v3.25.2
LEASES
 12 Months Ended
Aug. 02, 2025
Leases [Abstract]  
LEASES
NOTE 11—LEASES

The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities, net, are as follows (in millions):
Lease Type
Consolidated Balance Sheets Location
August 2, 2025August 3, 2024
Operating lease assetsOperating lease assets$1,474 $1,370 
Finance lease assetsProperty and equipment, net15 16 
Total lease assets$1,489 $1,386 
Operating liabilitiesCurrent portion of operating lease liabilities$173 $181 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities5 7 
Operating liabilitiesLong-term operating lease liabilities1,400 1,263 
Finance liabilitiesLong-term finance lease liabilities11 12 
Total lease liabilities$1,589 $1,463 
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202520242023
Operating lease costOperating expenses$316 $298 $261 
Short-term lease costOperating expenses6 10 17 
Variable lease costOperating expenses94 87 73 
Sublease incomeOperating expenses(4)(5)(8)
Sublease incomeNet sales(7)(10)(14)
Other sublease income, net
Restructuring, acquisition and integration related expenses(1)
6 — (1)
Net operating lease cost411 380 328 
Amortization of leased assetsOperating expenses6 6 7 
Interest on lease liabilitiesInterest expense, net2 2 3 
Finance lease cost8 8 10 
Total net lease cost$419 $388 $338 
(1)Includes $32 million, $28 million and $27 million of lease expense in fiscal 2025, 2024 and 2023, respectively, and $(26) million, $(28) million, and $(28) million of lease income in fiscal 2025, 2024 and 2023, respectively, that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $24 million non-cash asset impairment charge related to our Allentown, Pennsylvania distribution center during the third quarter of fiscal 2025, of which $13 million related to operating lease assets. The impairment charge is recorded within Loss on sale of assets and other asset charges in the Consolidated Statements of Operations.

During fiscal 2025, the Company entered into a lease agreement for a new distribution center in Sarasota, Florida. We recognized a $118 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the first quarter of fiscal 2025.

During fiscal 2023, the Company entered into a lease agreement for a new distribution center in Manchester, Pennsylvania. We recognized a $205 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the second quarter of fiscal 2024.
The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of August 2, 2025, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
Lease LiabilitiesLease ReceiptsNet Lease Obligations
Fiscal Year
Operating Leases(1)
Finance Leases (2)
Operating LeasesFinance LeasesOperating LeasesFinance Leases
2026$311 $6 $(31)$— $280 $6 
2027254 4 (23)— 231 4 
2028259 3 (20)— 239 3 
2029227 3 (15)— 212 3 
2030223 2 (12)— 211 2 
Thereafter1,258 2 (25)— 1,233 2 
Total undiscounted lease liabilities and receipts$2,532 $20 $(126)$— $2,406 $20 
Less interest(3)
(959)(4)
Present value of lease liabilities1,573 16 
Less current lease liabilities(173)(5)
Long-term lease liabilities$1,400 $11 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(2)There were no finance leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(3)Calculated using the interest rate for each lease.

The following tables provide other information required by ASC 842:
Lease Term and Discount RateAugust 2, 2025August 3, 2024
Weighted-average remaining lease term (years)
Operating leases9.9 years9.9 years
Finance leases4.6 years4.1 years
Weighted-average discount rate
Operating leases9.6 %9.4 %
Finance leases9.6 %9.9 %

Other Information
(in millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$311 $284 $249 
Operating cash flows from finance leases
$2 $2 $2 
Financing cash flows from finance leases
$7 $12 $10 
Leased assets obtained in exchange for new finance lease liabilities$5 $8 $— 
Leased assets obtained in exchange for new operating lease liabilities$321 $361 $237 
LEASES
NOTE 11—LEASES

The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities, net, are as follows (in millions):
Lease Type
Consolidated Balance Sheets Location
August 2, 2025August 3, 2024
Operating lease assetsOperating lease assets$1,474 $1,370 
Finance lease assetsProperty and equipment, net15 16 
Total lease assets$1,489 $1,386 
Operating liabilitiesCurrent portion of operating lease liabilities$173 $181 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities5 7 
Operating liabilitiesLong-term operating lease liabilities1,400 1,263 
Finance liabilitiesLong-term finance lease liabilities11 12 
Total lease liabilities$1,589 $1,463 
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202520242023
Operating lease costOperating expenses$316 $298 $261 
Short-term lease costOperating expenses6 10 17 
Variable lease costOperating expenses94 87 73 
Sublease incomeOperating expenses(4)(5)(8)
Sublease incomeNet sales(7)(10)(14)
Other sublease income, net
Restructuring, acquisition and integration related expenses(1)
6 — (1)
Net operating lease cost411 380 328 
Amortization of leased assetsOperating expenses6 6 7 
Interest on lease liabilitiesInterest expense, net2 2 3 
Finance lease cost8 8 10 
Total net lease cost$419 $388 $338 
(1)Includes $32 million, $28 million and $27 million of lease expense in fiscal 2025, 2024 and 2023, respectively, and $(26) million, $(28) million, and $(28) million of lease income in fiscal 2025, 2024 and 2023, respectively, that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $24 million non-cash asset impairment charge related to our Allentown, Pennsylvania distribution center during the third quarter of fiscal 2025, of which $13 million related to operating lease assets. The impairment charge is recorded within Loss on sale of assets and other asset charges in the Consolidated Statements of Operations.

