Lowe's Companies, Inc.
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General Information
Lowe’s Companies, Inc. and subsidiaries (the Company or Lowe’s) is a Fortune® 100 company and the world’s second largest home improvement retailer. As of January 30, 2026, Lowe’s operated 1,759 home improvement stores and outlets in the United States, representing approximately 196 million square feet of retail selling space. In addition, Lowe’s operated over 540 branch locations in the United States and Canada, which include our current year acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG).
Lowe’s was founded in 1921 with the opening of its first hardware store in North Wilkesboro, North Carolina. The Company was incorporated in North Carolina in 1952 and has been publicly held since 1961. The Company’s common stock is listed on the New York Stock Exchange - ticker symbol “LOW”.
For additional information about the Company’s performance and financial condition, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report.
Our Strategy
Lowe’s is an omnichannel retailer whose focus is on helping customers solve problems and fulfill dreams for their homes by providing an excellent customer experience, creating a great place to work for our associates, and improving our communities, which we believe will create long-term, sustainable value for our shareholders. In fiscal 2025, we continued to execute on our Total Home strategy that was introduced in fiscal 2020, by focusing on serving the professional customer (Pro customer), accelerating our online business, expanding installation services, improving localization efforts and elevating our product assortment. In December 2024, we updated our Total Home strategy, aligned with the key drivers of home improvement demand, to help our customers solve their home improvement needs with more value and exceptional service. The five pillars of our Total Home strategy are as follows:
Drive Pro penetration | Accelerate online sales | Expand home services | Create a loyalty ecosystem | Increase space productivity |
•We continue to transform our Pro offerings to drive Pro penetration by continuing to enhance our Pro product assortment, including expanding our offerings to the larger Pro customer through our acquisitions of FBM and ADG, investing in inventory of high-volume Pro products, leveraging our redesigned loyalty program, improving job site delivery capabilities, expanding our Pro extended aisle, and building a comprehensive interior solutions platform.
•We are investing in our omnichannel retail capabilities to accelerate our online business through expansion of our product offerings, enhanced fulfillment capabilities, and a simplified user experience.
•We are expanding our installation services to create a high value simplified installation solution, which are provided by our network of independent installers or outsourced to our third-party model that sells, furnishes, and installs both smaller refresh projects and more complex projects.
•We are creating a loyalty ecosystem that drives brand preference and includes building out our MyLowe’s Rewards infrastructure for both Pro and do-it-yourself (DIY) customers.
•Finally, we are increasing space productivity by optimizing our assortments and tailoring them to the local markets, and balancing our value-oriented private brands with our national brands.
Our Customers and Market
The home improvement market in which we operate is highly fragmented. Our retail stores and online focus on serving individual homeowners and renters completing a wide array of projects, that vary along the spectrum of DIY and do-it-for-me (DIFM). In addition, we focus on Pro customers that are primarily the small to medium sized Pro, which includes three broad categories: tradespeople, repair and remodelers, and property managers. With the acquisitions of FBM and ADG in 2025, we are taking an important step in our Total Home strategy to serve larger Pro customers in the residential and commercial markets.
There are many variables that affect consumer demand for the home improvement products and services we offer. Key indicators we monitor include home price appreciation, age of the housing stock, real disposable personal income, housing turnover, and residential and commercial construction. We also monitor demographic and societal trends that shape home improvement industry growth over time as the U.S. population moves through major life stages and events.
Our Competition
The home improvement industry includes a broad competitive landscape that continues to evolve. We compete with national and regional home improvement warehouse chains and lumber yards in most of the markets we serve. We also compete with traditional hardware, plumbing, electrical, drywall and home supply retailers and distributors, as well as paint stores, lumber yards, garden centers, and maintenance and repair organizations. In addition, we compete with general merchandise retailers, home goods specialty stores, warehouse clubs, online retailers, other specialty retailers, providers of equipment and tool rental, service providers that install home improvement products, and wholesalers that provide home-related products and services to homeowners, renters, businesses, and the government.
