporated herein by reference.
(2)	Filed as an exhibit to Registrant’s Form 8-K filed March 31, 2017 and incorporated herein by reference.
(3)	Filed as an exhibit to Registrant’s Form 8-K filed September 9, 2016 and incorporated herein by reference.
(4)	Filed as an exhibit to Registrant’s Form 8-K filed December 4, 2015 and incorporated herein by reference.
(5)	Filed herewith.
(6)	Furnished herewith.

32

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		WHOLE FOODS MARKET, INC.
Date:	May 19, 2017	By:	/s/ Keith Manbeck
			Keith Manbeck
			Executive Vice President and Chief Financial Officer
			(Duly authorized officer and principal financial officer)

33

EX-10.1

Exhibit 10.1

WHOLE FOODS MARKET

2009 STOCK INCENTIVE PLAN

TIME-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

RECITALS

A.    Whole Foods Market, Inc. (the “Company”) has adopted the Whole Foods Market 2009 Stock Incentive Plan (the “Plan”) for the purpose of attracting and retaining the services of selected Team Members, Directors, and Consultants who contribute to the Company’s success by their ability, ingenuity, and industry and enabling such individuals to participate in the long-term success and growth of the Company by giving them a proprietary interest in the Company through the grant of certain equity-based Awards.

B.    Pursuant to Section 3.2 of the Plan, the Compensation Committee of the Board of Directors or, in the event that the Compensation Committee of the Board is not then authorized to act in accordance with the terms of the Plan, the Board (each as the case may be acting in its capacity as Plan Administrator of the Plan and hereinafter referred to as the “Committee”), is authorized, in its sole and absolute discretion, to determine those Team Members, Directors and Consultants to whom Awards will be granted under the Plan.

C.    Grantee is expected to render substantial future services to the Company or a Subsidiary Corporation, and this Restricted Share Unit Award Agreement (this “Agreement”) is executed pursuant to, and is intended to carry out the purposes of, the Plan.

D.    All capitalized terms in this Agreement shall have the meaning assigned to them in the Plan.

NOW, THEREFORE, it is hereby agreed as follows:

1.Award of Restricted Share Units. The Company hereby grants to Grantee an Award of Restricted Share Units (“RSUs”). An RSU is an Award representing an unfunded, unsecured right to receive a share of Common Stock of the Company, which right is subject to restrictions, as set forth in this Agreement, until vested.

Grantee:     

Award Date:     

Number of RSUs under Award:

Restrictions on RSUs. Except as otherwise provided in the Plan and this Agreement, the restrictions on Grantee’s unvested RSUs are that the RSUs shall be subject to forfeiture by Grantee if Grantee fails to satisfy the vesting conditions set forth below.

2.Vesting of RSUs. The RSUs awarded hereunder shall vest, and the restrictions on such RSUs shall lapse, only if Grantee remains in continuous service with the Company or a Subsidiary Corporation until the applicable anniversary of the Award Date, as set forth below (each, a “Vesting Date”).

(i)

(ii)

(iii)

(iv)

Notwithstanding the foregoing, all unvested RSUs shall vest, and the restrictions on such RSUs shall immediately lapse upon the death or Disability of Grantee. Furthermore, notwithstanding the foregoing, in the event that Grantee’s employment or service with the Company and all Subsidiary Corporations is terminated prior to a Vesting Date for any reason other than death, Disability, or Cause, and the Company and Grantee have entered or do enter into a separation agreement, the terms of which provide for

immediate or accelerated vesting of the RSUs or negotiation for the immediate or accelerated vesting thereof, then notwithstanding such termination of employment or service and notwithstanding the terms of any such separation agreement, no unvested RSU shall become payable prior to the applicable Settlement Date, as such term is defined in Section 3 hereof, and furthermore, settlement of any such unvested RSU shall be contingent on Grantee’s compliance with the terms of such separation agreement (including any restrictive covenants therein). In the event that a period set forth in any such separation agreement during which Grantee is subject to fulfillment of the conditions set forth therein (including any restrictive covenants) shall lapse prior to a Settlement Date, no settlement of such RSU shall occur prior to the applicable Settlement Date. If Grantee does not comply with the terms of such separation agreement (including any restrictive covenants therein) during any period prior to a Vesting Date, any remaining RSUs shall be immediately forfeited on the first date on which the Committee makes a determination of such noncompliance.

3.Settlement of RSUs. Each vested RSU shall be settled during the earliest of the following periods: (a) if applicable, the 90-day period following Grantee’s date of death; (b) if applicable, the 90-day period following the date as of which Grantee is determined to be Disabled; or (c) the period beginning on the applicable Vesting Date and ending on the later of: (i) the last day of the calendar year in which such Vesting Date occurs or (ii) the 15^th day of the third calendar month following the applicable Vesting Date (each, a “Settlement Date”). The Company will settle vested RSUs by issuing to Grantee, on a one-for-one basis, shares of Common Stock of the Company. In no event shall Grantee be permitted to designate the taxable year in which settlement of an RSU shall occur.

4.Dividend Equivalent Rights. Grantee is hereby granted a dividend equivalent right to accompany each RSU. Upon payment of a dividend to a holder of shares of Common Stock of the Company, Grantee will be credited with a book entry in an amount equal to the amount of such per share dividend payment, multiplied by the number of RSUs granted pursuant to this Agreement that have not been settled prior to the record date on which such dividends are declared. Upon each Vesting Date, Grantee shall vest in the number of dividend equivalent rights credited hereunder that are attributable to the RSUs that vest on such Vesting Date and shall thereafter receive a cash payment equal to the amount of such dividend equivalent rights, such cash payment to be made on the Settlement Date on which such RSUs are settled, as provided in Section 3 hereof.

5.Compliance with Laws and Regulations. Notwithstanding any other provision of the Plan or the Agreement to the contrary, the grant, vesting and holding of the Shares by Grantee is expressly conditioned upon compliance with the Securities Act and all applicable state securities laws. Grantee agrees to cooperate with the Company to ensure compliance with such laws.

6.Representations and Warranties of Grantee. Grantee represents and warrants to the Company that Grantee has received a copy of the Plan and has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions. Grantee acknowledges that there are tax consequences that occur upon the settlement of RSUs, and that Grantee should consult a tax advisor prior to such time.

7.Restrictions on Transfer. Grantee may not sell, assign, pledge as security or otherwise transfer or encumber the unvested RSUs, whether voluntary or involuntary, and if involuntary, whether by process of law in any civil or criminal suit, action or proceeding, whether in the nature of an insolvency or bankruptcy proceeding or otherwise.

8.No Right to Continue Service. Nothing in the Plan or this Agreement shall confer on Grantee any right to continue in the service of, or relationship with, the Company or a Subsidiary Corporation, or limit in any way the right of the Company or a Subsidiary Corporation to terminate Grantee’s service at any time, with or without cause.

9.Tax Consequences.

(a)    Adverse Tax Consequences. The Company shall issue to Grantee IRS Form W-2 or 1099, as applicable, or the equivalent thereof, reflecting the amount to be reported by Grantee as compensation income for the calendar year(s) in which the Settlement Date(s) occur. Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection with his or her receipt of the Award, regardless of any action the Company takes with respect to any tax withholding obligations arising hereunder. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the grant of the Award or payments made pursuant to this Agreement. The Company does not commit and is under no obligation to structure the Award to reduce or eliminate the Participant's tax liability.

(b)    Payment of Withholding Taxes. The settlement of RSUs, and payment of any dividend equivalent rights to which Grantee is entitled, on each Settlement Date shall be automatically subject to withholding. The Participant hereby acknowledges his or her understanding that the Company's obligations under this Agreement are fully contingent on Grantee first satisfying this Section 9. Therefore, a failure of Grantee to reasonably satisfy this Section 9, as determined by the Company in its sole and absolute discretion, shall result in the termination and expiration of this Agreement and the Company's obligations hereunder.

(c)    Compliance with the Code. The Award and this Agreement are intended to comply with Section 409A of the Code. Notwithstanding any other provision in the Plan or this Agreement to the contrary, in the event the terms of this Agreement would subject Grantee to taxes or penalties under Section 409A, the Company and Grantee shall cooperate diligently to amend the terms of this Agreement to avoid such Section 409A penalties to the extent possible, and/or to adopt such amendments to this Agreement or take such other actions (including amendments and actions with retroactive effect) as the Committee determines are necessary or appropriate for the Award to comply with Section 409A.

10.Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by Grantee or the Company to the Plan Administrator for review. The resolution of such a dispute by the Plan Administrator shall be final and binding on the Company and Grantee.

11.Entire Agreement. This Agreement is subject to the terms of the Plan, which is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof. If any inconsistency should exist between the nondiscretionary terms and conditions of this Agreement and the Plan, the Plan shall govern and control.

12.Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to Grantee shall be in writing and addressed to Grantee at the address indicated below or to such other address as such party may designate in writing from time to time to the Company. All notices shall be deemed to have been given or delivered upon: (a) personal delivery; (b) five (5) days after deposit in the United States mail by certified or registered mail (return receipt requested); (c) one (1) business day after deposit with any return receipt express courier (prepaid); or (d) one (1) business day after transmission by facsimile or telecopier.

13.Successors and Assigns. The Company may assign any of its rights or obligations under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon Grantee’s transferees.

14.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to its conflict of law principles. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate by its duly authorized representative and Grantee has executed this Agreement in duplicate, effective as of the Award Date.

WHOLE FOODS MARKET, INC.

By:

GRANTEE

Address: c/o 550 Bowie Street, Austin, TX 78703

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John Mackey, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Whole Foods Market, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 19, 2017

/s/ John Mackey

John Mackey

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Keith Manbeck, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Whole Foods Market, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 19, 2017

/s/ Keith Manbeck

Keith Manbeck

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Whole Foods Market, Inc. (the “Company”) for the period ending April 9, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Mackey, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: May 19, 2017

/s/ John Mackey

John Mackey

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Whole Foods Market, Inc. (the “Company”) for the period ending April 9, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Keith Manbeck, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: May 19, 2017

/s/ Keith Manbeck

Keith Manbeck

Chief Financial Officer

XML

Document and Entity - shares	6 Months Ended
	Apr. 09, 2017	May 12, 2017
Document and Entity [Abstract]
Entity Registrant Name	WHOLE FOODS MARKET INC
Entity Central Index Key	0000865436
Document Type	10-Q
Entity Filer Category	Large Accelerated Filer
Current Fiscal Year End Date	--09-24
Document Period End Date	Apr. 09, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		319,564,636

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016
Current assets:
Cash and cash equivalents	$ 412	$ 351
Short-term investments - available-for-sale securities	476	379
Restricted cash	124	122
Accounts receivable	255	242
Merchandise inventories	508	517
Prepaid expenses and other current assets	119	167
Deferred income taxes	214	197
Total current assets	2,108	1,975
Property and equipment, net of accumulated depreciation and amortization	3,469	3,442
Goodwill	710	710
Intangible assets, net of accumulated amortization	71	74
Deferred income taxes	114	100
Other assets	41	40
Total assets	6,513	6,341
Current liabilities:
Current installments of long-term debt and capital lease obligations	2	3
Accounts payable	313	307
Accrued payroll, bonus and other benefits due team members	393	407
Dividends payable	45	43
Other current liabilities	584	581
Total current liabilities	1,337	1,341
Long-term debt and capital lease obligations, less current installments	1,047	1,048
Deferred lease liabilities	665	640
Other long-term liabilities	105	88
Total liabilities	3,154	3,117
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value, 1,200 shares authorized; 377.0 shares issued; 318.8 and 318.3 shares outstanding at 2017 and 2016, respectively	2,945	2,933
Common stock in treasury, at cost, 58.2 and 58.7 shares at 2017 and 2016, respectively	(2,004)	(2,026)
Accumulated other comprehensive loss	(35)	(32)
Retained earnings	2,453	2,349
Total shareholders’ equity	3,359	3,224
Total liabilities and shareholders’ equity	$ 6,513	$ 6,341