During fiscal 2025, the Company entered into a lease agreement for a new distribution center in Sarasota, Florida. We recognized a $118 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the first quarter of fiscal 2025.

During fiscal 2023, the Company entered into a lease agreement for a new distribution center in Manchester, Pennsylvania. We recognized a $205 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the second quarter of fiscal 2024.
The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of August 2, 2025, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
Lease LiabilitiesLease ReceiptsNet Lease Obligations
Fiscal Year
Operating Leases(1)
Finance Leases (2)
Operating LeasesFinance LeasesOperating LeasesFinance Leases
2026$311 $6 $(31)$— $280 $6 
2027254 4 (23)— 231 4 
2028259 3 (20)— 239 3 
2029227 3 (15)— 212 3 
2030223 2 (12)— 211 2 
Thereafter1,258 2 (25)— 1,233 2 
Total undiscounted lease liabilities and receipts$2,532 $20 $(126)$— $2,406 $20 
Less interest(3)
(959)(4)
Present value of lease liabilities1,573 16 
Less current lease liabilities(173)(5)
Long-term lease liabilities$1,400 $11 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(2)There were no finance leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(3)Calculated using the interest rate for each lease.

The following tables provide other information required by ASC 842:
Lease Term and Discount RateAugust 2, 2025August 3, 2024
Weighted-average remaining lease term (years)
Operating leases9.9 years9.9 years
Finance leases4.6 years4.1 years
Weighted-average discount rate
Operating leases9.6 %9.4 %
Finance leases9.6 %9.9 %

Other Information
(in millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$311 $284 $249 
Operating cash flows from finance leases
$2 $2 $2 
Financing cash flows from finance leases
$7 $12 $10 
Leased assets obtained in exchange for new finance lease liabilities$5 $8 $— 
Leased assets obtained in exchange for new operating lease liabilities$321 $361 $237 
LEASES
NOTE 11—LEASES

The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities, net, are as follows (in millions):
Lease Type
Consolidated Balance Sheets Location
August 2, 2025August 3, 2024
Operating lease assetsOperating lease assets$1,474 $1,370 
Finance lease assetsProperty and equipment, net15 16 
Total lease assets$1,489 $1,386 
Operating liabilitiesCurrent portion of operating lease liabilities$173 $181 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities5 7 
Operating liabilitiesLong-term operating lease liabilities1,400 1,263 
Finance liabilitiesLong-term finance lease liabilities11 12 
Total lease liabilities$1,589 $1,463 
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202520242023
Operating lease costOperating expenses$316 $298 $261 
Short-term lease costOperating expenses6 10 17 
Variable lease costOperating expenses94 87 73 
Sublease incomeOperating expenses(4)(5)(8)
Sublease incomeNet sales(7)(10)(14)
Other sublease income, net
Restructuring, acquisition and integration related expenses(1)
6 — (1)
Net operating lease cost411 380 328 
Amortization of leased assetsOperating expenses6 6 7 
Interest on lease liabilitiesInterest expense, net2 2 3 
Finance lease cost8 8 10 
Total net lease cost$419 $388 $338 
(1)Includes $32 million, $28 million and $27 million of lease expense in fiscal 2025, 2024 and 2023, respectively, and $(26) million, $(28) million, and $(28) million of lease income in fiscal 2025, 2024 and 2023, respectively, that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $24 million non-cash asset impairment charge related to our Allentown, Pennsylvania distribution center during the third quarter of fiscal 2025, of which $13 million related to operating lease assets. The impairment charge is recorded within Loss on sale of assets and other asset charges in the Consolidated Statements of Operations.

During fiscal 2025, the Company entered into a lease agreement for a new distribution center in Sarasota, Florida. We recognized a $118 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the first quarter of fiscal 2025.

During fiscal 2023, the Company entered into a lease agreement for a new distribution center in Manchester, Pennsylvania. We recognized a $205 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the second quarter of fiscal 2024.
The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of August 2, 2025, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
Lease LiabilitiesLease ReceiptsNet Lease Obligations
Fiscal Year
Operating Leases(1)
Finance Leases (2)
Operating LeasesFinance LeasesOperating LeasesFinance Leases
2026$311 $6 $(31)$— $280 $6 
2027254 4 (23)— 231 4 
2028259 3 (20)— 239 3 
2029227 3 (15)— 212 3 
2030223 2 (12)— 211 2 
Thereafter1,258 2 (25)— 1,233 2 
Total undiscounted lease liabilities and receipts$2,532 $20 $(126)$— $2,406 $20 
Less interest(3)
(959)(4)
Present value of lease liabilities1,573 16 
Less current lease liabilities(173)(5)
Long-term lease liabilities$1,400 $11 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(2)There were no finance leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(3)Calculated using the interest rate for each lease.

The following tables provide other information required by ASC 842:
Lease Term and Discount RateAugust 2, 2025August 3, 2024
Weighted-average remaining lease term (years)
Operating leases9.9 years9.9 years
Finance leases4.6 years4.1 years
Weighted-average discount rate
Operating leases9.6 %9.4 %
Finance leases9.6 %9.9 %

Other Information
(in millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$311 $284 $249 
Operating cash flows from finance leases
$2 $2 $2 
Financing cash flows from finance leases
$7 $12 $10 
Leased assets obtained in exchange for new finance lease liabilities$5 $8 $— 
Leased assets obtained in exchange for new operating lease liabilities$321 $361 $237