Revenue and segment information

3 Months Ended

Oct. 31, 2024

Segment Reporting [Abstract]

Revenue and segment information

Revenue and segment information

The Company reports its financial results of operations on a geographical basis in the following two reportable segments: United States and Canada. Each segment generally derives its revenues in the same manner. The Company uses adjusted operating profit as its measure of segment profit. A reporting segment’s adjusted operating profit is defined as profit before tax, excluding central and other costs, restructuring costs, amortization of acquired intangible assets, net interest expenses, as well as other items typically recorded in net other (expense) income such as (loss)/gain on disposal of businesses, pension plan changes/closure costs and amounts recorded in connection with the Company’s interests in investees. Certain income and expenses are not allocated to the Company’s segments and, thus, the information that management uses to make operating decisions and assess performance does not reflect such amounts.

Segment results were as follows:

	Three months ended
	October 31,
(In millions)	2024	2023
Net sales:
United States	$7,369	$7,329
Canada	403	379
Total net sales	$7,772	$7,708
Adjusted operating profit:
United States	$697	$766
Canada	23	23
Central and other costs	(14)	(16)
Corporate restructurings(1)	(3)	—
Amortization of acquired intangible assets	(38)	(34)
Interest expense, net	(46)	(45)
Other income (expense), net	5	(3)
Income before income taxes	$624	$691

(1)For the three months ended October 31, 2024, corporate restructurings primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.

Our products are delivered through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable, collection of consideration is probable and the Company has satisfied its performance obligation per the sales arrangement. The majority of the Company’s revenue originates from sales arrangements with a single performance obligation to deliver products, whereby the performance obligations are satisfied when control of the product is transferred to the customer which is the point the product is delivered to, or collected by, the customer.

The Company determined that disaggregating net sales by end market at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows may be impacted by economic factors. The disaggregated net sales by end market are as follows:

	Three months ended
	October 31,
(In millions)	2024	2023
United States:
Residential	$3,747	$3,740
Non-residential:
Commercial	2,465	2,470
Civil/Infrastructure	650	633
Industrial	507	486
Total Non-residential	3,622	3,589
Total United States	7,369	7,329
Canada	403	379
Total net sales	$7,772	$7,708

No sales to an individual customer accounted for more than 10% of net sales during any of the periods presented.

The Company is a value-added distributor in North America, providing a wide range of products from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. We offer a broad line of products, and items are regularly added to and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered.