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SEGMENT REPORTING AND NET SALES
 3 Months Ended
May 04, 2025
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 the operation of retail stores and sell a wide assortment of building materials, home improvement products, 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. As discussed in Note 10, in June 2024, we acquired SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor through its branches located throughout the U.S. SRS is organized as three different lines of business: roofing and complementary building products, landscape, and pool. We have determined that each of these three 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 our SRS operating segments are presented in “Other” beginning from the acquisition date of June 18, 2024.
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 Ended
in millionsMay 4,
2025		April 28,
2024
Net sales
$37,287 $36,418 
Cost of sales
24,384 23,985 
Selling, general and administrative
7,164 6,667 
Depreciation and amortization
693 687 
Primary segment operating income
$5,046 $5,079 
The following table presents a reconciliation of certain Primary segment information to our consolidated totals:
Three Months Ended
May 4, 2025
in millions
Primary Segment
Other
Consolidated
Net sales
$37,287 $2,569 $39,856 
Operating income
5,046 87 5,133 
Interest income and other, net
(24)
Interest expense
615 
Earnings before provision for income taxes
$4,542 
Depreciation and amortization (1)
$831 $147 $978 
—————
(1)Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $52 million in our Primary segment and $87 million in Other.
Net sales presented in Other relate to the sale of products by SRS, with roofing and related products accounting for approximately 63% of net sales in Other during the three months ended May 4, 2025.
Prior to the SRS acquisition, our total Company consolidated results represented our Primary segment. Therefore, a reconciliation to our consolidated totals is not applicable for the three months ended April 28, 2024.
Net Sales
The following table presents our Primary segment major product lines and the related merchandising departments (and related services):
Major Product LineMerchandising 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 Ended
in millionsMay 4,
2025		April 28,
2024
Building Materials$12,931 $12,602 
Décor12,479 12,535 
Hardlines11,877 11,281 
Primary segment net sales
37,287 36,418 
Other net sales (1)
2,569 — 
Net sales
$39,856 $36,418 
—————
(1) See above for further discussion of Other net sales.
Note: During the first quarter of fiscal 2025, we made changes that realigned certain product categories across our merchandising departments and major product lines within our Primary segment. As a result, prior-year amounts have been updated to conform with the current-year presentation. These changes had no impact on our consolidated net sales.
The following table presents net sales, classified by geography:
Three Months Ended
in millionsMay 4,
2025		April 28,
2024
Net sales – in the U.S.
$37,224 $33,569 
Net sales – outside the U.S.
2,632 2,849 
Net sales
$39,856 $36,418 
The following table presents net sales by products and services:
Three Months Ended
in millionsMay 4,
2025		April 28,
2024
Net sales – products$38,512 $35,078 
Net sales – services1,344 1,340 
Net sales
$39,856 $36,418 
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 May 4, 2025 and February 2, 2025, deferred revenue for products and services was $1.8 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 May 4, 2025 and February 2, 2025, 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 May 4, 2025 and April 28, 2024.