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 09, 2017	Sep. 25, 2016
Statement of Financial Position [Abstract]
Common Stock, Shares Authorized	1,200,000,000	1,200,000,000
Common Stock, Shares, Issued	377,000,000	377,000,000
Common Stock, Shares, Outstanding	318,800,000	318,300,000
Common Stock, No Par Value
Treasury Stock, Shares	58,200,000	58,700,000

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended				4 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Sep. 25, 2016	Jul. 03, 2016	Apr. 10, 2016	Jan. 15, 2017	Jan. 17, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Income Statement [Abstract]
Sales	$ 3,737			$ 3,696			$ 8,656	$ 8,524
Cost of goods sold and occupancy costs	2,463			2,406			5,732	5,593
Gross profit	1,274			1,290			2,924	2,931
Selling, general and administrative expenses	1,057			1,028			2,474	2,402
Pre-opening expenses	12			18			33	31
Relocation, store closure and lease termination costs	34			3			74	5
Operating income	171			241			343	493
Interest expense	(11)			(11)			(26)	(18)
Investment and other income	2			5			1	9
Income before income taxes	162			235			318	484
Provision for income taxes	63			93			124	185
Net income	$ 99			$ 142			$ 194	$ 299	$ 507
Basic earnings per share (in dollars per share)	$ 0.31			$ 0.44			$ 0.61	$ 0.90
Weighted average shares outstanding (in shares)	318.5			324.7			318.3	331.7
Diluted earnings per share (in dollars per share)	$ 0.31			$ 0.44			$ 0.61	$ 0.90
Weighted average shares outstanding, diluted basis (in shares)	318.9			325.4			318.7	332.7
Dividends declared per common share (in dollars per share)	$ 0.14	$ 0.135	$ 0.135	$ 0.135	$ 0.14	$ 0.135	$ 0.28	$ 0.27	$ 0.54

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 99	$ 142	$ 194	$ 299	$ 507
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(2)	10	(3)
Other comprehensive loss, net of tax	(2)	10	(3)		$ (4)
Comprehensive income	$ 97	$ 152	$ 191	$ 299

XML

Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common stock	Common stock in treasury	Accumulated other comprehensive loss	Retained earnings
Balances at Sep. 27, 2015	$ 3,769	$ 2,904	$ (1,124)	$ (28)	$ 2,017
Balances (in shares) at Sep. 27, 2015		348.9
Increase (Decrease) in Shareholders' Equity
Net income	507				507
Other comprehensive income (loss), net of tax	(4)			(4)
Dividends ($0.28 and $0.54 per common share for the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 27, 2016, respectively)	(174)				(174)
Issuance of common stock pursuant to team member stock plans	19	$ (23)	42
Issuance of common stock pursuant to team member stock plans (in shares)		1.1
Purchase of treasury stock	(944)		(944)
Purchase of treasury stock (in shares)		(31.7)
Tax benefit related to exercise of team member stock options	3	$ 3
Share-based payment expense	49	49
Other	(1)				(1)
Balances at Sep. 25, 2016	$ 3,224	$ 2,933	(2,026)	(32)	2,349
Balances (in shares) at Sep. 25, 2016	318.3	318.3
Increase (Decrease) in Shareholders' Equity
Net income	$ 194				194
Other comprehensive income (loss), net of tax	(3)			(3)
Dividends ($0.28 and $0.54 per common share for the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 27, 2016, respectively)	(89)				(89)
Issuance of common stock pursuant to team member stock plans	12	$ (10)	22
Issuance of common stock pursuant to team member stock plans (in shares)		0.5
Tax benefit related to exercise of team member stock options		$ (1)
Adjustments to Additional Paid in Capital, Income Tax Deficiency from Share-based Compensation	(1)
Share-based payment expense	23	23
Other	(1)				(1)
Balances at Apr. 09, 2017	$ 3,359	$ 2,945	$ (2,004)	$ (35)	$ 2,453
Balances (in shares) at Apr. 09, 2017	318.8	318.8

XML

Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended				4 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Sep. 25, 2016	Jul. 03, 2016	Apr. 10, 2016	Jan. 15, 2017	Jan. 17, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Statement of Stockholders' Equity [Abstract]
Dividends declared per common share (in dollars per share)	$ 0.14	$ 0.135	$ 0.135	$ 0.135	$ 0.14	$ 0.135	$ 0.28	$ 0.27	$ 0.54

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016
Cash flows from operating activities
Net income	$ 194	$ 299
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	305	259
Share-based payment expense	23	28
LIFO expense	3	4
Deferred income tax expense	(31)	5
Excess tax benefit related to exercise of team member stock options		(1)
Accretion of premium/discount on marketable securities	1	1
Deferred lease liabilities	34	18
Other	6	1
Net change in current assets and liabilities:
Accounts receivable	(11)	(12)
Merchandise inventories	6	(25)
Prepaid expenses and other current assets	54	(54)
Accounts payable	6	4
Accrued payroll, bonus and other benefits due team members	(13)	(39)
Other current liabilities	30	76
Net change in other long-term liabilities	17	11
Net cash provided by operating activities	624	575
Cash flows from investing activities
Development costs of new locations	(227)	(197)
Other property and equipment expenditures	(149)	(141)
Purchases of available-for-sale securities	(356)	(176)
Sales and maturities of available-for-sale securities	258	350
Payment for purchase of acquired entities, net of cash acquired		(11)
Other investing activities	(6)	(10)
Net cash used in investing activities	(480)	(185)
Cash flows from financing activities
Purchases of treasury stock		(734)
Common stock dividends paid	(88)	(90)
Issuance of common stock	10	11
Excess tax benefit related to exercise of team member stock options		1
Proceeds from long-term borrowings		999
Proceeds from revolving line of credit		300
Payments on long-term debt and capital lease obligations	(2)	(305)
Other financing activities	(1)	(8)
Net cash provided by (used in) financing activities	(81)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		2
Net change in cash, cash equivalents, and restricted cash	63	566
Cash, cash equivalents, and restricted cash at beginning of period	473	364
Cash, cash equivalents, and restricted cash at end of period	536	930
Supplemental disclosure of cash flow information:
Federal and state income taxes paid	142	$ 229
Interest paid	$ 26

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Basis of Presentation

6 Months Ended

Apr. 09, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Basis of Presentation

The accompanying unaudited consolidated financial statements of Whole Foods Market, Inc. and its consolidated subsidiaries (collectively “Whole Foods Market,” “Company,” or “we”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis and the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation. Where appropriate, we have reclassified prior year financial statements to conform to current year presentation. Interim results are not necessarily indicative of results for any other interim period or for a full fiscal year. The Company reports its results of operations on a 52- or 53-week fiscal year ending on the last Sunday in September. The first fiscal quarter is 16 weeks, the second and third quarters each are 12 weeks, and the fourth quarter is 12 or 13 weeks. Fiscal years 2017 and 2016 are 52-week years. The Company has one operating segment and a single reportable segment, natural and organic foods supermarkets.

The following is a summary of percentage sales by geographic area for the periods indicated:

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Sales:
United States	97.1	%	97.1	%	97.1	%	97.1	%
Canada and United Kingdom	2.9		2.9		2.9		2.9
Total sales	100.0	%	100.0	%	100.0	%	100.0	%

The following is a summary of the percentage of net long-lived assets by geographic area as of the dates indicated:

	April 9, 2017		September 25, 2016
Long-lived assets, net:
United States	97.5	%	97.5	%
Canada and United Kingdom	2.5		2.5
Total long-lived assets, net	100.0	%	100.0	%

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Summary of Significant Accounting Policies

6 Months Ended

Apr. 09, 2017

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Recent Accounting Pronouncements

Effective September 26, 2016, the Company early adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-18, “Statement of Cash Flows: Restricted Cash ,” which amends the Accounting Standards Codification Topic 230. The amendments, which require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash, were adopted on a retrospective basis. The adoption of these amendments did not have a significant effect on the Company’s financial statements.

The following table provides a brief description of recently issued accounting pronouncements that have not yet been adopted. Early adoption is permitted for all updates unless stated.

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2017-04 Simplifying the Test for Goodwill Impairment (Topic 350)	The amendments eliminate Step 2 from the goodwill impairment test. Instead, an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value should be recognized; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss should also be considered, if applicable. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 27, 2020	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-13 Measurement of Credit Losses on Financial Instruments(Topic 326)	The amendments guide on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendments require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments also require that credit losses on available-for-sale debt securities be presented as an allowance. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic.	First quarter of fiscal year ending September 29, 2021	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-09 Improvements to Employee Share-Based Payment Accounting (Topic 718)	The amendments aim to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, and certain classifications on the statement of cash flows. The amendments should be applied on either a prospective, retrospective, or modified-retrospective basis depending on the subtopic.	First quarter of fiscal year ending September 30, 2018	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (Topic 606)	The amendments, which do not change the core principle of the guidance in Topic 606, clarify the implementation guidance on principal versus agent considerations, including how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-07 Simplifying the Transition to the Equity Method of Accounting (Topic 323)	The amendments eliminate the requirement to retroactively apply the equity method of accounting when an investment qualifies for the use of the equity method due to an increase in the level of ownership interest or degree of influence. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2016-04 Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) (Subtopic 405-20)	The amendments require entities to recognize liabilities related to the sale of prepaid stored-value products redeemable for goods, services or cash as financial liabilities in the scope of ASC 405. Additionally, the new guidance amends ASC 405-20 to include a narrow scope exception requiring entities to recognize breakage for these liabilities in a way that is consistent with how gift card breakage will be recognized under the new revenue recognition standard. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-02 Leases (Topic 842)	The amendments require lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is largely unchanged. The amendments should be applied on a modified retrospective basis.	First quarter of fiscal year ending September 27, 2020	The adoption of this ASU will result in a significant increase to the Company’s Consolidated Balance Sheets for lease liabilities and right-of-use assets, and the Company is currently evaluating the other effects of adoption of this ASU on its Consolidated Financial Statements.
ASU No. 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)	The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet in year of adoption. Early adoption is permitted for only certain amendments of the update.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2015-17 Balance Sheet Classification of Deferred Taxes (Topic 740)	The amendments simplify the presentation of deferred income taxes by requiring that all deferred tax liabilities and assets be classified as noncurrent in the statement of financial position. The amendments may be applied on either a prospective or retrospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330)	The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost and net realizable value. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606)	The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the timing, method, and impact that the adoption of these provisions will have on the Company’s consolidated financial statements.

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Fair Value Measurements

6 Months Ended

Apr. 09, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

The Company holds money market fund investments that are classified as cash equivalents that are measured at fair value on a recurring basis based on quoted prices in active markets for identical assets. The Company also holds available-for-sale securities that are valued using a series of multi-dimensional relational models and series of matrices with standard inputs obtained from readily available pricing sources and other observable market data, such as benchmark yields and base spread. Equity interests measured at fair value are based on quoted prices for similar assets in active markets.

The carrying amounts of accrued payroll, bonuses and other benefits due team members, and other accrued expenses approximate fair value because of their short maturities. Store closure reserves and estimated workers’ compensation claims are recorded at net present value to approximate fair value.

