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SEGMENT REPORTING AND NET SALES
 6 Months Ended
Aug. 02, 2026
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 home improvement products, building materials, 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. Through our SRS distribution operations, we are a leading specialty trade distributor of roofing and building products, interior and construction products, and outdoor living products, which consist of landscape and pool supplies. In the second quarter of fiscal 2026, SRS completed the acquisition of Mingledorff’s (see Note 10), which distributes heating, ventilation, and air conditioning (HVAC) equipment, parts, and supplies. The acquisition of Mingledorff’s resulted in the creation of a new vertical within SRS, and SRS is now organized into five lines of business: 1) roofing and building products, 2) interior and construction products, 3) landscape, 4) pool, and 5) HVAC products. Each of these five 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 these operating segments are presented in “Other.”
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 2,
2026		August 3,
2025		August 2,
2026		August 3,
2025
Net sales
$42,806 $42,157 $80,569 $79,444 
Cost of sales
27,750 27,728 52,495 52,112 
Selling, general and administrative
7,766 7,375 15,124 14,539 
Depreciation and amortization
698 700 1,393 1,393 
Operating income
$6,592 $6,354 $11,557 $11,400 
The following tables present a reconciliation of certain segment information to our consolidated totals:
Three Months EndedSix Months Ended
August 2, 2026August 2, 2026
in millions
Primary
Other (1)
Consolidated
Primary
Other (1)
Consolidated
Net sales
$42,806 $5,055 $47,861 $80,569 $9,057 $89,626 
Operating income
6,592 247 6,839 11,557 263 11,820 
Interest income and other, net
(59)(66)
Interest expense
583 1,194 
Earnings before provision for income taxes
$6,315 $10,692 
Depreciation and amortization (2)
$859 $236 $1,095 $1,699 $462 $2,161 
—————    
(1)    Net sales presented in Other relate to the sale of products within our SRS non-reportable operating segments, including the HVAC products operating segment beginning in the second quarter of fiscal 2026 upon the acquisition of Mingledorff’s, as well as the interior and construction products operating segment beginning in the third quarter of fiscal 2025 upon the acquisition of GMS. Operating income presented in Other includes cost of sales and operating expenses totaling $4.8 billion and $8.8 billion for the three and six months ended August 2, 2026, respectively, within these SRS non-reportable operating segments.
(2)    Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $53 million and $105 million for the three and six months ended August 2, 2026, respectively, in our Primary segment, and intangible asset amortization expense of $125 million and $244 million for the three and six months ended August 2, 2026, respectively, in Other.
Three Months EndedSix Months Ended
August 3, 2025August 3, 2025
in millions
Primary
Other (1)
Consolidated
Primary
Other (1)
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 (2)
$838 $150 $988 $1,669 $297 $1,966 
—————    
(1)    Net sales presented in Other relate to the sale of products within our SRS non-reportable operating segments. Operating income presented in Other includes cost of sales and operating expenses totaling $2.9 billion and $5.4 billion for the three and six months ended August 3, 2025, respectively, within these SRS non-reportable operating segments.
(2)    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.
Net Sales
The following table presents our Primary segment major product lines and the related merchandising departments (and related services):
Major Product Line
Merchandising 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 2,
2026		August 3,
2025		August 2,
2026		August 3,
2025
Building Materials$14,432 $14,225 $27,403 $27,197 
Décor13,929 13,805 26,534 26,250 
Hardlines14,445 14,127 26,632 25,997 
Primary segment net sales
42,806 42,157 80,569 79,444 
Other net sales (1)
5,055 3,120 9,057 5,689 
Net sales
$47,861 $45,277 $89,626 $85,133 
—————
Note: Certain product category changes within our Primary segment in the current year have resulted in prior year amounts being reclassified to conform with the current-year presentation. These changes had no impact on consolidated net sales.
(1)    Other net sales relate to the sale of products within our SRS non-reportable operating segments. Roofing and related products accounted for approximately 39% of Other net sales for both the three and six months ended August 2, 2026, and approximately 62% and 63% for the three and six months ended August 3, 2025, respectively.
The following table presents net sales, classified by geography:
Three Months EndedSix Months Ended
in millionsAugust 2,
2026		August 3,
2025		August 2,
2026		August 3,
2025
Net sales – in the U.S.
$43,907 $41,729 $82,640 $78,953 
Net sales – outside the U.S.
3,954 3,548 6,986 6,180 
Net sales
$47,861 $45,277 $89,626 $85,133 
The following table presents net sales by products and services:
Three Months EndedSix Months Ended
in millionsAugust 2,
2026		August 3,
2025		August 2,
2026		August 3,
2025
Net sales – products
$46,300 $43,725 $86,736 $82,237 
Net sales – services
1,561 1,552 2,890 2,896 
Net sales
$47,861 $45,277 $89,626 $85,133 
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 2, 2026 and February 1, 2026, deferred revenue for products and services was $1.7 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 2, 2026 and February 1, 2026, 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 for the three and six months ended August 2, 2026 and August 3, 2025.