Location of stores and branches, product assortment, product pricing, fulfillment capabilities, and customer service continue to be key competitive factors in our industry, while the evolution of technology, including artificial intelligence (AI) and machine learning technologies and customer expectations also underscore the importance of omnichannel capabilities as a competitive factor. See further discussion of competition in Item 1A, “Risk Factors”, of this Annual Report.
Our Omnichannel Capabilities
We are committed to meeting customer demand to shop however, whenever, and wherever they choose. Our omnichannel retail network provides a single view of the customer, no matter where they place their order, whether in-store, online, on-site, or through the contact center. This allows our customers to move from channel to channel with simple and seamless transitions even within the same transaction. For example, for many projects, the majority of our customers conduct research online before making an in-store purchase. For purchases made on Lowes.com, customers may pick up their purchase in-store at the customer service desk, curbside, or from touchless lockers, or have their purchase delivered to their home or business. In addition, flexible fulfillment options are available for in-store purchases and those made through the contact center. Regardless of the channels through which customers choose to engage with us, we strive to provide them with a seamless experience across channels and an extended aisle of products, enabled by our flexible fulfillment capabilities. Our ability to sell products in-store, online, on-site, through one of our branch locations, or through our contact centers speaks to our leverage of our existing infrastructure with the omnichannel capabilities we continue to introduce.
In-Store
Our 1,759 Lowe’s-branded retail home improvement stores and outlet stores are generally open seven days per week and average approximately 112,000 square feet of retail selling space, plus approximately 32,000 square feet of outdoor garden center selling space. Our retail home improvement stores offer similar products and services, with certain variations based on localization, along with a dedicated team of knowledgeable and friendly frontline associates available to assist our customers. We continue to develop and implement productivity tools, including freight flow optimization and advanced AI customer service tools, to enhance the efficiency of our sales associates and improve the customer experience. Our 16 Lowe’s Outlet stores have a smaller format and offer value to our customers through incremental savings on discontinued, overstocked, or scratch and dent items.
Online
Through our websites and mobile applications, we seek to empower consumers by providing a 24/7 shopping experience, expanded product assortment, product information, customer ratings and reviews, buying guides, how-to videos, and other information. These tools help consumers make more informed purchasing decisions and give them increased confidence to undertake home improvement projects. We enable customers to choose from a variety of fulfillment options, including buying online and picking up in-store, curbside pick-up, same-day delivery through our gig network, and shipment to their homes or
businesses. Further, we also offer digital inspiration, design, and project management tools across multiple home improvement categories.
On-Site
We have on-site specialists available for our customers to assist them in selecting products and services for their projects. Our Pro sales managers meet with Pro customers at their place of business or on a job site and leverage nearby stores and our distribution network to ensure we meet customer needs for products and resources. In addition, our In-Home Sales program is available in the majority of our stores to discuss various exterior projects such as windows, doors, and fencing, whose characteristics lend themselves to an in-home consultative sales approach.
Branches
Lowe’s has over 540 branch locations that serve larger Pro customers. Our nationwide branch locations specialize in the delivery and installation of building materials for residential and commercial projects, while providing reliable local service and trusted expertise. Services delivered by these locations include distribution of product to large residential and commercial professionals in both new construction and repair and remodel applications, as well as providing design, distribution and installation services to home builders and property managers.
Contact Centers
Lowe’s operates contact centers utilizing a combination of internal staffing and third-party providers. These contact centers enable an omnichannel customer experience by tendering sales, assisting with order management, coordinating deliveries, managing after-sale installations, and answering general customer questions via phone, mail, e-mail, live chat, and social media.
