Derivatives and Currency Exchange Risk Management

9 Months Ended

Jan. 23, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Currency Exchange Risk Management

Derivatives and Currency Exchange Risk Management

The Company uses derivative instruments and foreign currency denominated debt to manage the impact that currency exchange rate and interest rate changes have on reported financial statements. The Company does not enter into derivative contracts for speculative purposes.

Cash Flow Hedges

The Company uses foreign currency forward and option contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.

At inception, foreign currency forward and option contracts are designated as cash flow hedges. Changes in the fair value of these derivatives are reported as a component of accumulated other comprehensive loss until the hedged transaction affects earnings. When the hedged transaction affects earnings, the gain or loss on the derivative is reclassified to earnings. Amounts excluded from the measurement of hedge effectiveness are recognized in earnings on a straight-line basis over the term of the hedge. Cash flows are reported as operating activities in the consolidated statements of cash flows.

The Company's cash flow hedges will mature within the subsequent two-year period. At January 23, 2026 and April 25, 2025, the Company had $116 million and $149 million in after-tax unrealized losses, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss. The Company expects that $80 million of after-tax net unrealized losses at January 23, 2026 will be recognized in the consolidated statements of income over the next 12 months.

Net Investment Hedges

The Company uses derivative instruments and foreign currency denominated debt to manage foreign currency risk associated with its net investment in foreign operations. The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts.

For instruments that are designated as net investment hedges, the gains or losses are reported as a component of accumulated other comprehensive loss. The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary. Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge. During the three and nine months ended January 23, 2026, the Company recognized $42 million and $127 million, respectively, of after-tax unrealized gains representing excluded components in interest expense, net. During the three and nine months ended January 24, 2025, the Company recognized $50 million and $148 million, respectively, of after-tax unrealized gains representing excluded components in interest expense, net. The cash flows related to the Company's derivative instruments designated as net investment hedges are reported as investing activities in the consolidated statements of cash flows. Cash flows attributable to amounts excluded from the assessment of effectiveness are reported as operating activities in the consolidated statements of cash flows.

Fair Value Hedges

In fiscal year 2025, the Company began using foreign currency forward contracts designated as fair value hedges to manage its exposure to changes in the fair value of a fixed-rate debt obligation. The contracts matured during the first quarter of fiscal year 2026.

At inception, foreign currency forward contracts are designated as fair value hedges. Changes in the fair value of these derivatives are reported as a component of other operating expense (income), net. Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge and were not material for the nine months ended January 23, 2026 and the three and nine months ended January 24, 2025. Cash flows related to the Company's derivative instruments designated as fair value hedges are reported as financing activities in the consolidated statements of cash flows. Cash flows attributed to amounts excluded from the assessment of effectiveness are reported as operating activities in the consolidated statements of cash flows.

Undesignated Derivatives

The Company uses foreign currency forward exchange contracts to offset the Company’s exposure to the change in the value of non-functional currency denominated assets, liabilities, and cash flows.

These foreign currency forward exchange rate contracts are not designated as hedges at inception, and therefore, changes in the fair value of these contracts are recognized in the consolidated statements of income. Cash flows related to the Company’s undesignated derivative contracts are reported in the consolidated statements of cash flows based on the nature of the derivative instrument.

Outstanding Instruments

The following table presents the contractual amounts of the Company's outstanding instruments:

		As of
(in billions)	Designation	January 23, 2026		April 25, 2025
Currency exchange rate contracts	Cash flow hedge	$	8.9	$	10.6
Currency exchange rate contracts(1)	Net investment hedge	6.7		8.0
Foreign currency-denominated debt(2)	Net investment hedge	21.1		20.6
Currency exchange rate contracts	Fair value hedge	—		1.1
Currency exchange rate contracts	Undesignated	4.2		3.9

(1)At January 23, 2026, includes derivative contracts with a notional value of €4.0 billion, or $4.7 billion, designated as hedges of a portion of our net investment in certain European operations and derivative contracts with a notional value of ¥320.8 billion, or $2.0 billion, designated as hedges of a portion of our net investment in certain Japanese operations. These derivative contracts mature in fiscal years 2026 through 2033.

(2)At January 23, 2026, includes €18.0 billion, or $21.1 billion, of outstanding Euro-denominated debt designated as hedges of a portion of our net investment in foreign operations. This debt matures in fiscal years 2027 through 2054.

