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SEGMENT REPORTING AND NET SALES
 6 Months Ended
Aug. 03, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING AND NET SALES SEGMENT REPORTING AND NET SALES
Segment Reporting
The Company defines its segments based on how internally reported financial information is regularly reviewed by the chief operating decision maker (“CODM”), our President and Chief Executive Officer, to analyze financial performance, make decisions, and allocate resources.
Primary Segment. We are engaged in retail operations and sell a wide assortment of building materials, home improvement products, lawn and garden products, décor products, and facilities maintenance, repair and operations products both in stores and online. We also provide a number of services, including home improvement installation services, and tool and equipment rental. We currently conduct these operations in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each of which represents an operating segment. For disclosure purposes, we aggregate these three geographic operating segments into one reportable segment (the “Primary segment”) due to the similar nature of their operations and economic characteristics.
Other. As discussed in Note 10, in June 2024, we acquired SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor through its branches located throughout the U.S. SRS is organized as three different lines of business: roofing and complementary building products, landscape, and pool. We have determined that each of these three lines of business represents an operating segment, none of which meets the thresholds prescribed under Topic 280 to be deemed a reportable segment. Therefore, results from our SRS operating segments are presented in “Other” beginning from the acquisition date of June 18, 2024.
Net sales presented in Other in the tables below relate to the sale of products by SRS, with roofing and related products accounting for approximately 62% and 63% of net sales in Other during the three and six months ended August 3, 2025, respectively, and approximately 65% during both the three and six months ended July 28, 2024.
Segment Information. Assets are reviewed by our CODM on a total company consolidated basis and not by segment. The accounting policies of our Primary segment are the same as those described in our summary of significant accounting policies.
The following table presents net sales, significant expenses, and operating income for our Primary segment:
Three Months EndedSix Months Ended
in millionsAugust 3,
2025		July 28,
2024		August 3,
2025		July 28,
2024
Net sales
$42,157 $41,901 $79,444 $78,319 
Cost of sales
27,728 27,766 52,112 51,751 
Selling, general and administrative
7,375 6,980 14,539 13,647 
Depreciation and amortization
700 693 1,393 1,380 
Primary segment operating income
$6,354 $6,462 $11,400 $11,541 
The following tables present a reconciliation of certain Primary segment information to our consolidated totals:
Three Months EndedSix Months Ended
August 3, 2025August 3, 2025
in millions
Primary Segment
Other
Consolidated
Primary Segment
Other
Consolidated
Net sales
$42,157 $3,120 $45,277 $79,444 $5,689 $85,133 
Operating income
6,354 201 6,555 11,400 288 11,688 
Interest income and other, net
(25)(49)
Interest expense
575 1,190 
Earnings before provision for income taxes
$6,005 $10,547 
Depreciation and amortization (1)
$838 $150 $988 $1,669 $297 $1,966 
—————
(1)Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $52 million and $104 million for the three and six months ended August 3, 2025, respectively, in our Primary segment, and intangible asset amortization expense of $87 million and $174 million for the three and six months ended August 3, 2025, respectively, in Other.
Three Months EndedSix Months Ended
July 28, 2024July 28, 2024
in millions
Primary Segment
Other
Consolidated
Primary Segment
Other
Consolidated
Net sales
$41,901 $1,274 $43,175 $78,319 $1,274 $79,593 
Operating income
6,462 72 6,534 11,541 72 11,613 
Interest income and other, net
(84)(141)
Interest expense
573 1,058 
Earnings before provision for income taxes
$6,045 $10,696 
Depreciation and amortization (1)
$834 $67 $901 $1,661 $67 $1,728 
—————
(1)Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $51 million and $103 million for the three and six months ended July 28, 2024, respectively, in our Primary segment, and intangible asset amortization expense of $39 million for both the three and six months ended July 28, 2024 in Other.
Net Sales
The following table presents our Primary segment major product lines and the related merchandising departments (and related services):
Major Product LineMerchandising Departments
Building Materials
Building Materials, Electrical, Lumber, Millwork, and Plumbing
Décor
Appliances, Bath, Flooring, Kitchen & Blinds, Lighting, and Paint
Hardlines
Hardware, Indoor Garden, Outdoor Garden, Power, and Storage & Organization
The following table presents net sales by major product line (and related services) within our Primary segment, as well as Other net sales:
Three Months EndedSix Months Ended
in millionsAugust 3,
2025		July 28,
2024		August 3,
2025		July 28,
2024
Building Materials$14,172 $13,982 $27,103 $26,584 
Décor13,856 13,752 26,335 26,287 
Hardlines14,129 14,167 26,006 25,448 
Primary segment net sales
42,157 41,901 79,444 78,319 
Other net sales (1)
3,120 1,274 5,689 1,274 
Net sales
$45,277 $43,175 $85,133 $79,593 
—————
(1) See above for further discussion of Other net sales.
Note: As disclosed in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2025, we made changes that realigned certain product categories across our merchandising departments and major product lines within our Primary segment. As a result, prior-year amounts have been updated to conform with the current-year presentation. These changes had no impact on our consolidated net sales.
The following table presents net sales, classified by geography:
Three Months EndedSix Months Ended
in millionsAugust 3,
2025		July 28,
2024		August 3,
2025		July 28,
2024
Net sales – in the U.S.
$41,729 $39,513 $78,953 $73,082 
Net sales – outside the U.S.
3,548 3,662 6,180 6,511 
Net sales
$45,277 $43,175 $85,133 $79,593 
The following table presents net sales by products and services:
Three Months EndedSix Months Ended
in millionsAugust 3,
2025		July 28,
2024		August 3,
2025		July 28,
2024
Net sales – products$43,725 $41,605 $82,237 $76,683 
Net sales – services1,552 1,570 2,896 2,910 
Net sales
$45,277 $43,175 $85,133 $79,593 
Deferred Revenue
For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of August 3, 2025 and February 2, 2025, deferred revenue for products and services was $1.6 billion and $1.5 billion, respectively.
We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance. As of August 3, 2025 and February 2, 2025, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, is recognized in net sales and was immaterial during the three and six months ended August 3, 2025 and July 28, 2024.