Our Products
Product Selection
To meet customers’ varying needs, we offer a complete line of products for construction, maintenance, repair, remodeling, and decorating. We offer home improvement products in the following categories: Appliances, Seasonal & Outdoor Living, Lumber, Lawn & Garden, Hardware, Kitchens & Bath, Building Materials, Rough Plumbing, Paint, Millwork, Tools, Electrical, Flooring, and Décor. A typical Lowe’s-branded home improvement store stocks approximately 37,000 items, with additional items available through our online selling channel. Our product assortments offered in-store strive to meet the needs of the local market for the Pro and DIY customer. See Note 17 of the Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data”, of this Annual Report for historical revenues by product category for each of the last three fiscal years.
We are committed to offering a wide selection of national brand-name merchandise complemented by our selection of high-value private brands. We are balancing our value-oriented private brands with our national power brands, intensifying our localization efforts and expanding our rural assortment. In addition, we are dedicated to selling products sourced in a socially responsible, efficient, and cost-effective manner.
Supply Chain
We source our products from vendors worldwide and believe that alternative and competitive suppliers are available for virtually all of our products. Whenever possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.
To efficiently replenish our stores and meet our customers’ expectations for fast fulfillment and delivery, we own and operate more than 120 supply chain facilities in our network. These facilities include regional distribution centers, flatbed distribution centers, import distribution centers, bulk distribution centers, cross-dock terminals, and Fulfillment Centers. Each one of these distribution nodes plays a critical role in our Total Home strategy and collectively enable our products to get to their destination as efficiently as possible.
We continue to modernize our network to unlock our omnichannel capabilities while keeping our organization’s sustainability goals top of mind. Through our market-based delivery model, we have been focused on improving the speed of our delivery capabilities for our customers. Most parcel-eligible items fulfilled by Lowe’s can be ordered by a customer and delivered within two business days. Also, the nationwide expansion of our gig provider network enables same-day delivery of certain products from our stores, and as of fiscal 2025, we have the ability to deliver major appliances next-day to the majority of zip codes in the United States. Customer needs and buying patterns are constantly changing, and our supply chain will continue to evolve to meet their needs. We are building an omnichannel supply chain that positions the right products in the right quantities in the right places, and operates with greater network capacity with better flow management and optimization.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals.
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Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and capital resources during the two-year period ended January 30, 2026 (our fiscal years 2025 and 2024). Unless otherwise noted, all references herein for the years 2025, 2024, and 2023 represent the fiscal years ended January 30, 2026, January 31, 2025, and February 2, 2024, respectively. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements included in this Annual Report that have been prepared in accordance with accounting principles generally accepted in the United States of America. This discussion and analysis is presented in four sections:
EXECUTIVE OVERVIEW
The following table highlights our annual financial results:
(in millions, except per share data) | 2025 | 2024 | 2023 | ||||||||||||
Net sales | $ | 86,286 | $ | 83,674 | $ | 86,377 | |||||||||
Net earnings | 6,654 | 6,957 | 7,726 | ||||||||||||
Diluted earnings per share | $ | 11.85 | $ | 12.23 | $ | 13.20 | |||||||||
Net cash provided by operating activities | $ | 9,864 | $ | 9,625 | $ | 8,140 | |||||||||
Capital expenditures | 2,213 | 1,927 | 1,964 | ||||||||||||
Repurchases of common stock1 | 75 | 3,929 | 6,334 | ||||||||||||
Cash dividend payments | 2,636 | 2,566 | 2,531 | ||||||||||||
1 Repurchases of common stock on a trade-date basis.
Net sales for fiscal 2025 increased 3.1% from fiscal 2024 to $86.3 billion. Comparable sales for fiscal 2025 increased 0.2%, consisting of a 3.0% increase in comparable average ticket, partially offset by a 2.8% decrease in comparable customer transactions. Net earnings for fiscal 2025 decreased 4.4% to $6.7 billion. Diluted earnings per common share decreased 3.1% in fiscal 2025 to $11.85 from $12.23 in fiscal 2024. Included in fiscal 2025 results are pre-tax expenses of $321 million consisting of transaction costs and intangible asset amortization related to the acquisition of ADG and FBM, which decreased diluted earnings per share by $0.43 in fiscal year 2025. Included in the fiscal 2024 results is $177 million of pre-tax income associated with the fiscal 2022 sale of the Canadian retail business, which increased diluted earnings per share by $0.24 in fiscal year 2024. Adjusting for these items, adjusted diluted earnings per common share increased 2.4% to $12.28 in 2025 from adjusted diluted earnings per common share of $11.99 in 2024 (see the non-GAAP financial measures discussion).
