Basic net income per share is net income divided by the average number of common shares outstanding during the period. Diluted net income per share includes incremental shares assumed for share-based awards and stock warrants. The potentially dilutive shares outstanding during the period include unvested restricted stock units, unvested restricted stock awards, and warrants, which utilize the treasury stock method, as well as unvested performance share units that utilize the contingently issuable share method. Potentially dilutive shares are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive.

The information required to compute basic and diluted net income per share is as follows:


	Three Months Ended		Six Months Ended
(Dollars and Shares in Millions, Except per Share Data)	August 1, 2026	August 2, 2025	August 1, 2026	August 2, 2025
Numerator—Net income	$151	$153	$137	$139
Denominator—Weighted-average shares:
Basic	113	112	113	112
Dilutive impact	5	2	4	1
Diluted	118	114	117	113
Net Income per share:
Basic	$1.34	$1.37	$1.22	$1.24
Diluted	$1.28	$1.35	$1.18	$1.23

The following potential shares of common stock were excluded from the diluted net income per share calculation because their effect would have been anti-dilutive:


	Three Months Ended		Six Months Ended
(Shares in Millions)	August 1, 2026	August 2, 2025	August 1, 2026	August 2, 2025
Anti-dilutive shares	1	5	4	6