Segment Information
The Company’s operations include one reportable operating segment, Retail Home Improvement, and the chief operating decision maker (CODM) is the Chairman, President, and Chief Executive Officer. Our operating segments reflect the way in which internally reported financial information is regularly reviewed by the CODM who has the ultimate decision-making authority for resource allocation and assessing performance of our segments.
•Retail Home Improvement Reportable Segment - We are engaged in retail operations that sell a wide assortment of home décor, hardlines, and building products both in stores and online throughout the United States. In addition, we have specialists on-site to provide services, including home improvement installation services, and tool and equipment rental.
•Other - As discussed in Note 2, in 2025, Lowe’s acquired FBM, a leading distributor of interior building products, and ADG, a nationwide provider of design, distribution and installation services for interior surface finishes. FBM operations are organized into two lines of business and represent two operating segments, Ceilings and Wall Systems and Commercial Doors and Hardware. ADG is deemed to be a separate operating segment, referred to as Interior Finishes. These three operating segments do not meet the thresholds prescribed under ASC Topic 280 to be deemed a reportable segment, therefore, results from these operating segments are presented in “Other”.
The CODM regularly reviews operating income as the measure of each operating segment’s profit or loss, as well as significant segment expenses of our Retail Home Improvement segment to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Corporate expenses are allocated to the individual operating segments. The CODM also uses these measures in monitoring plan versus actual results. The CODM does not review segment assets at a different asset level or category than those disclosed in the consolidated balance sheets.
The following table presents the Company’s operating income results for its Retail Home Improvement reportable segment, including significant segment expenses:
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| Years Ended |
| January 30, 2026 | | January 31, 2025 | | February 2, 2024 |
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| (In millions, except percentage data) | Amount | | % Sales | | Amount | | % Sales | | Amount | | % Sales |
| Net Sales | $ | 84,078 | | | 100.00 | % | | $ | 83,674 | | | 100.00 | % | | $ | 86,377 | | | 100.00 | % |
| Less: | | | | | | | | | | | |
| Cost of sales | 55,615 | | | 66.15 | | | 55,797 | | | 66.68 | | | 57,533 | | | 66.61 | |
| Expenses: | | | | | | | | | | | |
| Employee compensation and benefits | 11,147 | | | 13.26 | | | 10,830 | | | 12.94 | | | 10,801 | | | 12.50 | |
| Occupancy and facility costs | 1,932 | | | 2.30 | | | 1,897 | | | 2.27 | | | 1,836 | | | 2.13 | |
| Advertising | 973 | | | 1.16 | | | 921 | | | 1.10 | | | 831 | | | 0.96 | |
Other segment items1 | 2,380 | | | 2.82 | | | 2,034 | | | 2.43 | | | 2,102 | | | 2.43 | |
| Selling, general and administrative: | 16,432 | | | 19.54 | | | 15,682 | | | 18.74 | | | 15,570 | | | 18.02 | |
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| Depreciation and amortization | 1,808 | | | 2.15 | | | 1,729 | | | 2.07 | | | 1,717 | | | 1.99 | |
| Operating income | $ | 10,223 | | | 12.16 | % | | $ | 10,466 | | | 12.51 | % | | $ | 11,557 | | | 13.38 | % |
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1 Other segment items primarily include financial services costs, technology service costs, insurance costs, impairment costs, and store environment initiative and display costs.
The following table presents a reconciliation of our Retail Home Improvement results to our consolidated totals:
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| January 30, 2026 |
| Retail Home Improvement | | Other | | Consolidated |
| (In millions, except percentage data) | Amount | | % Sales | | Amount | | % Sales | | Amount | | % Sales |
| Net sales | $ | 84,078 | | | 100.00 | % | | $ | 2,208 | | | 100.00 | % | | $ | 86,286 | | | 100.00 | % |
| Operating income | 10,223 | | | 12.16 | | | (70) | | | (3.17) | | | 10,153 | | | 11.77 | |
| Interest – net | | | | | | | | | 1,406 | | | 1.63 | |
| Pre-tax earnings | | | | | | | | | 8,747 | | | 10.14 | |
| Income tax provision | | | | | | | | | 2,093 | | | 2.43 | |
| Net earnings | | | | | | | | | $ | 6,654 | | | 7.71 | % |
reconciliation to our consolidated totals is not applicable for fiscal 2024 or 2023.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.