For fiscal 2025, cash flows from operating activities were $9.9 billion, with $2.2 billion used for capital expenditures. Continuing to deliver on our commitment to return excess cash to shareholders, the Company paid $2.6 billion in dividends during the year.
During 2025, we continued to drive progress across all five key initiatives of our Total Home strategy, which was reflected in the strength we delivered with our Pro customers, online, and home services. Our Total Home strategic initiatives have appealed to both the value-conscious homeowner and the busy Pro customer.
To expand our Pro customer market, we completed the acquisitions of FBM and ADG. We believe these acquisitions, along with our retail home improvement business, provide the large Pro customer with everything they need for the interior space of the home and position the Company to benefit when there is a recovery in the housing industry.
In addition, we continued to deliver on our Perpetual Productivity Improvement (PPI) initiatives, including completing the rollout of our front-end transformation across our store portfolio, streamlining our Freight Flow process, and driving inventory productivity while also navigating dynamic trade policies and tariffs.
Given the persistent volatility in the housing macro environment, heading into 2026 we continue our focus on our PPI initiatives and managing what is within our control. We are pleased with our current track record of disciplined execution and are confident we are making the right investments to continue to deliver long-term sales growth and sustainable shareholder value.
OPERATIONS
The following table sets forth the percentage relationship to net sales of each line item of the consolidated statements of earnings. This table should be read in conjunction with the following discussion and analysis and the consolidated financial statements, including the related notes to the consolidated financial statements.
Basis Point Increase/(Decrease) in Percentage of Net Sales | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||||||||||||||||||||
| Net sales | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||||||||||||
| Gross margin | 33.48 | 33.32 | 33.39 | 16 | (7) | |||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Selling, general and administrative | 19.46 | 18.74 | 18.02 | 72 | 72 | |||||||||||||||||||||
| Depreciation and amortization | 2.25 | 2.07 | 1.99 | 18 | 8 | |||||||||||||||||||||
| Operating income | 11.77 | 12.51 | 13.38 | (74) | (87) | |||||||||||||||||||||
| Interest – net | 1.63 | 1.57 | 1.60 | 6 | (3) | |||||||||||||||||||||
| Pre-tax earnings | 10.14 | 10.94 | 11.78 | (80) | (84) | |||||||||||||||||||||
| Income tax provision | 2.43 | 2.63 | 2.83 | (20) | (20) | |||||||||||||||||||||
| Net earnings | 7.71 | % | 8.31 | % | 8.95 | % | (60) | (64) | ||||||||||||||||||
The following table sets forth key metrics utilized by management in assessing business performance. This table should be read in conjunction with the following discussion and analysis and the consolidated financial statements, including the related notes to the consolidated financial statements.
| Other Metrics | 2025 | 2024 | 2023 | ||||||||||||
Comparable sales increase/(decrease)1 | 0.2 | % | (2.7) | % | (4.7) | % | |||||||||
Customer transactions (in millions)2,3 | 780 | 801 | 827 | ||||||||||||
Average ticket3 | $ | 106.13 | $ | 102.93 | $ | 102.47 | |||||||||
| At end of year: | |||||||||||||||
| Number of retail stores | 1,759 | 1,748 | 1,746 | ||||||||||||
| Sales floor square feet (in millions) | 196 | 195 | 195 | ||||||||||||
Average retail store size selling square feet (in thousands)4 | 112 | 112 | 112 | ||||||||||||
| Net earnings to average debt and shareholders’ deficit | 22.1 | % | 27.5 | % | 31.6 | % | |||||||||
Return on invested capital5 | 26.1 | % | 32.0 | % | 36.4 | % | |||||||||
1 A comparable location is a retail location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Comparable sales include online sales, which positively impacted comparable sales in fiscal 2025, fiscal 2024, and fiscal 2023 by approximately 105 basis points, 50 basis points, and 25 basis points, respectively. Acquisitions are typically included in comparable sales after they have been owned for more than 12 months.