Assets Measured at Fair Value on a Recurring Basis

The Company held the following financial assets measured at fair value on a recurring basis based on the hierarchy levels indicated (in millions):

April 9, 2017	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	2	$	—	$	—	$	2
Marketable securities - available-for-sale:
Municipal bonds	—		25		—		25
Variable-rate demand notes	—		451		—		451
Total	$	2	$	476	$	—	$	478

September 25, 2016	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	62	$	—	$	—	$	62
Commercial paper	—		30		—		30
Municipal bonds	—		46		—		46
Marketable securities - available-for-sale:
Commercial paper	—		30		—		30
Municipal bonds	—		26		—		26
Variable rate demand notes	—		323		—		323
Total	$	62	$	455	$	—	$	517

The estimated fair value of the Company’s long-term debt is included in Note 8 “Long-Term Debt.”

Assets Measured at Fair Value on a Nonrecurring Basis

During the twenty-eight weeks ended April 9, 2017, the Company recorded fair value adjustments, based on hierarchy level 3 inputs, totaling approximately $34 million related to certain locations for which asset value exceeded expected future cash flows, which were primarily included in the “Relocation, store closure and lease termination cost” line item on the Consolidated Statement of Operations. These impairment charges reduced the carrying value of related long-term assets to an immaterial fair value.

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Investments

6 Months Ended

Apr. 09, 2017

Investments [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Investments

The Company holds investments primarily in marketable securities that are classified as short-term available-for-sale securities. The Company held the following investments at fair value as of the dates indicated (in millions):

	April 9, 2017		September 25, 2016
Short-term marketable securities - available-for-sale:
Commercial paper	$	—	$	30
Municipal bonds	25		26
Variable rate demand notes	451		323
Total short-term marketable securities	$	476	$	379

Gross unrealized holding gains and losses were not material at April 9, 2017 or September 25, 2016. There were no available-for-sale securities in an unrealized loss position at April 9, 2017. Available-for-sale securities totaling approximately $33 million were in unrealized loss positions at September 25, 2016. The aggregate value of available-for-sale securities in a continuous unrealized loss position for greater than 12 months was not material at September 25, 2016. The Company did not recognize any other-than-temporary impairments during the twenty-eight weeks ended April 9, 2017 or fiscal year ended September 25, 2016. The average effective maturity of the Company’s short-term available-for-sale securities was less than one month at April 9, 2017 and September 25, 2016.

At April 9, 2017 and September 25, 2016, the Company held approximately $24 million and $19 million in equity interests which were accounted for using the cost method of accounting. Equity interests accounted for using the equity method were not material at April 9, 2017 or September 25, 2016.

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Goodwill and Other Intangible Assets

6 Months Ended

Apr. 09, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

There were no additions or adjustments to goodwill during the twenty-eight weeks ended April 9, 2017 or April 10, 2016. Additions of other intangible assets were not material during the twenty-eight weeks ended April 9, 2017 or the same period of the prior fiscal year. The components of intangible assets as of the dates indicated were as follows (in millions):

	April 9, 2017					September 25, 2016
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Definite-lived contract-based	$	118	$	(56	)	$	120	$	(55	)
Indefinite-lived contract-based	9					9
Total	$	127	$	(56	)	$	129	$	(55	)

Amortization expense associated with intangible assets was not material during the twelve weeks ended April 9, 2017 or the same period of the prior fiscal year. Future amortization expense associated with the net carrying amount of definite-lived intangible assets is estimated to be as follows (in millions):

Remainder of fiscal year 2017	$	3
Fiscal year 2018	5
Fiscal year 2019	5
Fiscal year 2020	5
Fiscal year 2021	4
Future fiscal years	40
Total	$	62

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Store and Facility Closures

6 Months Ended

Apr. 09, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Store and Facility Closures

During the first quarter of fiscal year 2017, the Company announced plans to close nine stores and three commissary kitchens and recorded non-cash charges of approximately $34 million to adjust the long-lived assets of these locations to fair value. During the second quarter of fiscal year 2017, the Company closed all nine stores and all three commissary kitchens and recorded additional charges of $30 million primarily related to remaining lease obligations and Team Member severance. The Company expects to incur no material additional charges related to these closures.

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Reserves for Closed Properties

6 Months Ended

Apr. 09, 2017

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

Reserves for Closed Properties

The following table provides a summary of activity in reserves for closed properties during the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 25, 2016 (in millions):

	April 9, 2017			September 25, 2016
Beginning balance	$	26		$	28
Additions	27			6
Usage	(5		)	(10		)
Adjustments	1			2
Ending balance	$	49		$	26

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Long-Term Debt

6 Months Ended

Apr. 09, 2017

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Long-Term Debt

Credit Agreement

The Company’s revolving credit facility under a credit agreement dated as of November 2, 2015 (the “Credit Agreement”) provides for an unsecured revolving credit facility in the aggregate principal amount of $500 million, which may be increased from time to time by up to $250 million. The Credit Agreement also provides for a letter of credit subfacility of up to $250 million.

At April 9, 2017, the Company had no amounts outstanding under the credit facility. Commitment fees paid on undrawn amounts were not material during the twenty-eight weeks ended April 9, 2017. At April 9, 2017, the Company was in compliance with its covenants under the Credit Agreement.

During the twenty-eight weeks ended April 10, 2016, the Company borrowed and repaid $300 million under the Credit Agreement. At April 10, 2016, the Company had no amounts outstanding.

Senior Notes

The Company has outstanding $1.0 billion of senior notes (the “Notes”). The Notes bear interest at a fixed rate equal to 5.2% per year, payable semiannually, and mature on December 3, 2025. The effective interest rate of the Notes, which includes interest on the Notes and amortization of discount and issuance costs, is approximately 5.28%. At April 9, 2017, the Company was in compliance with all covenants under the indenture governing the Notes. The estimated fair value of the Notes at April 9, 2017, based on observable market prices (Level 2), exceeded the carrying value by approximately $72 million.

The Notes and Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by certain wholly owned domestic subsidiaries of the Company (the “Guarantors”). For additional information regarding the Guarantors see Note 14, Guarantor Financial Statement Information. The components of long-term debt as of the dates indicated were as follows (in millions):

	April 9, 2017			September 25, 2016
5.2% senior notes due 2025	$	1,000		$	1,000
Less: unamortized discount and debt issuance costs related to senior notes	(7		)	(7		)
Carrying value of senior notes	993			993
Capital lease obligations	56			58
Total long-term debt and capital lease obligations	1,049			1,051
Less: current installments	(2		)	(3		)
Total long-term debt and capital lease obligations, less current installments	$	1,047		$	1,048

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Income Taxes

6 Months Ended

Apr. 09, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

Income taxes resulted in an effective tax rate of approximately 39.0% for the twelve and twenty-eight weeks ended April 9, 2017 compared to approximately 39.5% and 38.2%, respectively, for the same periods of the prior fiscal year. The lower effective tax rate for the twenty-eight weeks ended April 10, 2016 was due to the recognition of an environmental tax credit related to the development of a new store.

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Shareholders' Equity

6 Months Ended

Apr. 09, 2017

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Shareholders’ Equity

Dividends per Common Share

The following table provides a summary of dividends declared per common share during fiscal year 2017 to date and fiscal year 2016 (in millions, except per share amounts):

Date of declaration	Dividend per common share		Date of record	Date of payment	Total amount
Fiscal year 2017:
November 2, 2016	$	0.14	January 13, 2017	January 24, 2017	$	45
February 17, 2017 (1)	0.14		April 7, 2017	April 18, 2017	45
Fiscal year 2016:
November 4, 2015	$	0.135	January 15, 2016	January 26, 2016	$	44
March 9, 2016	0.135		April 8, 2016	April 19, 2016	44
June 7, 2016	0.135		July 1, 2016	July 12, 2016	43
September 22, 2016	0.135		October 3, 2016	October 14, 2016	43

⁽¹⁾ Dividend accrued at April 9, 2017

On May 10, 2017, the Company’s Board of Directors (“Board”) announced a 29% increase in the regular quarterly dividend to $0.18 per share, and the next quarterly dividend to be declared is expected to be payable on July 11, 2017 to shareholders of record as of June 30, 2017.

Treasury Stock

As of April 9, 2017, one share repurchase program remained in effect, with prior programs having been fully utilized, expired or cancelled. The following table outlines the share repurchase program authorized by the Board, and the related repurchase activity as of April 9, 2017 (in millions):

Effective date	Expiration date	Amount authorized		Cost of repurchases		Authorization available
November 4, 2015	Not applicable	$	1,000	$	557	$	443

Share repurchase activity for the twelve and twenty-eight weeks ended April 9, 2017 was immaterial. Share repurchase activity for the twelve and twenty-eight weeks ended April 10, 2016 was as follows (in millions, except per share amounts):

	Twelve weeks ended		Twenty-eight weeks ended
	April 10, 2016		April 10, 2016
Number of common shares acquired	3.5		24.6
Average price per common share acquired	$	28.88	$	29.81
Total cost of common shares acquired	$	100	$	734

On May 10, 2017, the Board authorized a new $1.25 billion share repurchase program, with the intent to opportunistically utilize the authorization over the next 18 months. The new authorization will replace the Company’s existing program.

The Company reissued approximately 0.6 million treasury shares at cost of approximately $21 million and approximately 0.5 million treasury shares at cost of approximately $22 million to satisfy the issuance of common stock pursuant to team member stock plans during the twenty-eight weeks ended April 9, 2017 and April 10, 2016, respectively. At April 9, 2017 and September 25, 2016, the Company held in treasury approximately 58.2 million shares and 58.7 million shares, respectively, totaling approximately $2.0 billion.

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Earnings per Share

6 Months Ended

Apr. 09, 2017

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings per Share

The computation of basic earnings per share is based on the number of weighted average common shares outstanding during the period. The computation of diluted earnings per share includes the dilutive effect of common stock equivalents consisting of incremental common shares deemed outstanding from the assumed exercise of stock options and the dilutive effect of restricted stock awards. A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows (in millions, except per share amounts):

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Net income (numerator for basic and diluted earnings per share)	$	99	$	142	$	194	$	299
Weighted average common shares outstanding (denominator for basic earnings per share)	318.5		324.7		318.3		331.7
Incremental common shares attributable to dilutive effect of share-based awards	0.4		0.7		0.4		1.0
Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share)	318.9		325.4		318.7		332.7
Basic earnings per share	$	0.31	$	0.44	$	0.61	$	0.90
Diluted earnings per share	$	0.31	$	0.44	$	0.61	$	0.90

The computation of diluted earnings per share for the twelve and twenty-eight weeks ended April 9, 2017 and does not include share-based awards to purchase approximately 24.0 million shares and 24.3 million shares of common stock, respectively, due to their antidilutive effect. The computation of diluted earnings per share for the twelve and twenty-eight weeks ended April 10, 2016 does not include share-based awards to purchase approximately 20.9 million shares and 19.7 million shares of common stock, respectively, due to their antidilutive effect.

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Share-Based Payments

6 Months Ended

Apr. 09, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Share-Based Payments

Share-based payment expense, primarily included in the “Selling, general and administrative expenses” line item on the Consolidated Statements of Operations, totaled approximately $9 million and $23 million, respectively, during the twelve and twenty-eight weeks ended April 9, 2017, and totaled approximately $12 million and $28 million, respectively, for the same periods of the prior fiscal year.

At April 9, 2017 and September 25, 2016, approximately 31.2 million shares and 29.8 millionshares of the Company’s common stock, respectively, were available for future stock incentive grants. At April 9, 2017 and September 25, 2016, there was approximately $51 million and $73 million of unrecognized share-based payment expense, respectively, related to unvested stock options, net of estimated forfeitures, related to approximately 9.7 million shares and 10.5 million shares, respectively. The Company anticipates this expense to be recognized over a weighted average period of 2.5 years.

