v3.26.1
LEASES
 12 Months Ended
Aug. 01, 2026
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 1, 2026August 2, 2025
Operating lease assetsOperating lease assets$1,334 $1,474 
Finance lease assetsProperty and equipment, net12 15 
Total lease assets$1,346 $1,489 
Operating liabilitiesCurrent portion of operating lease liabilities$143 $173 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities3 5 
Operating liabilitiesLong-term operating lease liabilities1,316 1,400 
Finance liabilitiesLong-term finance lease liabilities10 11 
Total lease liabilities$1,472 $1,589 

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.
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202620252024
Operating lease costOperating expenses$280 $316 $298 
Short-term lease costOperating expenses6 6 10 
Variable lease costOperating expenses92 94 87 
Sublease incomeOperating expenses(2)(4)(5)
Sublease incomeNet sales(7)(7)(10)
Other operating lease cost, net(1)
Restructuring, acquisition and integration related expenses20 6 — 
Net operating lease cost389 411 380 
Amortization of leased assetsOperating expenses4 6 6 
Interest on lease liabilitiesInterest expense, net1 2 2 
Finance lease cost5 8 8 
Total net lease cost$394 $419 $388 
(1)Includes $44 million, $32 million and $28 million of lease expense in fiscal 2026, 2025 and 2024, respectively, and $(24) million, $(26) million, and $(28) million of lease income in fiscal 2026, 2025 and 2024, 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.

In fiscal 2026, the Company recorded $24 million of non-cash asset impairment charges related to decisions to close certain leased retail store locations, of which $20 million related to operating lease assets. Additionally, the Company recorded $6 million of non-cash asset impairment charges related to decisions to discontinue operations at certain leased distribution centers, warehouses or offsite storage facilities as the Company continues to optimize its distribution center network. The fair value utilized in the Company’s impairment analyses was determined based on the income approach, and the impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

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 (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $15 million non-cash impairment charge related to the decision to close certain leased and owned distribution center locations during the fourth quarter of fiscal 2024, of which $9 million related to operating lease assets. Additionally, the Company recorded a $7 million non-cash asset impairment charge related to the decision to close certain retail store locations during the third quarter of fiscal 2024, of which $3 million related to operating lease assets. The impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.
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 1, 2026, 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
2027$274 $4 $(26)$— $248 $4 
2028272 3 (23)— 249 3 
2029228 3 (19)— 209 3 
2030236 3 (16)— 220 3 
2031193 2 (10)— 183 2 
Thereafter1,094 1 (22)— 1,072 1 
Total undiscounted lease liabilities and receipts$2,297 $16 $(116)$— $2,181 $16 
Less interest(3)
(838)(3)
Present value of lease liabilities1,459 13 
Less current lease liabilities(143)(3)
Long-term lease liabilities$1,316 $10 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised. Excludes $2 million of 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 1, 2026August 2, 2025
Weighted-average remaining lease term (years)
Operating leases9.5 years9.9 years
Finance leases4.6 years4.6 years
Weighted-average discount rate
Operating leases9.7 %9.6 %
Finance leases9.4 %9.6 %

Other Information
(in millions)202620252024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$292 $311 $284 
Operating cash flows from finance leases
$1 $2 $2 
Financing cash flows from finance leases
$4 $7 $12 
Leased assets obtained in exchange for new finance lease liabilities$2 $5 $8 
Leased assets obtained in exchange for new operating lease liabilities$60 $321 $361 
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 1, 2026August 2, 2025
Operating lease assetsOperating lease assets$1,334 $1,474 
Finance lease assetsProperty and equipment, net12 15 
Total lease assets$1,346 $1,489 
Operating liabilitiesCurrent portion of operating lease liabilities$143 $173 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities3 5 
Operating liabilitiesLong-term operating lease liabilities1,316 1,400 
Finance liabilitiesLong-term finance lease liabilities10 11 
Total lease liabilities$1,472 $1,589 

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.
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202620252024
Operating lease costOperating expenses$280 $316 $298 
Short-term lease costOperating expenses6 6 10 
Variable lease costOperating expenses92 94 87 
Sublease incomeOperating expenses(2)(4)(5)
Sublease incomeNet sales(7)(7)(10)
Other operating lease cost, net(1)
Restructuring, acquisition and integration related expenses20 6 — 
Net operating lease cost389 411 380 
Amortization of leased assetsOperating expenses4 6 6 
Interest on lease liabilitiesInterest expense, net1 2 2 
Finance lease cost5 8 8 
Total net lease cost$394 $419 $388 
(1)Includes $44 million, $32 million and $28 million of lease expense in fiscal 2026, 2025 and 2024, respectively, and $(24) million, $(26) million, and $(28) million of lease income in fiscal 2026, 2025 and 2024, 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.

