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Restructuring
 12 Months Ended
Feb. 03, 2024
Restructuring [Abstract]  
Restructuring 3.   Restructuring

 

Restructuring charges were as follows ($ in millions):

2024

2023

2022

Fiscal 2024 Restructuring Initiative

$

171 

$

-

$

-

Fiscal 2023 Resource Optimization Initiative

(18)

145 

-

Mexico Exit and Strategic Realignment(1)

-

2 

(41)

Fiscal 2020 U.S. Retail Operating Model Changes

-

-

1 

Total

$

153 

$

147 

$

(40)

(1)Includes ($6) million related to inventory markdowns recorded in Cost of sales on our Consolidated Statements of Earnings in fiscal 2022.

Fiscal 2024 Restructuring Initiative

During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to accomplish the following: (1) align field labor resources with where customers want to shop to optimize the customer experience; (2) redirect corporate resources for better alignment with our strategy; and (3) right-size resources to better align with our revenue outlook for fiscal 2025.

All charges incurred related to this plan were comprised of employee termination benefits from continuing operations, including $163 million and $8 million within our Domestic and International segments, respectively, and were presented within Restructuring charges on our Consolidated Statements of Earnings. We currently expect to incur additional charges in fiscal 2025, primarily within our Domestic segment, of approximately $10 million to $30 million related to this plan.

There were no cash payments related to this plan during fiscal 2024 and our termination benefits liability as of February 3, 2024, was $171 million, comprised of $163 million in our Domestic segment and $8 million in our International segment. We expect to pay up to $135 million of employee termination benefits during fiscal 2025, with the remainder being paid in fiscal 2026.

Fiscal 2023 Resource Optimization Initiative

During the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure. We do not expect to incur material future restructuring charges related to this plan.

All charges incurred related to this plan were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Consolidated Statements of Earnings as follows ($ in millions):

2024

2023

Cumulative Amount as of
‎February 3, 2024

Domestic

$

(16)

$

140 

$

124 

International

(2)

5 

3 

Total

$

(18)

$

145 

$

127 


‎

Restructuring accrual activity related to this plan was as follows ($ in millions):

Domestic

International

Total

Balances as of January 29, 2022

$

-

$

-

$

-

Charges

145 

5 

150 

Cash payments

(38)

-

(38)

Adjustments(1)

(5)

-

(5)

Balances as of January 28, 2023

102 

5 

107 

Cash payments

(70)

(3)

(73)

Adjustments(1)

(16)

(2)

(18)

Balances as of February 3, 2024

$

16 

$

-

$

16 

(1)Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes.

Mexico Exit and Strategic Realignment

In the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico and began taking other actions to more broadly align our organizational structure in support of our strategy. Charges incurred in our International segment primarily related to our decision to exit our operations in Mexico. All of our former stores in Mexico were closed as of the end of the first quarter of fiscal 2022. Charges incurred in our Domestic segment primarily related to actions taken to align our organizational structure in support of our strategy. We do not expect to incur material future restructuring charges related to this initiative and no material liability remains as of February 3, 2024.

All charges incurred related to this plan were from continuing operations and presented as follows ($ in millions):

Statement of

2022

Cumulative Amount as of
‎February 3, 2024

Earnings Location

Domestic

International

Total

Domestic

International

Total

Inventory markdowns

Cost of sales

$

-

$

(6)

$

(6)

$

-

$

17 

$

17 

Asset impairments(1)

Restructuring charges

-

6 

6 

10 

63 

73 

Termination benefits

Restructuring charges

(40)

(1)

(41)

83 

20 

103 

Currency translation adjustment

Restructuring charges

-

-

-

-

39 

39 

Other(2)

Restructuring charges

-

-

-

-

6 

6 

$

(40)

$

(1)

$

(41)

$

93 

$

145 

$

238 

(1)Remaining net carrying value of asset impairments approximates fair value and was immaterial as of February 3, 2024.

(2)Other charges are primarily comprised of contract termination costs.

No material restructuring accrual activity occurred in fiscal 2024 or fiscal 2023 related to this plan.