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Commitments and Contingencies

6 Months Ended

Apr. 09, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

The Company is exposed to claims and litigation matters arising in the ordinary course of business and uses various methods to resolve these matters in a manner that we believe best serves the interests of our stakeholders. From time to time we are a party to legal proceedings including matters involving shareholder claims, personnel and employment issues, personal injury, product liability, protecting our intellectual property, regulatory practices, acquisitions and other proceedings arising in the ordinary course of business. These matters have not resulted in any material losses to date. Certain litigation cases have been certified as class or collective actions and may seek substantial damages.

Our primary contingencies are associated with insurance and self-insurance obligations and litigation matters. Additionally, the Company has retention agreements with certain members of Company management which provide for payments under certain circumstances including change of control. Estimation of our insurance and self-insurance liabilities requires significant judgments, and actual claim settlements and associated expenses may differ from our current provisions for loss. We have exposures to loss contingencies arising from pending or threatened litigation for which assessing and estimating the outcomes of these matters involve substantial uncertainties.

The Company evaluates contingencies on an ongoing basis and has established loss provisions for matters in which losses are probable and the amount of loss can be reasonably estimated, and is not currently a party to any legal proceeding that management believes could have a material adverse effect on our results of operations. Insurance and legal settlement liabilities are included in the “Other current liabilities” line item on the Consolidated Balance Sheets. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities.

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Guarantor Financial Statements

6 Months Ended

Apr. 09, 2017

Guarantor Financial Statements [Abstract]

Guarantor Financial Statements [Text Block]

Guarantor Financial Statement Information

The Senior Notes issued on December 3, 2015 and Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by certain wholly owned domestic subsidiaries of the Company (the “Guarantors”). Supplemental condensed consolidating financial information of the Company, including such information for the Guarantors is presented below:

Consolidated Balance Sheets (unaudited)

(In millions)

	April 9, 2017
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	310	$	102	$	—		$	412
Short-term investments - available-for-sale securities	—		476		—		—			476
Restricted cash	—		118		6		—			124
Accounts receivable	—		233		22		—			255
Intercompany receivable	—		728		—		(728		)	—
Merchandise inventories	—		438		70		—			508
Prepaid expenses and other current assets	1		75		43		—			119
Deferred income taxes	—		214		—		—			214
Total current assets	1		2,592		243		(728		)	2,108
Property and equipment, net of accumulated depreciation and amortization	—		3,082		387		—			3,469
Investments in consolidated subsidiaries	4,802		107		476		(5,385		)	—
Goodwill	—		703		7		—			710
Intangible assets, net of accumulated amortization	1		61		9		—			71
Deferred income taxes	—		108		6		—			114
Other assets	—		13		28		—			41
Total assets	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	2	$	—	$	—		$	2
Accounts payable	—		224		89		—			313
Intercompany payable	389		—		339		(728		)	—
Accrued payroll, bonus and other benefits due team members	—		368		25		—			393
Dividends payable	45		—		—		—			45
Other current liabilities	18		530		36		—			584
Total current liabilities	452		1,124		489		(728		)	1,337
Long-term debt and capital lease obligations, less current installments	993		46		8		—			1,047
Deferred lease liabilities	—		615		50		—			665
Other long-term liabilities	—		104		1		—			105
Total liabilities	1,445		1,889		548		(728		)	3,154
Commitments and contingencies
Total shareholders’ equity	3,359		4,777		608		(5,385		)	3,359
Total liabilities and shareholders’ equity	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513

Consolidated Balance Sheets (unaudited)

(In millions)

	September 25, 2016
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	254	$	97	$	—		$	351
Short-term investments - available-for-sale securities	—		379		—		—			379
Restricted cash	—		114		8		—			122
Accounts receivable	—		216		26		—			242
Intercompany receivable	—		649		—		(649		)	—
Merchandise inventories	—		441		76		—			517
Prepaid expenses and other current assets	—		150		17		—			167
Deferred income taxes	—		197		—		—			197
Total current assets	—		2,400		224		(649		)	1,975
Property and equipment, net of accumulated depreciation and amortization	—		3,063		379		—			3,442
Investments in consolidated subsidiaries	4,593		103		472		(5,168		)	—
Goodwill	—		702		8		—			710
Intangible assets, net of accumulated amortization	1		63		10		—			74
Deferred income taxes	—		94		6		—			100
Other assets	—		16		24		—			40
Total assets	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	3	$	—	$	—		$	3
Accounts payable	—		227		80		—			307
Intercompany payable	317		—		333		(650		)	—
Accrued payroll, bonus and other benefits due team members	—		381		26		—			407
Dividends payable	43		—		—		—			43
Other current liabilities	17		536		28		—			581
Total current liabilities	377		1,147		467		(650		)	1,341
Long-term debt and capital lease obligations, less current installments	993		48		7		—			1,048
Deferred lease liabilities	—		592		48		—			640
Other long-term liabilities	—		87		1		—			88
Total liabilities	1,370		1,874		523		(650		)	3,117
Commitments and contingencies
Total shareholders’ equity	3,224		4,567		600		(5,167		)	3,224
Total liabilities and shareholders’ equity	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341

Consolidated Statements of Operations (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	3,547	$	220		$	(30	)	$	3,737
Cost of goods sold and occupancy costs	—			2,332		161			(30		)	2,463
Gross profit	—			1,215		59			—			1,274
Selling, general and administrative expenses	—			1,001		56			—			1,057
Pre-opening expenses	—			12		—			—			12
Relocation, store closure and lease termination costs	—			34		—			—			34
Operating income	—			168		3			—			171
Interest expense	(11		)	—		—			—			(11		)
Investment and other expense	—			—		(1		)	3			2
Equity in net income of subsidiaries	106			1		3			(110		)	—
Income before income taxes	95			169		5			(107		)	162
Provision for income taxes	(4		)	66		1			—			63
Net income	$	99		$	103	$	4		$	(107	)	$	99

	Twelve weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Sales	$	—		$	3,512	$	223	$	(39	)	$	3,696
Cost of goods sold and occupancy costs	—			2,290		155		(39		)	2,406
Gross profit	—			1,222		68		—			1,290
Selling, general and administrative expenses	—			971		57		—			1,028
Pre-opening expenses	—			17		1		—			18
Relocation, store closure and lease termination costs	—			3		—		—			3
Operating income	—			231		10		—			241
Interest expense	(11		)	—		—		—			(11		)
Investment and other expense	—			4		—		1			5
Equity in net income of subsidiaries	149			3		9		(161		)	—
Income before income taxes	138			238		19		(160		)	235
Provision for income taxes	(4		)	94		3		—			93
Net income	$	142		$	144	$	16	$	(160	)	$	142

Consolidated Statements of Operations (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,219	$	535		$	(98	)	$	8,656
Cost of goods sold and occupancy costs	—			5,442		386			(96		)	5,732
Gross profit	—			2,777		149			(2		)	2,924
Selling, general and administrative expenses	—			2,338		136			—			2,474
Pre-opening expenses	—			30		3			—			33
Relocation, store closure and lease termination costs	—			73		1			—			74
Operating income	—			336		9			(2		)	343
Interest expense	(26		)	—		—			—			(26		)
Investment and other expense	—			—		(2		)	3			1
Equity in net income of subsidiaries	210			3		4			(217		)	—
Income before income taxes	184			339		11			(216		)	318
Provision for income taxes	(10		)	131		3			—			124
Net income	$	194		$	208	$	8		$	(216	)	$	194

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,096	$	512		$	(84	)	$	8,524
Cost of goods sold and occupancy costs	—			5,318		356			(81		)	5,593
Gross profit	—			2,778		156			(3		)	2,931
Selling, general and administrative expenses	—			2,266		136			—			2,402
Pre-opening expenses	—			27		4			—			31
Relocation, store closure and lease termination costs	—			5		—			—			5
Operating income	—			480		16			(3		)	493
Interest expense	(18		)	—		—			—			(18		)
Investment and other income (expense)	—			9		(2		)	2			9
Equity in net income of subsidiaries	310			6		15			(331		)	—
Income before income taxes	292			495		29			(332		)	484
Provision for income taxes	(7		)	187		5			—			185
Net income	$	299		$	308	$	24		$	(332	)	$	299

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net income	$	99	$	103	$	4		$	(107	)	$	99
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		1		(3		)	—			(2		)
Other comprehensive income (loss), net of tax	—		1		(3		)	—			(2		)
Comprehensive income	$	99	$	104	$	1		$	(107	)	$	97

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	194	$	208		$	8	$	(216	)	$	194
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		(3		)	—		—			(3		)
Other comprehensive income (loss), net of tax	—		(3		)	—		—			(3		)
Comprehensive income	$	194	$	205		$	8	$	(216	)	$	191

	Twelve weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	142	$	144		$	16	$	(160	)	$	142
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		(4		)	14		—			10
Other comprehensive loss, net of tax	—		(4		)	14		—			10
Comprehensive income	$	142	$	140		$	30	$	(160	)	$	152

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	299	$	308	$	24	$	(332	)	$	299
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		—		—		—			—
Other comprehensive loss, net of tax	—		—		—		—			—
Comprehensive income	$	299	$	308	$	24	$	(332	)	$	299

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	(26	)	$	628		$	22		$	—		$	624
Cash flows from investing activities
Purchases of property, plant and equipment	—			(351		)	(25		)	—			(376		)
Purchases of available-for-sale securities	—			(356		)	—			—			(356		)
Sales and maturities of available-for-sale securities	—			258			—			—			258
Payment for purchase of acquired entities, net of cash acquired	—			—			—			—			—
Intercompany activity	107			—			—			(107		)	—
Other investing activities	—			(6		)	—			—			(6		)
Net cash provided by (used in) investing activities	107			(455		)	(25		)	(107		)	(480		)
Cash flows from financing activities
Purchases of treasury stock	—			—			—			—			—
Common stock dividends paid	(88		)	—			—			—			(88		)
Issuance of common stock	10			—			—			—			10
Excess tax benefit related to exercise of team member stock options	—			—			—			—			—
Proceeds from long-term borrowings	—			—			—			—			—
Proceed for revolving line of credit	—			—			—			—			—
Payments on long-term debt and capital lease obligations	(2		)	—			—			—			(2		)
Intercompany activity	—			(113		)	6			107			—
Other financing activities	(1		)	—			—			—			(1		)
Net cash provided by (used in) financing activities	(81		)	(113		)	6			107			(81		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			—			—			—
Net change in cash, cash equivalents, and restricted cash	—			60			3			—			63
Cash, cash equivalents, and restricted cash at beginning of period	—			368			105			—			473
Cash, cash equivalents, and restricted cash at end of period	$	—		$	428		$	108		$	—		$	536

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	—		$	547		$	28		$	—		$	575
Cash flows from investing activities
Purchases of property, plant and equipment	—			(302		)	(36		)	—			(338		)
Purchases of available-for-sale securities	—			(176		)	—			—			(176		)
Sales and maturities of available-for-sale securities	—			350			—			—			350
Payment for purchase of acquired entities, net of cash acquired	—			—			(11		)	—			(11		)
Intercompany activity	(174		)	—			—			174			—
Other investing activities	—			(10		)	—			—			(10		)
Net cash used in investing activities	(174		)	(138		)	(47		)	174			(185		)
Cash flows from financing activities
Purchases of treasury stock	(734		)	—			—			—			(734		)
Common stock dividends paid	(90		)	—			—			—			(90		)
Issuance of common stock	11			—			—			—			11
Excess tax benefit related to exercise of team member stock options	1			—			—			—			1
Proceeds from long-term borrowings	999			—			—			—			999
Proceed for revolving line of credit	300			—			—			—			300
Payments on long-term debt and capital lease obligations	(305		)	—			—			—			(305		)
Intercompany activity	—			155			19			(174		)	—
Other financing activities	(8		)	—			—			—			(8		)
Net cash provided by financing activities	174			155			19			(174		)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			2			—			2
Net change in cash, cash equivalents, and restricted cash	—			564			2			—			566
Cash, cash equivalents, and restricted cash at beginning of period	—			261			103			—			364
Cash, cash equivalents, and restricted cash at end of period	$	—		$	825		$	105		$	—		$	930

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Subsequent Events Subsequent Events

6 Months Ended

Apr. 09, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

On May 10, 2017, the Board authorized a new $1.25 billion share repurchase program, with the intent to opportunistically utilize the authorization over the next 18 months. The new authorization will replace the Company’s existing program.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Apr. 09, 2017

Accounting Policies [Abstract]

Fiscal Period, Policy [Policy Text Block]

The Company reports its results of operations on a 52- or 53-week fiscal year ending on the last Sunday in September. The first fiscal quarter is 16 weeks, the second and third quarters each are 12 weeks, and the fourth quarter is 12 or 13 weeks. Fiscal years 2017 and 2016 are 52-week years.