In fiscal 2026, the Company recorded $24 million of non-cash asset impairment charges related to decisions to close certain leased retail store locations, of which $20 million related to operating lease assets. Additionally, the Company recorded $6 million of non-cash asset impairment charges related to decisions to discontinue operations at certain leased distribution centers, warehouses or offsite storage facilities as the Company continues to optimize its distribution center network. The fair value utilized in the Company’s impairment analyses was determined based on the income approach, and the impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

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 (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $15 million non-cash impairment charge related to the decision to close certain leased and owned distribution center locations during the fourth quarter of fiscal 2024, of which $9 million related to operating lease assets. Additionally, the Company recorded a $7 million non-cash asset impairment charge related to the decision to close certain retail store locations during the third quarter of fiscal 2024, of which $3 million related to operating lease assets. The impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.
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 1, 2026, 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
2027$274 $4 $(26)$— $248 $4 
2028272 3 (23)— 249 3 
2029228 3 (19)— 209 3 
2030236 3 (16)— 220 3 
2031193 2 (10)— 183 2 
Thereafter1,094 1 (22)— 1,072 1 
Total undiscounted lease liabilities and receipts$2,297 $16 $(116)$— $2,181 $16 
Less interest(3)
(838)(3)
Present value of lease liabilities1,459 13 
Less current lease liabilities(143)(3)
Long-term lease liabilities$1,316 $10 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised. Excludes $2 million of 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 1, 2026August 2, 2025
Weighted-average remaining lease term (years)
Operating leases9.5 years9.9 years
Finance leases4.6 years4.6 years
Weighted-average discount rate
Operating leases9.7 %9.6 %
Finance leases9.4 %9.6 %

Other Information
(in millions)202620252024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$292 $311 $284 
Operating cash flows from finance leases
$1 $2 $2 
Financing cash flows from finance leases
$4 $7 $12 
Leased assets obtained in exchange for new finance lease liabilities$2 $5 $8 
Leased assets obtained in exchange for new operating lease liabilities$60 $321 $361 
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 1, 2026August 2, 2025
Operating lease assetsOperating lease assets$1,334 $1,474 
Finance lease assetsProperty and equipment, net12 15 
Total lease assets$1,346 $1,489 
Operating liabilitiesCurrent portion of operating lease liabilities$143 $173 
Finance liabilitiesCurrent portion of long-term debt and finance lease liabilities3 5 
Operating liabilitiesLong-term operating lease liabilities1,316 1,400 
Finance liabilitiesLong-term finance lease liabilities10 11 
Total lease liabilities$1,472 $1,589 

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.
The Company’s lease cost under ASC 842 is as follows (in millions):
Lease Expense Type
Consolidated Statements of Operations Location
202620252024
Operating lease costOperating expenses$280 $316 $298 
Short-term lease costOperating expenses6 6 10 
Variable lease costOperating expenses92 94 87 
Sublease incomeOperating expenses(2)(4)(5)
Sublease incomeNet sales(7)(7)(10)
Other operating lease cost, net(1)
Restructuring, acquisition and integration related expenses20 6 — 
Net operating lease cost389 411 380 
Amortization of leased assetsOperating expenses4 6 6 
Interest on lease liabilitiesInterest expense, net1 2 2 
Finance lease cost5 8 8 
Total net lease cost$394 $419 $388 
(1)Includes $44 million, $32 million and $28 million of lease expense in fiscal 2026, 2025 and 2024, respectively, and $(24) million, $(26) million, and $(28) million of lease income in fiscal 2026, 2025 and 2024, 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.

In fiscal 2026, the Company recorded $24 million of non-cash asset impairment charges related to decisions to close certain leased retail store locations, of which $20 million related to operating lease assets. Additionally, the Company recorded $6 million of non-cash asset impairment charges related to decisions to discontinue operations at certain leased distribution centers, warehouses or offsite storage facilities as the Company continues to optimize its distribution center network. The fair value utilized in the Company’s impairment analyses was determined based on the income approach, and the impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

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 (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.

As discussed in Note 5—Property and Equipment, Net, the Company recorded a $15 million non-cash impairment charge related to the decision to close certain leased and owned distribution center locations during the fourth quarter of fiscal 2024, of which $9 million related to operating lease assets. Additionally, the Company recorded a $7 million non-cash asset impairment charge related to the decision to close certain retail store locations during the third quarter of fiscal 2024, of which $3 million related to operating lease assets. The impairment charges are recorded within Loss (gain) on sale of assets and other asset charges in the Consolidated Statements of Operations.
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 1, 2026, 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
2027$274 $4 $(26)$— $248 $4 
2028272 3 (23)— 249 3 
2029228 3 (19)— 209 3 
2030236 3 (16)— 220 3 
2031193 2 (10)— 183 2 
Thereafter1,094 1 (22)— 1,072 1 
Total undiscounted lease liabilities and receipts$2,297 $16 $(116)$— $2,181 $16 
Less interest(3)
(838)(3)
Present value of lease liabilities1,459 13 
Less current lease liabilities(143)(3)
Long-term lease liabilities$1,316 $10 
(1)There were no operating leases for which the extension options are reasonably certain of being exercised. Excludes $2 million of 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 1, 2026August 2, 2025
Weighted-average remaining lease term (years)
Operating leases9.5 years9.9 years
Finance leases4.6 years4.6 years
Weighted-average discount rate
Operating leases9.7 %9.6 %
Finance leases9.4 %9.6 %

Other Information
(in millions)202620252024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$292 $311 $284 
Operating cash flows from finance leases
$1 $2 $2 
Financing cash flows from finance leases
$4 $7 $12 
Leased assets obtained in exchange for new finance lease liabilities$2 $5 $8 
Leased assets obtained in exchange for new operating lease liabilities$60 $321 $361