2 In the first quarter of fiscal 2025, the Company adjusted its customer transactions metric to exclude certain order modifications which were previously included as a separate transaction. The prior year periods have been adjusted to align with the current period presentation.
3 Customer transactions and average ticket represent metrics used by management to evaluate performance of our retail locations.
4 Average store size selling square feet is defined as sales floor square feet divided by the number of stores open at the end of the period.
5 Return on invested capital is calculated using a non-GAAP financial measure. See below for additional information and reconciliations of non-GAAP measures.
Fiscal 2025 Compared to Fiscal 2024
Net Sales – Net sales increased 3.1% to $86.3 billion in fiscal 2025, driven by sales associated with new acquisitions during the year, and an increase in comparable sales of 0.2% over the same period. The increase in comparable sales was driven by a 3.0% increase in comparable average ticket, partially offset by a decline in comparable customer transactions of 2.8%. Comparable sales change during each quarter of the fiscal year, as reported, were a decline of 1.7% in the first quarter, an increase of 1.1% in the second quarter, an increase of 0.4% in the third quarter, and an increase of 1.3% in the fourth quarter.
During fiscal 2025, we had comparable sales increases in five of 14 product categories, including Rough Plumbing, Appliances, Building Materials, Lawn & Garden, and Paint. Strength in these categories reflects continued growth with our Pro customer and online, as well as our broad assortment of appliances available next-day to our customers in the majority of zip codes in the United States.
Gross Margin – Gross margin as a percentage of sales for fiscal 2025 increased 16 basis points compared to fiscal 2024. The gross margin increase for the year was primarily driven by favorability from credit revenue and improvements in inventory shrink, partially offset by the operational cost structure of acquisitions during 2025.
SG&A – SG&A expense for fiscal 2025 deleveraged 72 basis points as a percentage of sales compared to fiscal 2024. This was primarily driven by employee compensation and benefits, along with cycling prior year realized gains on contingent consideration associated with the 2022 sale of the Canadian retail business, partially offset by the operational cost structure of acquisitions during 2025.
Depreciation and Amortization – Depreciation and amortization expense deleveraged 18 basis points for fiscal 2025 as a percentage of sales compared to fiscal 2024, primarily due to amortization of intangible assets of acquired businesses in 2025.
Interest – Net – Net interest expense is comprised of the following:
| (In millions) | 2025 | 2024 | ||||||||
| Interest expense, net of amount capitalized | $ | 1,471 | $ | 1,445 | ||||||
| Amortization of original issue discount and loan costs | 25 | 24 | ||||||||
| Interest on tax uncertainties | 3 | 3 | ||||||||
| Interest income | (121) | (159) | ||||||||
| Other | 28 | — | ||||||||
| Interest – net | $ | 1,406 | $ | 1,313 | ||||||
Net interest expense in fiscal 2025 deleveraged six basis points.
Income Tax Provision – Our effective income tax rate was 23.9% in fiscal 2025 compared to 24.0% in fiscal 2024.
Fiscal 2024 Compared to Fiscal 2023
For a comparison of our results of operations, financial condition, liquidity, and capital resources for the fiscal years ended January 31, 2025, and February 2, 2024, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on March 24, 2025.
Non-GAAP Financial Measures
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is considered a non-GAAP financial measure. The Company believes this non-GAAP financial measure provides useful insight for analysts and investors in understanding the comparison of operational performance for fiscal 2025 and fiscal 2024. Adjusted diluted earnings per share excludes the impact of certain items, further described below, not contemplated in the Company’s business outlook for fiscal 2025 and fiscal 2024.