New Accounting Pronouncements, Policy [Policy Text Block]

The following table provides a brief description of recently issued accounting pronouncements that have not yet been adopted. Early adoption is permitted for all updates unless stated.

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2017-04 Simplifying the Test for Goodwill Impairment (Topic 350)	The amendments eliminate Step 2 from the goodwill impairment test. Instead, an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value should be recognized; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss should also be considered, if applicable. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 27, 2020	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-13 Measurement of Credit Losses on Financial Instruments(Topic 326)	The amendments guide on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendments require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments also require that credit losses on available-for-sale debt securities be presented as an allowance. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic.	First quarter of fiscal year ending September 29, 2021	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-09 Improvements to Employee Share-Based Payment Accounting (Topic 718)	The amendments aim to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, and certain classifications on the statement of cash flows. The amendments should be applied on either a prospective, retrospective, or modified-retrospective basis depending on the subtopic.	First quarter of fiscal year ending September 30, 2018	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (Topic 606)	The amendments, which do not change the core principle of the guidance in Topic 606, clarify the implementation guidance on principal versus agent considerations, including how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-07 Simplifying the Transition to the Equity Method of Accounting (Topic 323)	The amendments eliminate the requirement to retroactively apply the equity method of accounting when an investment qualifies for the use of the equity method due to an increase in the level of ownership interest or degree of influence. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.

Standard	Description	Effective Date	Effect on financial statements and other significant matters
ASU No. 2016-04 Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) (Subtopic 405-20)	The amendments require entities to recognize liabilities related to the sale of prepaid stored-value products redeemable for goods, services or cash as financial liabilities in the scope of ASC 405. Additionally, the new guidance amends ASC 405-20 to include a narrow scope exception requiring entities to recognize breakage for these liabilities in a way that is consistent with how gift card breakage will be recognized under the new revenue recognition standard. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2016-02 Leases (Topic 842)	The amendments require lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is largely unchanged. The amendments should be applied on a modified retrospective basis.	First quarter of fiscal year ending September 27, 2020	The adoption of this ASU will result in a significant increase to the Company’s Consolidated Balance Sheets for lease liabilities and right-of-use assets, and the Company is currently evaluating the other effects of adoption of this ASU on its Consolidated Financial Statements.
ASU No. 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)	The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet in year of adoption. Early adoption is permitted for only certain amendments of the update.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the impact that the adoption of these provisions will have on the Company’s consolidated financial statements.
ASU No. 2015-17 Balance Sheet Classification of Deferred Taxes (Topic 740)	The amendments simplify the presentation of deferred income taxes by requiring that all deferred tax liabilities and assets be classified as noncurrent in the statement of financial position. The amendments may be applied on either a prospective or retrospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330)	The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost and net realizable value. The amendments should be applied on a prospective basis.	First quarter of fiscal year ending September 30, 2018	We do not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.
ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606)	The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized. The amendments may be applied on either a full or modified retrospective basis.	First quarter of fiscal year ending September 29, 2019	We are currently evaluating the timing, method, and impact that the adoption of these provisions will have on the Company’s consolidated financial statements.

Earnings Per Share, Policy [Policy Text Block]

The computation of basic earnings per share is based on the number of weighted average common shares outstanding during the period. The computation of diluted earnings per share includes the dilutive effect of common stock equivalents consisting of incremental common shares deemed outstanding from the assumed exercise of stock options and the dilutive effect of restricted stock awards.

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Basis of Presentation (Tables)

6 Months Ended

Apr. 09, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Entity Wide Information Geographic Area Revenue [Table Text Block]

The following is a summary of percentage sales by geographic area for the periods indicated:

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Sales:
United States	97.1	%	97.1	%	97.1	%	97.1	%
Canada and United Kingdom	2.9		2.9		2.9		2.9
Total sales	100.0	%	100.0	%	100.0	%	100.0	%

Schedule of Entity Wide Information Geographic Area Long-Lived Assets [Table Text Block]

The following is a summary of the percentage of net long-lived assets by geographic area as of the dates indicated:

	April 9, 2017		September 25, 2016
Long-lived assets, net:
United States	97.5	%	97.5	%
Canada and United Kingdom	2.5		2.5
Total long-lived assets, net	100.0	%	100.0	%

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Fair Value Measurements (Tables)

6 Months Ended

Apr. 09, 2017

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

The Company held the following financial assets measured at fair value on a recurring basis based on the hierarchy levels indicated (in millions):

April 9, 2017	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	2	$	—	$	—	$	2
Marketable securities - available-for-sale:
Municipal bonds	—		25		—		25
Variable-rate demand notes	—		451		—		451
Total	$	2	$	476	$	—	$	478

September 25, 2016	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Cash equivalents:
Money market fund	$	62	$	—	$	—	$	62
Commercial paper	—		30		—		30
Municipal bonds	—		46		—		46
Marketable securities - available-for-sale:
Commercial paper	—		30		—		30
Municipal bonds	—		26		—		26
Variable rate demand notes	—		323		—		323
Total	$	62	$	455	$	—	$	517

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Investments (Tables)

6 Months Ended

Apr. 09, 2017

Investments [Abstract]

Marketable Securities [Table Text Block]

The Company held the following investments at fair value as of the dates indicated (in millions):

	April 9, 2017		September 25, 2016
Short-term marketable securities - available-for-sale:
Commercial paper	$	—	$	30
Municipal bonds	25		26
Variable rate demand notes	451		323
Total short-term marketable securities	$	476	$	379

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Apr. 09, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived And Indefinite-Lived Intangible Assets by Major Class [Table Text Block]

The components of intangible assets as of the dates indicated were as follows (in millions):

	April 9, 2017					September 25, 2016
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Definite-lived contract-based	$	118	$	(56	)	$	120	$	(55	)
Indefinite-lived contract-based	9					9
Total	$	127	$	(56	)	$	129	$	(55	)

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Future amortization expense associated with the net carrying amount of definite-lived intangible assets is estimated to be as follows (in millions):

Remainder of fiscal year 2017	$	3
Fiscal year 2018	5
Fiscal year 2019	5
Fiscal year 2020	5
Fiscal year 2021	4
Future fiscal years	40
Total	$	62

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Reserves for Closed Properties (Tables)

6 Months Ended

Apr. 09, 2017

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

The following table provides a summary of activity in reserves for closed properties during the twenty-eight weeks ended April 9, 2017 and fiscal year ended September 25, 2016 (in millions):

	April 9, 2017			September 25, 2016
Beginning balance	$	26		$	28
Additions	27			6
Usage	(5		)	(10		)
Adjustments	1			2
Ending balance	$	49		$	26

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Long-Term Debt (Tables)

6 Months Ended

Apr. 09, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

The components of long-term debt as of the dates indicated were as follows (in millions):

	April 9, 2017			September 25, 2016
5.2% senior notes due 2025	$	1,000		$	1,000
Less: unamortized discount and debt issuance costs related to senior notes	(7		)	(7		)
Carrying value of senior notes	993			993
Capital lease obligations	56			58
Total long-term debt and capital lease obligations	1,049			1,051
Less: current installments	(2		)	(3		)
Total long-term debt and capital lease obligations, less current installments	$	1,047		$	1,048

XML

Shareholders' Equity (Tables)

6 Months Ended

Apr. 09, 2017

Equity [Abstract]

Dividends Declared [Table Text Block]

The following table provides a summary of dividends declared per common share during fiscal year 2017 to date and fiscal year 2016 (in millions, except per share amounts):

Date of declaration	Dividend per common share		Date of record	Date of payment	Total amount
Fiscal year 2017:
November 2, 2016	$	0.14	January 13, 2017	January 24, 2017	$	45
February 17, 2017 (1)	0.14		April 7, 2017	April 18, 2017	45
Fiscal year 2016:
November 4, 2015	$	0.135	January 15, 2016	January 26, 2016	$	44
March 9, 2016	0.135		April 8, 2016	April 19, 2016	44
June 7, 2016	0.135		July 1, 2016	July 12, 2016	43
September 22, 2016	0.135		October 3, 2016	October 14, 2016	43

⁽¹⁾ Dividend accrued at April 9, 2017

Schedule of Share Repurchase Programs [Table Text Block]

The following table outlines the share repurchase program authorized by the Board, and the related repurchase activity as of April 9, 2017 (in millions):

Effective date	Expiration date	Amount authorized		Cost of repurchases		Authorization available
November 4, 2015	Not applicable	$	1,000	$	557	$	443

Schedule of Shares Repurchased [Table Text Block]

Share repurchase activity for the twelve and twenty-eight weeks ended April 9, 2017 was immaterial. Share repurchase activity for the twelve and twenty-eight weeks ended April 10, 2016 was as follows (in millions, except per share amounts):

	Twelve weeks ended		Twenty-eight weeks ended
	April 10, 2016		April 10, 2016
Number of common shares acquired	3.5		24.6
Average price per common share acquired	$	28.88	$	29.81
Total cost of common shares acquired	$	100	$	734

XML

Earnings per Share (Tables)

6 Months Ended

Apr. 09, 2017

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows (in millions, except per share amounts):

	Twelve weeks ended				Twenty-eight weeks ended
	April 9, 2017		April 10, 2016		April 9, 2017		April 10, 2016
Net income (numerator for basic and diluted earnings per share)	$	99	$	142	$	194	$	299
Weighted average common shares outstanding (denominator for basic earnings per share)	318.5		324.7		318.3		331.7
Incremental common shares attributable to dilutive effect of share-based awards	0.4		0.7		0.4		1.0
Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share)	318.9		325.4		318.7		332.7
Basic earnings per share	$	0.31	$	0.44	$	0.61	$	0.90
Diluted earnings per share	$	0.31	$	0.44	$	0.61	$	0.90

XML

Guarantor Financial Statements (Tables)

6 Months Ended

Apr. 09, 2017

Guarantor Financial Statements [Abstract]

Consolidated Statements of Balance Sheets with Guarantor Information [Table Text Block]

Consolidated Balance Sheets (unaudited)

(In millions)