Gains and Losses on Hedging Instruments and Derivatives not Designated as Hedging Instruments

The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for the three and nine months ended January 23, 2026 and January 24, 2025 were as follows:

	(Gain) Loss Recognized in Accumulated Other Comprehensive Loss								(Gain) Loss Reclassified into Income
	Three months ended				Nine months ended				Three months ended				Nine months ended				Location of (Gain) Loss in Income Statement
(in millions)	January 23, 2026		January 24, 2025		January 23, 2026		January 24, 2025		January 23, 2026		January 24, 2025		January 23, 2026		January 24, 2025
Cash flow hedges
Currency exchange rate contracts	$	8	$	(346)	$	(57)	$	(303)	$	26	$	(49)	$	71	$	(88)	Other operating expense (income), net
Currency exchange rate contracts	9		(55)		19		(55)		(11)		(17)		(50)		(56)		Cost of products sold
Net investment hedges
Foreign currency-denominated debt	192		(684)		517		(525)		—		—		—		—		N/A
Currency exchange rate contracts	(33)		(124)		(148)		(112)		—		—		—		—		N/A
Fair value hedges
Currency exchange rate contracts	—		—		1		(1)		—		38		(20)		42		Other operating expense (income), net
Total	$	176	$	(1,209)	$	331	$	(996)	$	15	$	(28)	$	1	$	(102)

The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three and nine months ended January 23, 2026 and January 24, 2025 were as follows:

	(Gain) Loss Recognized in Income
	Three months ended				Nine months ended				Location of (Gain) Loss in Income Statement
(in millions)	January 23, 2026		January 24, 2025		January 23, 2026		January 24, 2025
Currency exchange rate contracts	$	50	$	65	$	74	$	60	Other operating expense (income), net

Balance Sheet Presentation

The following table summarizes the balance sheet classification and fair value of derivative instruments included in the consolidated balance sheets at January 23, 2026 and April 25, 2025. The fair value amounts of qualified hedging instruments are presented on a gross basis and segregated between designated and not designated as hedging instruments. These hedging instruments are segregated by type of contract.

	Fair Value - Assets					Fair Value - Liabilities
(in millions)	January 23, 2026		April 25, 2025		Balance Sheet Classification	January 23, 2026		April 25, 2025		Balance Sheet Classification
Derivatives designated as hedging instruments
Currency exchange rate contracts	$	175	$	269	Other current assets	$	242	$	200	Other accrued expenses
Currency exchange rate contracts	347		57		Other assets	132		196		Other liabilities
Total derivatives designated as hedging instruments	522		326			374		396
Derivatives not designated as hedging instruments
Currency exchange rate contracts	7		7		Other current assets	14		5		Other accrued expenses
Total return swaps	7		—		Other current assets	—		16		Other accrued expenses
Total derivatives not designated as hedging instruments	14		7			14		21
Total derivatives	$	536	$	334		$	388	$	417

The following table provides information by level for the derivative assets and liabilities that are measured at fair value on a recurring basis.

	January 23, 2026				April 25, 2025
(in millions)	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Level 1	$	529	$	388	$	334	$	401
Level 2	7		—		—		16
Total	$	536	$	388	$	334	$	417

The Company has elected to present the fair value of derivative assets and liabilities within the consolidated balance sheets on a gross basis, even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The cash flows related to collateral posted and received are reported gross as investing and financing activities, respectively, in the consolidated statements of cash flows.

The following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria as stipulated by the terms of the master netting arrangements with each of the counterparties. Derivatives not subject to master netting arrangements are not eligible for net presentation.

	January 23, 2026
			Gross Amount Not Offset on the Balance Sheet
(in millions)	Gross Amount of Recognized Assets (Liabilities)		Financial Instruments		Cash Collateral Posted		Net Amount
Derivative assets:
Currency exchange rate contracts	$	529	$	(204)	$	—	$	326
Total return swaps	7		—		—		7
	536		(204)		—		333
Derivative liabilities:
Currency exchange rate contracts	(388)		204		115		(69)
Total	$	149	$	—	$	115	$	264

	April 25, 2025
			Gross Amount Not Offset on the Balance Sheet
(in millions)	Gross Amount of Recognized Assets (Liabilities)		Financial Instruments		Cash Collateral Posted		Net Amount
Derivative assets:
Currency exchange rate contracts	$	334	$	(195)	$	—	$	139
Derivative liabilities:
Currency exchange rate contracts	(401)		195		125		(82)
Total return swaps	(16)		—		—		(16)
	(417)		195		125		(97)
Total	$	(84)	$	—	$	125	$	42