Fiscal 2025 Impacts
•In fiscal 2025, the Company recognized pre-tax expenses of $321 million consisting of transaction costs and intangible asset amortization related to the acquisitions of Artisan Design Group and Foundation Building Materials (Acquisition of businesses).
Fiscal 2024 Impacts
•In fiscal 2024, the Company recognized pre-tax income of $177 million consisting of realized gains on the contingent consideration associated with the fiscal 2022 sale of the Canadian retail business (Canadian retail business transaction).
Adjusted diluted earnings per share should not be considered an alternative to, or more meaningful indicator of, the Company’s diluted earnings per common share as prepared in accordance with GAAP. The Company’s methods of determining this non-GAAP financial measure may differ from the method used by other companies and may not be comparable.
| 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Pre-Tax Earnings | Tax1 | Net Earnings | Pre-Tax Earnings | Tax1 | Net Earnings | |||||||||||||||||||||||||||||
| Diluted earnings per share, as reported | $ | 11.85 | $ | 12.23 | ||||||||||||||||||||||||||||||
| Non-GAAP adjustments – per share impacts | ||||||||||||||||||||||||||||||||||
| Acquisition of businesses | 0.57 | (0.14) | 0.43 | — | — | — | ||||||||||||||||||||||||||||
| Canadian retail business transaction | — | — | — | (0.31) | 0.07 | (0.24) | ||||||||||||||||||||||||||||
| Adjusted diluted earnings per share | $ | 12.28 | $ | 11.99 | ||||||||||||||||||||||||||||||
1 Represents the tax benefit or expense related to the item excluded from adjusted diluted earnings per share.
Return on Invested Capital
Return on Invested Capital (ROIC) is calculated using a non-GAAP financial measure. Management believes ROIC is a meaningful metric for analysts and investors as a measure of how effectively the Company is using capital to generate financial returns. Although ROIC is a common financial metric, numerous methods exist for calculating ROIC. Accordingly, the method used by our management may differ from the methods used by other companies. We encourage you to understand the methods used by another company to calculate ROIC before comparing its ROIC to ours.
We define ROIC as the rolling 12 months’ lease adjusted net operating profit after tax (Lease adjusted NOPAT) divided by the average of current year and prior year ending debt and shareholders’ deficit. Lease adjusted NOPAT is a non-GAAP financial measure, and net earnings is considered to be the most comparable GAAP financial measure. The calculation of ROIC, together with a reconciliation of net earnings to Lease adjusted NOPAT, is as follows:
| (In millions, except percentage data) | 2025 | 2024 | 2023 | ||||||||||||
| Calculation of Return on Invested Capital | |||||||||||||||
| Numerator | |||||||||||||||
| Net earnings | $ | 6,654 | $ | 6,957 | $ | 7,726 | |||||||||
| Plus: | |||||||||||||||
| Interest expense – net | 1,406 | 1,314 | 1,382 | ||||||||||||
| Operating lease interest | 179 | 173 | 157 | ||||||||||||
| Provision for income taxes | 2,093 | 2,196 | 2,449 | ||||||||||||
| Lease adjusted net operating profit | 10,332 | 10,640 | 11,714 | ||||||||||||
| Less: | |||||||||||||||
Income tax adjustment1 | 2,473 | 2,552 | 2,819 | ||||||||||||
| Lease adjusted net operating profit after tax | $ | 7,859 | $ | 8,088 | $ | 8,895 | |||||||||
| Denominator | |||||||||||||||
Average debt and shareholders’ deficit2 | $ | 30,104 | $ | 25,270 | $ | 24,418 | |||||||||
| Net earnings to average debt and shareholders’ deficit | 22.1 | % | 27.5 | % | 31.6 | % | |||||||||
| Return on invested capital | 26.1 | % | 32.0 | % | 36.4 | % | |||||||||
1 Income tax adjustment is defined as net operating profit multiplied by the effective tax rate, which was 23.9%, 24.0%, and 24.1% for fiscal 2025, fiscal 2024, and fiscal 2023, respectively.