	April 9, 2017
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	310	$	102	$	—		$	412
Short-term investments - available-for-sale securities	—		476		—		—			476
Restricted cash	—		118		6		—			124
Accounts receivable	—		233		22		—			255
Intercompany receivable	—		728		—		(728		)	—
Merchandise inventories	—		438		70		—			508
Prepaid expenses and other current assets	1		75		43		—			119
Deferred income taxes	—		214		—		—			214
Total current assets	1		2,592		243		(728		)	2,108
Property and equipment, net of accumulated depreciation and amortization	—		3,082		387		—			3,469
Investments in consolidated subsidiaries	4,802		107		476		(5,385		)	—
Goodwill	—		703		7		—			710
Intangible assets, net of accumulated amortization	1		61		9		—			71
Deferred income taxes	—		108		6		—			114
Other assets	—		13		28		—			41
Total assets	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	2	$	—	$	—		$	2
Accounts payable	—		224		89		—			313
Intercompany payable	389		—		339		(728		)	—
Accrued payroll, bonus and other benefits due team members	—		368		25		—			393
Dividends payable	45		—		—		—			45
Other current liabilities	18		530		36		—			584
Total current liabilities	452		1,124		489		(728		)	1,337
Long-term debt and capital lease obligations, less current installments	993		46		8		—			1,047
Deferred lease liabilities	—		615		50		—			665
Other long-term liabilities	—		104		1		—			105
Total liabilities	1,445		1,889		548		(728		)	3,154
Commitments and contingencies
Total shareholders’ equity	3,359		4,777		608		(5,385		)	3,359
Total liabilities and shareholders’ equity	$	4,804	$	6,666	$	1,156	$	(6,113	)	$	6,513

Consolidated Balance Sheets (unaudited)

(In millions)

	September 25, 2016
Assets	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Current assets:
Cash and cash equivalents	$	—	$	254	$	97	$	—		$	351
Short-term investments - available-for-sale securities	—		379		—		—			379
Restricted cash	—		114		8		—			122
Accounts receivable	—		216		26		—			242
Intercompany receivable	—		649		—		(649		)	—
Merchandise inventories	—		441		76		—			517
Prepaid expenses and other current assets	—		150		17		—			167
Deferred income taxes	—		197		—		—			197
Total current assets	—		2,400		224		(649		)	1,975
Property and equipment, net of accumulated depreciation and amortization	—		3,063		379		—			3,442
Investments in consolidated subsidiaries	4,593		103		472		(5,168		)	—
Goodwill	—		702		8		—			710
Intangible assets, net of accumulated amortization	1		63		10		—			74
Deferred income taxes	—		94		6		—			100
Other assets	—		16		24		—			40
Total assets	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations	$	—	$	3	$	—	$	—		$	3
Accounts payable	—		227		80		—			307
Intercompany payable	317		—		333		(650		)	—
Accrued payroll, bonus and other benefits due team members	—		381		26		—			407
Dividends payable	43		—		—		—			43
Other current liabilities	17		536		28		—			581
Total current liabilities	377		1,147		467		(650		)	1,341
Long-term debt and capital lease obligations, less current installments	993		48		7		—			1,048
Deferred lease liabilities	—		592		48		—			640
Other long-term liabilities	—		87		1		—			88
Total liabilities	1,370		1,874		523		(650		)	3,117
Commitments and contingencies
Total shareholders’ equity	3,224		4,567		600		(5,167		)	3,224
Total liabilities and shareholders’ equity	$	4,594	$	6,441	$	1,123	$	(5,817	)	$	6,341

Consolidated Statements of Operations with Guarantor Information [Table Text Block]

Consolidated Statements of Operations (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	3,547	$	220		$	(30	)	$	3,737
Cost of goods sold and occupancy costs	—			2,332		161			(30		)	2,463
Gross profit	—			1,215		59			—			1,274
Selling, general and administrative expenses	—			1,001		56			—			1,057
Pre-opening expenses	—			12		—			—			12
Relocation, store closure and lease termination costs	—			34		—			—			34
Operating income	—			168		3			—			171
Interest expense	(11		)	—		—			—			(11		)
Investment and other expense	—			—		(1		)	3			2
Equity in net income of subsidiaries	106			1		3			(110		)	—
Income before income taxes	95			169		5			(107		)	162
Provision for income taxes	(4		)	66		1			—			63
Net income	$	99		$	103	$	4		$	(107	)	$	99

	Twelve weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Sales	$	—		$	3,512	$	223	$	(39	)	$	3,696
Cost of goods sold and occupancy costs	—			2,290		155		(39		)	2,406
Gross profit	—			1,222		68		—			1,290
Selling, general and administrative expenses	—			971		57		—			1,028
Pre-opening expenses	—			17		1		—			18
Relocation, store closure and lease termination costs	—			3		—		—			3
Operating income	—			231		10		—			241
Interest expense	(11		)	—		—		—			(11		)
Investment and other expense	—			4		—		1			5
Equity in net income of subsidiaries	149			3		9		(161		)	—
Income before income taxes	138			238		19		(160		)	235
Provision for income taxes	(4		)	94		3		—			93
Net income	$	142		$	144	$	16	$	(160	)	$	142

Consolidated Statements of Operations (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,219	$	535		$	(98	)	$	8,656
Cost of goods sold and occupancy costs	—			5,442		386			(96		)	5,732
Gross profit	—			2,777		149			(2		)	2,924
Selling, general and administrative expenses	—			2,338		136			—			2,474
Pre-opening expenses	—			30		3			—			33
Relocation, store closure and lease termination costs	—			73		1			—			74
Operating income	—			336		9			(2		)	343
Interest expense	(26		)	—		—			—			(26		)
Investment and other expense	—			—		(2		)	3			1
Equity in net income of subsidiaries	210			3		4			(217		)	—
Income before income taxes	184			339		11			(216		)	318
Provision for income taxes	(10		)	131		3			—			124
Net income	$	194		$	208	$	8		$	(216	)	$	194

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Sales	$	—		$	8,096	$	512		$	(84	)	$	8,524
Cost of goods sold and occupancy costs	—			5,318		356			(81		)	5,593
Gross profit	—			2,778		156			(3		)	2,931
Selling, general and administrative expenses	—			2,266		136			—			2,402
Pre-opening expenses	—			27		4			—			31
Relocation, store closure and lease termination costs	—			5		—			—			5
Operating income	—			480		16			(3		)	493
Interest expense	(18		)	—		—			—			(18		)
Investment and other income (expense)	—			9		(2		)	2			9
Equity in net income of subsidiaries	310			6		15			(331		)	—
Income before income taxes	292			495		29			(332		)	484
Provision for income taxes	(7		)	187		5			—			185
Net income	$	299		$	308	$	24		$	(332	)	$	299

Consolidated Statements of Comprehensive Income with Guarantor Information [Table Text Block]

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

	Twelve weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net income	$	99	$	103	$	4		$	(107	)	$	99
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		1		(3		)	—			(2		)
Other comprehensive income (loss), net of tax	—		1		(3		)	—			(2		)
Comprehensive income	$	99	$	104	$	1		$	(107	)	$	97

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	194	$	208		$	8	$	(216	)	$	194
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—		(3		)	—		—			(3		)
Other comprehensive income (loss), net of tax	—		(3		)	—		—			(3		)
Comprehensive income	$	194	$	205		$	8	$	(216	)	$	191

	Twelve weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	142	$	144		$	16	$	(160	)	$	142
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		(4		)	14		—			10
Other comprehensive loss, net of tax	—		(4		)	14		—			10
Comprehensive income	$	142	$	140		$	30	$	(160	)	$	152

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Net income	$	299	$	308	$	24	$	(332	)	$	299
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	—		—		—		—			—
Other comprehensive loss, net of tax	—		—		—		—			—
Comprehensive income	$	299	$	308	$	24	$	(332	)	$	299

Condensed Consolidated Statements of Cash Flows with Guarantor Information [Table Text Block]

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 9, 2017
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	(26	)	$	628		$	22		$	—		$	624
Cash flows from investing activities
Purchases of property, plant and equipment	—			(351		)	(25		)	—			(376		)
Purchases of available-for-sale securities	—			(356		)	—			—			(356		)
Sales and maturities of available-for-sale securities	—			258			—			—			258
Payment for purchase of acquired entities, net of cash acquired	—			—			—			—			—
Intercompany activity	107			—			—			(107		)	—
Other investing activities	—			(6		)	—			—			(6		)
Net cash provided by (used in) investing activities	107			(455		)	(25		)	(107		)	(480		)
Cash flows from financing activities
Purchases of treasury stock	—			—			—			—			—
Common stock dividends paid	(88		)	—			—			—			(88		)
Issuance of common stock	10			—			—			—			10
Excess tax benefit related to exercise of team member stock options	—			—			—			—			—
Proceeds from long-term borrowings	—			—			—			—			—
Proceed for revolving line of credit	—			—			—			—			—
Payments on long-term debt and capital lease obligations	(2		)	—			—			—			(2		)
Intercompany activity	—			(113		)	6			107			—
Other financing activities	(1		)	—			—			—			(1		)
Net cash provided by (used in) financing activities	(81		)	(113		)	6			107			(81		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			—			—			—
Net change in cash, cash equivalents, and restricted cash	—			60			3			—			63
Cash, cash equivalents, and restricted cash at beginning of period	—			368			105			—			473
Cash, cash equivalents, and restricted cash at end of period	$	—		$	428		$	108		$	—		$	536

Condensed Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Twenty-eight weeks ended April 10, 2016
	Parent/Issuer			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net cash provided by (used in) operating activities	$	—		$	547		$	28		$	—		$	575
Cash flows from investing activities
Purchases of property, plant and equipment	—			(302		)	(36		)	—			(338		)
Purchases of available-for-sale securities	—			(176		)	—			—			(176		)
Sales and maturities of available-for-sale securities	—			350			—			—			350
Payment for purchase of acquired entities, net of cash acquired	—			—			(11		)	—			(11		)
Intercompany activity	(174		)	—			—			174			—
Other investing activities	—			(10		)	—			—			(10		)
Net cash used in investing activities	(174		)	(138		)	(47		)	174			(185		)
Cash flows from financing activities
Purchases of treasury stock	(734		)	—			—			—			(734		)
Common stock dividends paid	(90		)	—			—			—			(90		)
Issuance of common stock	11			—			—			—			11
Excess tax benefit related to exercise of team member stock options	1			—			—			—			1
Proceeds from long-term borrowings	999			—			—			—			999
Proceed for revolving line of credit	300			—			—			—			300
Payments on long-term debt and capital lease obligations	(305		)	—			—			—			(305		)
Intercompany activity	—			155			19			(174		)	—
Other financing activities	(8		)	—			—			—			(8		)
Net cash provided by financing activities	174			155			19			(174		)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			2			—			2
Net change in cash, cash equivalents, and restricted cash	—			564			2			—			566
Cash, cash equivalents, and restricted cash at beginning of period	—			261			103			—			364
Cash, cash equivalents, and restricted cash at end of period	$	—		$	825		$	105		$	—		$	930

XML

Basis of Presentation (Percentage Sales by Geographic Area) (Details)	3 Months Ended		6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016
Percentage sales by geographic area
Percentage of Total Sales	100.00%	100.00%	100.00%	100.00%
United States [Member]
Percentage sales by geographic area
Percentage of Total Sales	97.10%	97.10%	97.10%	97.10%
Canada and United Kingdom [Member]
Percentage sales by geographic area
Percentage of Total Sales	2.90%	2.90%	2.90%	2.90%

XML

Basis of Presentation (Percentage of Net Long-Lived Assets by Geographic Area) (Details)	Apr. 09, 2017	Sep. 25, 2016
Percentage net long-lived assets by geographic area
Percentage of Total Net Long-Lived Assets	100.00%	100.00%
United States [Member]
Percentage net long-lived assets by geographic area
Percentage of Total Net Long-Lived Assets	97.50%	97.50%
Canada and United Kingdom [Member]
Percentage net long-lived assets by geographic area
Percentage of Total Net Long-Lived Assets	2.50%	2.50%

