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SEGMENT REPORTING AND NET SALES | 3 Months Ended
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Apr. 28, 2024
Segment Reporting [Abstract] |
SEGMENT REPORTING AND NET SALES | SEGMENT REPORTING AND NET SALES We currently conduct our retail operations in the U.S., Canada, and Mexico, each of which represents one of our three operating segments. Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the chief operating decision maker (“CODM”), who is our President and Chief Executive Officer, to analyze performance, make decisions and allocate resources. For disclosure purposes, we aggregate these three operating segments into one reportable segment due to the similar nature of their operations and economic characteristics. The following table presents net sales, classified by geography:
|  |  | Three Months Ended
in millions |  |  |  |  | April 28, 2024 |  | April 30, 2023
Net sales – in the U.S. |  |  |  |  | $ | 33,569 |  |  | $ | 34,507 |
Net sales – outside the U.S. |  |  |  |  | 2,849 |  |  | 2,750 |
Net sales |  |  |  |  | $ | 36,418 |  |  | $ | 37,257 |
The following table presents net sales by products and services:
|  |  | Three Months Ended
in millions |  |  |  |  | April 28, 2024 |  | April 30, 2023
Net sales – products |  |  |  |  | $ | 35,078 |  |  | $ | 35,888 |
Net sales – services |  |  |  |  | 1,340 |  |  | 1,369 |
Net sales |  |  |  |  | $ | 36,418 |  |  | $ | 37,257 |
During the first quarter of fiscal 2024, due to growth across our business in recent years and our continued focus on the customer experience, we made certain changes to our merchandising department structure that realign certain merchandising departments across our three major product lines. The changes primarily include the following, which reflect how our CODM is receiving information: •Under the Building Materials product line, we divided our Electrical/Lighting department into two separate departments, and we moved the Lighting department to our Décor product line. •Under the Décor product line, we separated our Kitchen & Bath department into separate departments and moved blinds from our Décor/Storage department to a new Kitchen & Blinds department. We then consolidated all storage and organization products within a new Storage & Organization department and moved it to the Hardlines product line. •Under the Hardlines product line, we combined all power tools and products into a newly formed Power department, and we moved certain non-power products from our former Tools department to our Hardware department. These changes had no impact on our consolidated net sales and are incorporated into the tables below. The following table presents our 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):
|  |  | Three Months Ended
in millions |  |  |  |  | April 28, 2024 |  | April 30, 2023
Building Materials |  |  |  |  | $ | 12,614 |  |  | $ | 12,993 |
Décor |  |  |  |  | 12,344 |  |  | 12,704 |
Hardlines |  |  |  |  | 11,460 |  |  | 11,560 |
Net sales |  |  |  |  | $ | 36,418 |  |  | $ | 37,257 |
————— Note: As discussed above, we made changes impacting our product lines and certain merchandising departments in the first quarter of fiscal 2024. As a result, prior-year amounts have been reclassified to conform with the current-year presentation. These changes had no impact on consolidated net sales. For further information regarding the impact of these changes to the sales information for our major product lines and merchandising departments presented in our 2023 Form 10-K, refer to Part II, Item 5. Other Information. 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 April 28, 2024 and January 28, 2024, deferred revenue for products and services was $1.8 billion and $1.7 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 April 28, 2024 and January 28, 2024, 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 during the three months ended April 28, 2024 and April 30, 2023.

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