Revenue
Net sales consists primarily of revenue, net of sales tax, associated with contracts with customers for the sale of goods and services in amounts that reflect consideration the Company is entitled to in exchange for those goods and services.
The following table presents the Company’s sources of revenue:
| | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Years Ended |
| January 30, 2026 | | January 31, 2025 | | February 2, 2024 |
| Products | | $ | 82,352 | | | $ | 80,538 | | | $ | 83,002 | |
| Services | | 2,542 | | | 1,934 | | | 2,097 | |
| Other | | 1,392 | | | 1,202 | | | 1,278 | |
| Net sales | | $ | 86,286 | | | $ | 83,674 | | | $ | 86,377 | |
The balances and classification within the consolidated balance sheets for anticipated sales returns and the associated right of return assets are as follows:
| | | | | | | | | | | | | | |
| (In millions) | Classification | January 30, 2026 | | January 31, 2025 |
| Anticipated sales returns | Other current liabilities | $ | 178 | | | $ | 167 | |
| Right of return assets | Other current assets | 109 | | | 99 | |
Deferred revenue - retail and stored-value cards
Deferred revenue for retail and stored-value cards are as follows:
| | | | | | | | | | | |
| (In millions) | January 30, 2026 | | January 31, 2025 |
| Retail deferred revenue | $ | 936 | | | $ | 770 | |
| Stored-value cards deferred revenue | 541 | | | 588 | |
| Deferred revenue | $ | 1,477 | | | $ | 1,358 | |
Deferred revenue - Lowe’s protection plans
Deferred revenue associated with Lowe’s protection plans is as follows:
| | | | | | | | | | | |
| (In millions) | January 30, 2026 | | January 31, 2025 |
| Deferred revenue - Lowe’s protection plans | $ | 1,262 | | | $ | 1,268 | |
Lowe’s protection plan sales previously recorded as deferred revenue and claim expenses incurred are as follows:
| | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Years Ended |
| January 30, 2026 | | January 31, 2025 | | February 2, 2024 |
| Lowe’s protection plan deferred revenue recognized into sales | | $ | 580 | | | $ | 561 | | | $ | 549 | |
| Lowe’s protection plan claim expenses | | 239 | | | 210 | | | 224 | |
Disaggregation of Revenues
The following table presents the Company’s net sales disaggregated by merchandise division within our Retail Home Improvement segment, as well as Other segment net sales: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Years Ended |
| | January 30, 2026 | | January 31, 2025 | | February 2, 2024 |
| (In millions) | | Total Sales | | % | | Total Sales | | % | | Total Sales | | % |
Home Décor1 | | $ | 31,527 | | | 36.5 | % | | $ | 31,307 | | | 37.5 | % | | $ | 32,535 | | | 37.5 | % |
Building Products2 | | 26,533 | | | 30.7 | | | 26,338 | | | 31.4 | | | 26,901 | | | 31.1 | |
Hardlines3 | | 24,185 | | | 28.0 | | | 24,329 | | | 29.0 | | | 25,021 | | | 28.9 | |
| Other | | 1,833 | | | 2.2 | | | 1,700 | | | 2.1 | | | 1,920 | | | 2.5 | |
| Retail Home Improvement | | 84,078 | | | 97.4 | | | 83,674 | | | 100.0 | | | 86,377 | | | 100.0 | |
| Other segment net sales | | 2,208 | | | 2.6 | | | — | | | — | | | — | | | — | |
| Total | | $ | 86,286 | | | 100.0 | % | | $ | 83,674 | | | 100.0 | % | | $ | 86,377 | | | 100.0 | % |
Note: Merchandise division net sales for prior periods have been reclassified to conform to the current year presentation.
1 Home Decor includes the following product categories: Appliances, Decor, Flooring, Kitchens & Bath, and Paint
2 Building Products includes the following product categories: Building Materials, Electrical, Lumber, Millwork, and Rough Plumbing
3 Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools
The following table presents the Company’s net sales disaggregated by geographical area:
| | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Years Ended |
| January 30, 2026 | | January 31, 2025 | | February 2, 2024 |
| United States | | $ | 86,225 | | | $ | 83,674 | | | $ | 86,377 | |
| Canada | | 61 | | | — | | | — | |
| Net Sales | | $ | 86,286 | | | $ | 83,674 | | | $ | 86,377 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.