2 Average debt and shareholders’ deficit is defined as average current year and prior year ending debt, including current maturities, short-term borrowings, and operating lease liabilities, plus the average current year and prior year ending total shareholders’ deficit.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity
Cash flows from operations, combined with our continued access to capital markets on both a short-term and long-term basis, as needed, remain adequate to fund our operations, make strategic investments to support long-term growth, return cash to shareholders in the form of dividends, and repay debt maturities as they become due. We believe these sources of liquidity will continue to support our business for the next twelve months. As of January 30, 2026, we held $1.0 billion of cash and cash equivalents, as well as $5.0 billion in undrawn capacity on our Revolving Credit Facilities.
As of January 30, 2026, our material contractual obligations and commercial commitments consist of leases, long-term debt, purchase obligations, and letters of credit. See Note 7, Note 8, and Note 15 of the Notes to the Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data”, of this Annual Report for amounts outstanding related to leases, long-term debt, and commitments, respectively, as of January 30, 2026.
Cash Flows Provided by Operating Activities
| (In millions) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 9,864 | $ | 9,625 | ||||||||||
Cash flows from operating activities continued to provide the primary source of our liquidity. The increase in net cash provided by operating activities for the year ended January 30, 2026, compared to the year ended January 31, 2025, was primarily driven by changes in merchandise inventory due to inventory optimization efforts during the year, partially offset by lower net earnings and the timing of income tax payments which were previously deferred under the income tax relief announced by the IRS for businesses impacted by Hurricane Helene.
Cash Flows Used in Investing Activities
| (In millions) | 2025 | 2024 | ||||||||||||
| Net cash used in investing activities | $ | (12,264) | $ | (1,738) | ||||||||||
Net cash used in investing activities is primarily driven by our acquisitions of ADG and FBM, which used $10.1 billion in fiscal year 2025, in addition to transactions related to capital expenditures.
Capital expenditures
Our capital expenditures generally consist of investments in our strategic initiatives to enhance our ability to serve customers, improve existing stores, and support expansion plans. Capital expenditures were $2.2 billion in fiscal 2025 and $1.9 billion in fiscal 2024.
For fiscal 2026, our guidance for capital expenditures is approximately $2.5 billion. We may adjust our capital expenditures, if necessary or appropriate, to support our operations, to enhance long-term strategic positioning, or in response to the economic environment.
Cash Flows Provided by/Used in Financing Activities
| (In millions) | 2025 | 2024 | ||||||||||||
| Net cash provided by/(used in) financing activities | $ | 1,621 | $ | (7,047) | ||||||||||
Net cash provided by/(used in) financing activities primarily consists of transactions related to our debt, share repurchases, and cash dividend payments.
Total Debt
During fiscal 2025, the Company issued $5.0 billion of unsecured notes. In addition, the Company entered into a $2.0 billion unsecured term loan credit agreement (2025 Term Loan) which has a maturity date of October 2028. The proceeds from the unsecured notes and the 2025 Term Loan were designated to finance, in part, our acquisition of FBM. We also repaid $2.5 billion and $450 million in senior notes at maturity in fiscal 2025 and fiscal 2024, respectively.
In fiscal 2025, we entered into a $2.0 billion five-year unsecured credit agreement (2025 Credit Agreement), which has a maturity of September 2030, replacing the Company’s $2.0 billion five-year unsecured revolving credit agreement entered into in December 2021, and as amended (Third Amended and Restated Credit Agreement). We also have amended the five-year unsecured revolving credit agreement dated September 1, 2023 (the 2023 Credit Agreement), with a syndicate of banks, which has a maturity date of September 2028 and an aggregate availability of $2.0 billion. Under the amendment, borrowings under the 2023 Credit Agreement will no longer be subject to a SOFR credit spread adjustment.