XML

Basis of Presentation (Narrative) (Details) - Segment	6 Months Ended	12 Months Ended
	Apr. 09, 2017	Sep. 25, 2016
Organization Consolidation and Presentation [Line Items]
Number of Operating Segments	1
Number of Reportable Segments	1
Fiscal Year [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	364 days	364 days
Fiscal Year [Member] | Minimum [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	364 days
Fiscal Year [Member] | Maximum [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	371 days
First Quarter [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	112 days
Second Quarter [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	84 days
Third Quarter [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	84 days
Fourth Quarter [Member] | Minimum [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	84 days
Fourth Quarter [Member] | Maximum [Member]
Organization Consolidation and Presentation [Line Items]
Fiscal Period Duration	91 days

XML

Fair Value Measurements (Fair Value Hierarchy) (Details) - Fair value, Measurements, Recurring [Member] - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016
Assets, Fair Value Disclosure [Abstract]
Total	$ 478	$ 517
Level 1 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Total	2	62
Level 2 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Total	476	455
Money Market Funds [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure	2	62
Money Market Funds [Member] | Level 1 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure	2	62
Commercial Paper [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure		30
Marketable Securities - Available-for-sale		30
Commercial Paper [Member] | Level 2 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure		30
Marketable Securities - Available-for-sale		30
Municipal Notes Bonds [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure		46
Marketable Securities - Available-for-sale	25	26
Municipal Notes Bonds [Member] | Level 2 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Equivalents, Fair Value Disclosure		46
Marketable Securities - Available-for-sale	25	26
Variable Rate Demand Obligation [Member]
Assets, Fair Value Disclosure [Abstract]
Marketable Securities - Available-for-sale	451	323
Variable Rate Demand Obligation [Member] | Level 2 Inputs [Member]
Assets, Fair Value Disclosure [Abstract]
Marketable Securities - Available-for-sale	$ 451	$ 323

XML

Fair Value Measurements Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	4 Months Ended
	Apr. 09, 2017	Jan. 15, 2017
Relocation, Store Closure and Lease Termination Cost [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of Long-Lived Assets, on a Nonrecurring Basis	$ 34	$ 34

XML

Investments (Investments at Fair Value) (Details) - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	$ 476	$ 379
Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current		30
Municipal Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	25	26
Variable Rate Demand Obligation [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	$ 451	$ 323

XML

Investments (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Apr. 09, 2017	Sep. 25, 2016
Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	$ 0	$ 33
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	$ 0
Short-term Investments Average Effective Maturity Period (in months), Less Than and Approximately, Respectively	1 month	1 month
Cost Method Investments	$ 24	$ 19

XML

Goodwill and Other Intangible Assets (Components of Intangible Assets) (Details) - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016
Finite and Indefinite-Lived Intangible Assets [Line Items]
Finite and Indefinite-Lived Intangible Assets, Gross	$ 127	$ 129
Finite-Lived Intangible Assets, Accumulated Amortization	(56)	(55)
Contract-Based Intangible Assets [Member]
Finite and Indefinite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	118	120
Finite-Lived Intangible Assets, Accumulated Amortization	(56)	(55)
Contract-Based Intangible Assets [Member]
Finite and Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets	$ 9	$ 9

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Goodwill and Other Intangible Assets (Future Amortization Expense) (Details) $ in Millions	Apr. 09, 2017 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	$ 3
Finite-Lived Intangible Assets, Amortization Expense, Year Two	5
Finite-Lived Intangible Assets, Amortization Expense, Year Three	5
Finite-Lived Intangible Assets, Amortization Expense, Year Four	5
Finite-Lived Intangible Assets, Amortization Expense, Year Five	4
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	40
Finite-Lived Intangible Assets, Future Amortization Expense	$ 62

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Additions	$ 0	$ 0
Goodwill, Adjustments	$ 0	$ 0

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Store and Facility Closures (Details) $ in Millions	3 Months Ended	4 Months Ended	6 Months Ended	12 Months Ended
	Apr. 09, 2017 USD ($) Closure	Jan. 15, 2017 USD ($)	Apr. 09, 2017 USD ($)	Sep. 25, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
New Closures, Number | Closure	9
New Kitchen Closures, Number | Closure	3
Restructuring Charges | $	$ 30		$ 27	$ 6
Relocation, Store Closure and Lease Termination Cost [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Restructuring Cost and Reserve [Line Items]
Impairment of Long-Lived Assets, on a Nonrecurring Basis | $	$ 34	$ 34

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Reserves for Closed Properties (Reserves for Closed Properties) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Apr. 09, 2017	Apr. 09, 2017	Sep. 25, 2016
Restructuring Reserve [Roll Forward]
Beginning Balance		$ 26	$ 28
Additions	$ 30	27	6
Usage		(5)	(10)
Adjustments		1	2
Ending Balance	$ 49	$ 49	$ 26

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Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016
Debt Instrument [Line Items]
Total Long-Term Debt and Capital Lease Obligations	$ 1,049	$ 1,051
Less: Current Installments	(2)	(3)
Total Long-Term Debt and Capital Lease Obligations, Less Current Installments	1,047	1,048
Unsecured Debt [Member] | 5.2% Senior Notes due 2025 [Member]
Debt Instrument [Line Items]
5.2% Senior Notes due 2025	1,000	1,000
Less: Unamortized Discount and Debt Issuance Costs Related to Senior Notes	(7)	(7)
Carrying Value of Senior Notes	993	993
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Capital Lease Obligations	$ 56	$ 58

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Long-Term Debt (Credit Agreement) (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Apr. 09, 2017	Apr. 09, 2017	Apr. 10, 2016
Line of Credit Facility [Line Items]
Proceeds from revolving line of credit	$ 0		$ 300
Repayments of Lines of Credit			$ 300
Long-term Line of Credit	0	$ 0
Unsecured Debt [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 500	500
Conditional Additional Borrowing Capacity Under Line of Credit Facility		250
Unsecured Debt [Member] | Letter of Credit [Member]
Line of Credit Facility [Line Items]
Conditional Additional Borrowing Capacity Under Line of Credit Facility		$ 250

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Long-Term Debt (Senior Notes) (Narrative) (Details) - Unsecured Debt [Member] - 5.2% Senior Notes due 2025 [Member] - USD ($) $ in Millions	6 Months Ended
	Apr. 09, 2017	Sep. 25, 2016
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 1,000	$ 1,000
Debt Instrument, Interest Rate, Stated Percentage	5.20%
Debt Instrument, Frequency of Interest Payment	semiannually
Debt Instrument, Maturity Date	Dec. 03, 2025
Debt Instrument, Interest Rate During Period	5.28%
Fair Value, Debt Instrument, Fair Value Exceeded Carrying Value	$ 72

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Income Taxes (Narrative) (Details)	3 Months Ended		4 Months Ended	6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Jan. 15, 2017	Apr. 10, 2016
Income Tax Disclosure [Abstract]
Effective Tax Rate, Percent	39.00%	39.50%	39.00%	38.20%

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Shareholders' Equity (Dividends Declared per Common Share) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended					4 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2017	Apr. 09, 2017	Sep. 25, 2016	Jul. 03, 2016	Apr. 10, 2016	Jan. 15, 2017	Jan. 17, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Dividends Per Common Share [Abstract]
Dividends Payable, Date Declared		Feb. 17, 2017	Sep. 22, 2016	Jun. 07, 2016	Mar. 09, 2016	Nov. 02, 2016	Nov. 04, 2015
Dividends declared per common share (in dollars per share)		$ 0.14	$ 0.135	$ 0.135	$ 0.135	$ 0.14	$ 0.135	$ 0.28	$ 0.27	$ 0.54
Dividends Payable, Date of Record		Apr. 07, 2017	Oct. 03, 2016	Jul. 01, 2016	Apr. 08, 2016	Jan. 13, 2017	Jan. 15, 2016
Dividends Payable, Date to be Paid		Apr. 18, 2017	Oct. 14, 2016	Jul. 12, 2016	Apr. 19, 2016	Jan. 24, 2017	Jan. 26, 2016
Dividends, Common Stock, Cash		$ 45	$ 43	$ 43	$ 44	$ 45	$ 44	$ 89		$ 174
Subsequent Event [Member]
Dividends Per Common Share [Abstract]
Dividends declared per common share (in dollars per share)	$ 0.1806

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Shareholders' Equity (Share Repurchase Programs) (Details) - Nov. 4, 2015 Share Repurchase Program [Member]	Apr. 09, 2017 USD ($)
Stock Repurchase Program, Authorized Amount	$ 1,000,000,000
Stock Repurchase Program, Amount Utilized For Repurchases	557,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 443,000,000

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Shareholders' Equity (Share Repurchase Activity) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Apr. 10, 2016	Apr. 10, 2016	Sep. 25, 2016
Equity [Abstract]
Treasury Stock, Shares, Acquired	3.5	24.6
Treasury Stock Acquired, Average Cost Per Share	$ 28.88	$ 29.81
Treasury Stock, Value, Acquired, Cost Method	$ 100	$ 734	$ 944

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions	3 Months Ended					4 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2017	Apr. 09, 2017	Sep. 25, 2016	Jul. 03, 2016	Apr. 10, 2016	Jan. 15, 2017	Jan. 17, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016	May 10, 2017
Treasury Stock [Abstract]
Treasury Stock Reissued During Period, Shares								0.6	0.5
Treasury Stock Reissued During Period, Value								$ 21,000,000	$ 22,000,000
Treasury Stock, Shares		58.2	58.7					58.2		58.7
Treasury Stock, Value		$ 2,004,000,000	$ 2,026,000,000					$ 2,004,000,000		$ 2,026,000,000
Dividends declared per common share (in dollars per share)		$ 0.14	$ 0.135	$ 0.135	$ 0.135	$ 0.14	$ 0.135	$ 0.28	$ 0.27	$ 0.54
Nov. 4, 2015 Share Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount		$ 1,000,000,000						$ 1,000,000,000
Subsequent Event [Member]
Increase in regular quarterly dividend	29.00%
Treasury Stock [Abstract]
Dividends declared per common share (in dollars per share)	$ 0.1806
Subsequent Event [Member] | May 10, 2017 Share Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount											$ 1,250,000,000

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Earnings per Share (Earnings per Share Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Earnings Per Share [Abstract]
Net Income	$ 99	$ 142	$ 194	$ 299	$ 507
Weighted Average Number of Shares Outstanding, Basic	318.5	324.7	318.3	331.7
Potential common shares outstanding [Abstract]
Incremental Common Shares Attributable to Dilutive Effect of Share-based Awards	0.4	0.7	0.4	1.0
Weighted Average Number of Shares Outstanding, Diluted	318.9	325.4	318.7	332.7
Basic earnings per share (in dollars per share)	$ 0.31	$ 0.44	$ 0.61	$ 0.90
Diluted earnings per share (in dollars per share)	$ 0.31	$ 0.44	$ 0.61	$ 0.90

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Earnings per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	24.0	20.9	24.3	19.7

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Share-Based Payments (Narrative) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Payment Expense	$ 9	$ 12	$ 23	$ 28
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	31.2		31.2		29.8
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 51		$ 51		$ 73
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares	9.7		9.7		10.5
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years 6 months

