v3.26.1
Segment Reporting
 6 Months Ended
Aug. 01, 2026
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company is managed at the consolidated level and therefore operates and reports as a single segment. The Company’s Chief Executive Officer is its Chief Operating Decision Maker (“CODM”), and the measure of profitability included in the financial information regularly provided to the CODM is total Company Adjusted Operating Income, or Operating Income in periods where there are no adjustments. The Company’s CODM assesses Adjusted Operating Income performance in comparison to forecasts and historical results to make decisions on the reinvestment of profits into the business and capital allocation strategies.
The following table illustrates significant segment expenses that were regularly provided to the CODM for the second quarters of and year-to-date 2026 and 2025:
Second QuarterYear-to-Date
2026202520262025
(in millions)
Net Sales$1,514 $1,549 $2,892 $2,974 
Adjusted Cost of Goods Sold(541)(631)(1,062)(1,140)
Buying and Occupancy(281)(278)(550)(547)
Adjusted Selling Expenses (274)(282)(530)(538)
Adjusted Marketing Expenses (66)(53)(117)(103)
Adjusted General and Administrative Expenses(127)(133)(257)(264)
Adjusted Operating Income225 172 376 382 
Interchange Fee Settlements (a)— — 88 — 
Business Transformation Activities (b)(9)— (17)— 
Leadership Transition Costs (c)— (15)— (15)
Reported Operating Income$216 $157 $447 $367 
 ________________
(a)In year-to-date 2026, the Company received $88 million, net of legal fees, related to favorable settlements of payment card interchange fee litigation. The gain was recognized as a reduction to Selling Expenses and was excluded from the Adjusted Operating Income details provided to the CODM.
(b)In the second quarter of 2026, the Company recognized aggregate pre-tax costs of $9 million, resulting from business transformation activities in connection with the Consumer First Formula, of which $5 million and $4 million were excluded from Marketing Expenses and General and Administrative Expenses, respectively, in the Adjusted Operating Income details provided to the CODM. During year-to-date 2026, the Company recognized aggregate pre-tax costs of $17 million, resulting from business transformation activities in connection with the Consumer First Formula, of which $1 million, $7 million and $9 million, were excluded from the Cost of Goods Sold, Marketing Expenses and General and Administrative Expenses, respectively, in the Adjusted Operating Income details provided to the CODM.
(c)In the second quarter of and year-to-date 2025, the Company recognized pre-tax costs of $15 million due to the transition of certain members of the leadership team, primarily related to severance benefits, which were excluded from General and Administrative Expenses in the Adjusted Operating Income details provided to the CODM.
As a single reportable segment entity, the other disclosures required by ASC 280, Segment Reporting, can be found in the Company’s Consolidated Financial Statements and the Notes thereto, including the Company’s measure of segment assets, which is total consolidated assets.