The 2025 Credit Agreement and the 2023 Credit Agreement (collectively the Long-Term Credit Agreements) support the Company’s commercial paper program. The amounts available to be drawn under the Credit Agreements is reduced by the amount of borrowings under our commercial paper program. As of January 30, 2026, and January 31, 2025, there were no outstanding borrowings under the Company’s commercial paper program or the Long-Term Credit Agreements.
In fiscal 2025, the Company also entered into a $1.0 billion 364-day unsecured revolving credit agreement (collectively with the Long-term Credit Agreements the “Revolving Credit Facilities”) which has a maturity date of September 2026 and had no outstanding borrowings as of January 30, 2026.
The following table includes additional information related to our debt for fiscal 2025 and fiscal 2024:
| (In millions, except for interest rate data) | 2025 | 2024 | ||||||||||||
| Net proceeds from issuance of debt | $ | 6,974 | $ | — | ||||||||||
| Repayment of debt | $ | (2,587) | $ | (545) | ||||||||||
| Net change in commercial paper | $ | — | $ | — | ||||||||||
| Maximum commercial paper outstanding at any period | $ | 500 | $ | 250 | ||||||||||
Share Repurchases
We have a share repurchase program, authorized by the Company’s Board of Directors, that is executed through purchases made from time to time either in the open market or through private off-market transactions. We also withhold shares from employees to satisfy tax withholding liabilities on share-based payments. Shares repurchased are retired and returned to
authorized and unissued status. The following table provides, on a settlement date basis, the total number of shares repurchased, average price paid per share, and the total amount paid for share repurchases for fiscal 2025 and fiscal 2024:
| (In millions, except per share data) | 2025 | 2024 | ||||||||||||
Total amount paid for share repurchases1 | $ | 116 | $ | 4,053 | ||||||||||
| Total number of shares repurchased | 0.5 | 16.6 | ||||||||||||
| Average price paid per share | $ | 243.48 | $ | 244.63 | ||||||||||
1 Excludes unsettled share repurchases and excise taxes.
As of January 30, 2026, we had $10.8 billion remaining under our share repurchase program with no expiration date. In fiscal 2025, the Company paused its share repurchase program.
Dividends
In the third quarter of fiscal 2025, we increased our quarterly dividend payment by 4% to $1.20 per share. Our dividend payment dates are established such that dividends are paid in the quarter immediately following the quarter in which they are declared. The following table provides additional information related to our dividend payments for fiscal 2025 and fiscal 2024:
| (In millions, except per share data and percentage data) | 2025 | 2024 | ||||||||||||
| Total cash dividend payments | $ | 2,636 | $ | 2,566 | ||||||||||
| Dividends paid per share | $ | 4.70 | $ | 4.50 | ||||||||||
| Dividend payout ratio | 40 | % | 37 | % | ||||||||||
Capital Resources
Next expected filings
- ~2026-05-28 10-Q expected by 2026-06-10 (in 27 days)
- ~2026-08-27 10-Q expected by 2026-09-09 (in 118 days)
- ~2026-11-25 10-Q expected by 2026-12-08 (in 208 days)
- ~2027-03-22 10-K expected by 2027-03-30 (in 325 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-16 DEF 14A Proxy Statement
- 2026-03-23 10-K Annual Report
- 2026-02-25 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-26 10-Q Quarterly Report
- 2025-11-19 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-09 8-K Completion of Acquisition/Disposition; Material Financial Obligation; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-09-30 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits
- 2025-09-19 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-08-28 10-Q Quarterly Report
- 2025-08-20 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-20 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-29 10-Q Quarterly Report
- 2025-05-21 8-K/A Earnings Release; Financial Statements and Exhibits
- 2025-05-21 8-K Earnings Release; Financial Statements and Exhibits
- 2025-03-24 10-K Annual Report