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Consolidated Statements of Balance Sheets with Guarantor Information (Details) - USD ($) $ in Millions	Apr. 09, 2017	Sep. 25, 2016	Sep. 27, 2015
Current assets:
Cash and cash equivalents	$ 412	$ 351
Short-term investments - available-for-sale securities	476	379
Restricted cash	124	122
Accounts receivable	255	242
Merchandise inventories	508	517
Prepaid expenses and other current assets	119	167
Deferred income taxes	214	197
Total current assets	2,108	1,975
Property and equipment, net of accumulated depreciation and amortization	3,469	3,442
Goodwill	710	710
Intangible assets, net of accumulated amortization	71	74
Deferred income taxes	114	100
Other assets	41	40
Total assets	6,513	6,341
Current liabilities:
Current installments of long-term debt and capital lease obligations	2	3
Accounts payable	313	307
Accrued payroll, bonus and other benefits due team members	393	407
Dividends payable	45	43
Other current liabilities	584	581
Total current liabilities	1,337	1,341
Long-term debt and capital lease obligations, less current installments	1,047	1,048
Deferred lease liabilities	665	640
Other long-term liabilities	105	88
Total liabilities	3,154	3,117
Commitments and contingencies
Shareholders’ equity:
Total shareholders’ equity	3,359	3,224	$ 3,769
Total liabilities and shareholders’ equity	6,513	6,341
Parent Company [Member]
Current assets:
Prepaid expenses and other current assets	1
Total current assets	1
Investments in consolidated subsidiaries	4,802	4,593
Intangible assets, net of accumulated amortization	1	1
Total assets	4,804	4,594
Current liabilities:
Intercompany payable	389	317
Dividends payable	45	43
Other current liabilities	18	17
Total current liabilities	452	377
Long-term debt and capital lease obligations, less current installments	993	993
Total liabilities	1,445	1,370
Commitments and contingencies
Shareholders’ equity:
Total shareholders’ equity	3,359	3,224
Total liabilities and shareholders’ equity	4,804	4,594
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	310	254
Short-term investments - available-for-sale securities	476	379
Restricted cash	118	114
Accounts receivable	233	216
Intercompany receivable	728	649
Merchandise inventories	438	441
Prepaid expenses and other current assets	75	150
Deferred income taxes	214	197
Total current assets	2,592	2,400
Property and equipment, net of accumulated depreciation and amortization	3,082	3,063
Investments in consolidated subsidiaries	107	103
Goodwill	703	702
Intangible assets, net of accumulated amortization	61	63
Deferred income taxes	108	94
Other assets	13	16
Total assets	6,666	6,441
Current liabilities:
Current installments of long-term debt and capital lease obligations	2	3
Accounts payable	224	227
Accrued payroll, bonus and other benefits due team members	368	381
Other current liabilities	530	536
Total current liabilities	1,124	1,147
Long-term debt and capital lease obligations, less current installments	46	48
Deferred lease liabilities	615	592
Other long-term liabilities	104	87
Total liabilities	1,889	1,874
Commitments and contingencies
Shareholders’ equity:
Total shareholders’ equity	4,777	4,567
Total liabilities and shareholders’ equity	6,666	6,441
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	102	97
Restricted cash	6	8
Accounts receivable	22	26
Merchandise inventories	70	76
Prepaid expenses and other current assets	43	17
Total current assets	243	224
Property and equipment, net of accumulated depreciation and amortization	387	379
Investments in consolidated subsidiaries	476	472
Goodwill	7	8
Intangible assets, net of accumulated amortization	9	10
Deferred income taxes	6	6
Other assets	28	24
Total assets	1,156	1,123
Current liabilities:
Accounts payable	89	80
Intercompany payable	339	333
Accrued payroll, bonus and other benefits due team members	25	26
Other current liabilities	36	28
Total current liabilities	489	467
Long-term debt and capital lease obligations, less current installments	8	7
Deferred lease liabilities	50	48
Other long-term liabilities	1	1
Total liabilities	548	523
Commitments and contingencies
Shareholders’ equity:
Total shareholders’ equity	608	600
Total liabilities and shareholders’ equity	1,156	1,123
Eliminations [Member]
Current assets:
Intercompany receivable	(728)	(649)
Total current assets	(728)	(649)
Investments in consolidated subsidiaries	(5,385)	(5,168)
Total assets	(6,113)	(5,817)
Current liabilities:
Intercompany payable	(728)	(650)
Total current liabilities	(728)	(650)
Total liabilities	(728)	(650)
Commitments and contingencies
Shareholders’ equity:
Total shareholders’ equity	(5,385)	(5,167)
Total liabilities and shareholders’ equity	$ (6,113)	$ (5,817)

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Consolidated Statements of Operations with Guarantor Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Income Statement
Sales	$ 3,737	$ 3,696	$ 8,656	$ 8,524
Cost of goods sold and occupancy costs	2,463	2,406	5,732	5,593
Gross profit	1,274	1,290	2,924	2,931
Selling, general and administrative expenses	1,057	1,028	2,474	2,402
Pre-opening expenses	12	18	33	31
Relocation, store closure and lease termination costs	34	3	74	5
Operating income	171	241	343	493
Interest expense	(11)	(11)	(26)	(18)
Investment and other income (expense)	2	5	1	9
Income before income taxes	162	235	318	484
Provision for income taxes	63	93	124	185
Net income	99	142	194	299	$ 507
Parent Company [Member]
Income Statement
Interest expense	(11)	(11)	26	(18)
Equity in net income of subsidiaries	106	149	210	310
Income before income taxes	95	138	184	292
Provision for income taxes	(4)	(4)	(10)	(7)
Net income	99	142	194	299
Guarantor Subsidiaries [Member]
Income Statement
Sales	3,547	3,512	8,219	8,096
Cost of goods sold and occupancy costs	2,332	2,290	5,442	5,318
Gross profit	1,215	1,222	2,777	2,778
Selling, general and administrative expenses	1,001	971	2,338	2,266
Pre-opening expenses	12	17	30	27
Relocation, store closure and lease termination costs	34	3	73	5
Operating income	168	231	336	480
Investment and other income (expense)		4		9
Equity in net income of subsidiaries	1	3	3	6
Income before income taxes	169	238	339	495
Provision for income taxes	66	94	131	187
Net income	103	144	208	308
Non-Guarantor Subsidiaries [Member]
Income Statement
Sales	220	223	535	512
Cost of goods sold and occupancy costs	161	155	386	356
Gross profit	59	68	149	156
Selling, general and administrative expenses	56	57	136	136
Pre-opening expenses		1	3	4
Relocation, store closure and lease termination costs			1
Operating income	3	10	9	16
Investment and other income (expense)	(1)		(2)	(2)
Equity in net income of subsidiaries	3	9	4	15
Income before income taxes	5	19	11	29
Provision for income taxes	1	3	3	5
Net income	4	16	8	24
Eliminations [Member]
Income Statement
Sales	(30)	(39)	(98)	(84)
Cost of goods sold and occupancy costs	(30)	(39)	(96)	(81)
Gross profit			(2)	(3)
Operating income			(2)	(3)
Investment and other income (expense)	3	1	3	2
Equity in net income of subsidiaries	(110)	(161)	(217)	(331)
Income before income taxes	(107)	(160)	(216)	(332)
Net income	$ (107)	$ (160)	$ (216)	$ (332)

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Consolidated Statements of Comprehensive Income with Guarantor Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 09, 2017	Apr. 10, 2016	Apr. 09, 2017	Apr. 10, 2016	Sep. 25, 2016
Net income	$ 99	$ 142	$ 194	$ 299	$ 507
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency translation adjustments	(2)	10	(3)
Other comprehensive income (loss), net of tax	(2)	10	(3)		$ (4)
Comprehensive income (loss)	97	152	191	299
Parent Company [Member]
Net income	99	142	194	299
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive income (loss)	99	142	194	299
Guarantor Subsidiaries [Member]
Net income	103	144	208	308
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency translation adjustments	1	(4)	(3)
Other comprehensive income (loss), net of tax	1	(4)	(3)
Comprehensive income (loss)	104	140	205	308
Non-Guarantor Subsidiaries [Member]
Net income	4	16	8	24
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency translation adjustments	(3)	14
Other comprehensive income (loss), net of tax	(3)	14
Comprehensive income (loss)	1	30	8	24
Eliminations [Member]
Net income	(107)	(160)	(216)	(332)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive income (loss)	$ (107)	$ (160)	$ (216)	$ (332)

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Condensed Consolidated Statements of Cash Flows with Guarantor Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Apr. 09, 2017	Apr. 09, 2017	Apr. 10, 2016
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net cash provided by (used in) operating activities		$ 624	$ 575
Net Cash Provided by (Used in) Investing Activities [Abstract]
Purchases of property, plant and equipment		(376)	(338)
Purchases of available-for-sale securities		(356)	(176)
Sales and maturities of available-for-sale securities		258	350
Payment for purchase of acquired entities, net of cash acquired			(11)
Other investing activities		(6)	(10)
Net cash provided by (used in) investing activities		(480)	(185)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Purchases of treasury stock			(734)
Common stock dividends paid		(88)	(90)
Issuance of common stock		10	11
Excess tax benefit related to exercise of team member stock options			1
Proceeds from long-term borrowings			999
Proceeds from revolving line of credit	$ 0		300
Payments on long-term debt and capital lease obligations		(2)	(305)
Other financing activities		(1)	(8)
Net cash provided by (used in) financing activities		(81)	174
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			2
Net change in cash, cash equivalents, and restricted cash		63	566
Cash, cash equivalents, and restricted cash at beginning of period		473	364
Cash, cash equivalents, and restricted cash at end of period	536	536	930
Parent Company [Member]
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net cash provided by (used in) operating activities		(26)
Net Cash Provided by (Used in) Investing Activities [Abstract]
Intercompany activity		107	(174)
Net cash provided by (used in) investing activities		107	(174)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Purchases of treasury stock			(734)
Common stock dividends paid		(88)	(90)
Issuance of common stock		10	11
Excess tax benefit related to exercise of team member stock options			1
Proceeds from long-term borrowings			999
Proceeds from revolving line of credit			300
Payments on long-term debt and capital lease obligations		(2)	(305)
Other financing activities		(1)	(8)
Net cash provided by (used in) financing activities		(81)	174
Guarantor Subsidiaries [Member]
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net cash provided by (used in) operating activities		628	547
Net Cash Provided by (Used in) Investing Activities [Abstract]
Purchases of property, plant and equipment		(351)	(302)
Purchases of available-for-sale securities		(356)	(176)
Sales and maturities of available-for-sale securities		258	350
Other investing activities		(6)	(10)
Net cash provided by (used in) investing activities		(455)	(138)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Intercompany activity		(113)	155
Net cash provided by (used in) financing activities		(113)	155
Net change in cash, cash equivalents, and restricted cash		60	564
Cash, cash equivalents, and restricted cash at beginning of period		368	261
Cash, cash equivalents, and restricted cash at end of period	428	428	825
Non-Guarantor Subsidiaries [Member]
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net cash provided by (used in) operating activities		22	28
Net Cash Provided by (Used in) Investing Activities [Abstract]
Purchases of property, plant and equipment		(25)	(36)
Payment for purchase of acquired entities, net of cash acquired			(11)
Net cash provided by (used in) investing activities		(25)	(47)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Intercompany activity		6	19
Net cash provided by (used in) financing activities		6	19
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			2
Net change in cash, cash equivalents, and restricted cash		3	2
Cash, cash equivalents, and restricted cash at beginning of period		105	103
Cash, cash equivalents, and restricted cash at end of period	$ 108	108	105
Eliminations [Member]
Net Cash Provided by (Used in) Investing Activities [Abstract]
Intercompany activity		(107)	174
Net cash provided by (used in) investing activities		(107)	174
Net Cash Provided by (Used in) Financing Activities [Abstract]
Intercompany activity		107	(174)
Net cash provided by (used in) financing activities		$ 107	$ (174)

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Subsequent Events Subsequent Events (Details)	May 10, 2017 USD ($)
Subsequent Event [Member] | May 10, 2017 Share Repurchase Program [Member]
Subsequent Event [Line Items]
Stock Repurchase Program, Authorized Amount	$ 1,250,000,000