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SEGMENT REPORTING AND NET SALES
 9 Months Ended
Nov. 02, 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 branches located throughout the U.S. On September 4, 2025, SRS completed the acquisition of GMS, a leading distributor of specialty building products, including drywall, ceilings, steel framing and other complementary construction products, through branches located across the U.S. and Canada. GMS became an additional vertical within SRS referred to as interior and construction products, and SRS is now organized as four different lines of business: roofing and building products, interior and construction products, landscape, and pool. We have determined that each of these four lines of business represents an operating segment, none of which meets the thresholds prescribed under Accounting Standards Codification Topic 280: “Segment Reporting” to be deemed a reportable segment. Therefore, results from these operating segments are presented in “Other.”
Net sales presented in Other in the tables below relate to the sale of products within these non-reportable operating segments, including our recently acquired interior and construction products operating segment beginning in the third quarter of fiscal 2025. Roofing and related products accounted for approximately 50% and 57% of net sales in Other during the three and nine months ended November 2, 2025, respectively, and approximately 68% and 67% during the three and nine months ended October 27, 2024, respectively.
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 EndedNine Months Ended
in millionsNovember 2,
2025		October 27,
2024		November 2,
2025		October 27,
2024
Net sales
$37,462 $37,289 $116,906 $115,608 
Cost of sales
24,443 24,532 76,555 76,283 
Selling, general and administrative
7,134 6,846 21,673 20,493 
Depreciation and amortization
697 693 2,090 2,073 
Operating income
$5,188 $5,218 $16,588 $16,759 
The following tables present a reconciliation of certain segment information to our consolidated totals:
Three Months EndedNine Months Ended
November 2, 2025November 2, 2025
in millions
Primary
Other
Consolidated
Primary
Other
Consolidated
Net sales
$37,462 $3,890 $41,352 $116,906 $9,579 $126,485 
Operating income
5,188 165 5,353 16,588 453 17,041 
Interest income and other, net
(32)(81)
Interest expense
628 1,818 
Earnings before provision for income taxes
$4,757 $15,304 
Depreciation and amortization (1)
$835 $195 $1,030 $2,504 $492 $2,996 
—————
(1)    Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $52 million and $156 million for the three and nine months ended November 2, 2025, respectively, in our Primary segment, and intangible asset amortization expense of $106 million and $280 million for the three and nine months ended November 2, 2025, respectively, in Other.
Three Months EndedNine Months Ended
October 27, 2024October 27, 2024
in millions
Primary
Other
Consolidated
Primary
Other
Consolidated
Net sales
$37,289 $2,928 $40,217 $115,608 $4,202 $119,810 
Operating income
5,218 200 5,418 16,759 272 17,031 
Interest income and other, net
(30)(171)
Interest expense
625 1,683 
Earnings before provision for income taxes
$4,823 $15,519 
Depreciation and amortization (1)
$839 $140 $979 $2,500 $207 $2,707 
—————
(1)    Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $52 million and $155 million for the three and nine months ended October 27, 2024, respectively, in our Primary segment, and intangible asset amortization expense of $86 million and $125 million for the three and nine months ended October 27, 2024, respectively, 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 EndedNine Months Ended
in millionsNovember 2,
2025		October 27,
2024		November 2,
2025		October 27,
2024
Building Materials$13,596 $13,531 $40,699 $40,115 
Décor12,938 12,831 39,273 39,118 
Hardlines10,928 10,927 36,934 36,375 
Primary segment net sales
37,462 37,289 116,906 115,608 
Other net sales (1)
3,890 2,928 9,579 4,202 
Net sales
$41,352 $40,217 $126,485 $119,810 
—————
(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 EndedNine Months Ended
in millionsNovember 2,
2025		October 27,
2024		November 2,
2025		October 27,
2024
Net sales – in the U.S.
$38,126 $37,135 $117,079 $110,217 
Net sales – outside the U.S.
3,226 3,082 9,406 9,593 
Net sales
$41,352 $40,217 $126,485 $119,810 
The following table presents net sales by products and services:
Three Months EndedNine Months Ended
in millionsNovember 2,
2025		October 27,
2024		November 2,
2025		October 27,
2024
Net sales – products$39,874 $38,692 $122,111 $115,375 
Net sales – services1,478 1,525 4,374 4,435 
Net sales
$41,352 $40,217 $126,485 $119,810 
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 both November 2, 2025 and February 2, 2025, deferred revenue for products and services was $1.5 billion.
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 November 2, 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 nine months ended November 2, 2025 and October 27, 2024.