| Properties and Leases |
Properties and Leases Property and Equipment, net
The major classes of property and equipment, net as of January 31, 2026 and February 1, 2025 are as follows:
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January 31,
2026 |
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February 1,
2025 |
| (millions) |
| Land |
$ |
1,134 |
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$ |
1,168 |
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| Buildings on owned land |
3,148 |
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3,134 |
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| Buildings on leased land and leasehold improvements |
1,331 |
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1,334 |
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| Fixtures and equipment |
3,385 |
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3,611 |
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8,998 |
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9,247 |
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| Less accumulated depreciation and amortization |
4,255 |
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4,177 |
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$ |
4,743 |
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$ |
5,070 |
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In connection with various shopping center agreements, the Company is obligated to operate certain stores within the centers for periods of up to 15 years. Some of these agreements require that the stores be operated under a particular name.
Leases
The Company leases a portion of the real estate and personal property used in its operations. Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs; some also require additional payments based on percentages of sales and some contain purchase options. Certain of the Company's leases contain covenants that restrict the ability of the tenant (typically a subsidiary of the Company) to take specified actions (including the payment of dividends or other amounts on account of its capital stock) unless the tenant satisfies certain financial tests.
ROU assets and lease liabilities consist of:
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Classification |
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January 31,
2026 |
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February 1,
2025 |
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(millions) |
| Assets |
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| Finance lease assets (a) |
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Right of Use Assets |
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$ |
9 |
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$ |
10 |
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| Operating lease assets (b) |
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Right of Use Assets |
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2,127 |
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2,233 |
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| Total lease assets |
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$ |
2,136 |
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$ |
2,243 |
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| Liabilities |
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| Current |
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| Finance (a) |
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Accounts payable and accrued liabilities |
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$ |
2 |
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$ |
2 |
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| Operating (b) |
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Accounts payable and accrued liabilities |
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361 |
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365 |
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| Noncurrent |
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| Finance (a) |
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Long-Term Lease Liabilities |
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11 |
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13 |
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| Operating (b) |
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Long-Term Lease Liabilities |
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2,761 |
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2,914 |
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| Total lease liabilities |
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$ |
3,135 |
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$ |
3,294 |
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| (a) |
Finance lease assets are recorded net of accumulated amortization of $12 million and $11 million as of January 31, 2026 and February 1, 2025, respectively. As of both January 31, 2026 and February 1, 2025, finance lease assets included $1 million and noncurrent lease liabilities included $1 million of non-lease components. |
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| (b) |
As of January 31, 2026, operating lease assets included $315 million of non-lease components and current and noncurrent lease liabilities included $36 million and $355 million, respectively, of non-lease components. As of February 1, 2025, operating lease assets included $317 million of non-lease components and current and noncurrent lease liabilities included $36 million and $356 million, respectively, of non-lease components. |
The components of net lease expense, recognized primarily within selling, general and administrative expenses are disclosed below. For 2025, 2024 and 2023, lease expense included $87 million, $89 million and $84 million, respectively, related to non-lease components.
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2025 |
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2024 |
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2023 |
| (millions) |
| Real estate |
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| Operating leases (c) – |
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| Minimum rents |
$ |
361 |
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$ |
375 |
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$ |
372 |
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| Variable rents |
64 |
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63 |
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55 |
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425 |
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438 |
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427 |
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| Less income from subleases – |
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| Operating leases (d) |
(54) |
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(50) |
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(46) |
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$ |
371 |
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$ |
388 |
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$ |
381 |
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| Personal property – Operating leases |
$ |
5 |
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$ |
5 |
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$ |
6 |
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| (c) |
Certain supply chain operating lease expense amounts are included in cost of sales. |
| (d) |
Represents sublease income from certain corporate office locations. |
As of January 31, 2026, the maturity of lease liabilities is as follows:
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Finance
Leases |
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Operating
Leases
(e and f) |
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Total |
| (millions) |
| Fiscal year |
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| 2026 |
$ |
3 |
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$ |
393 |
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$ |
396 |
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| 2027 |
3 |
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374 |
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377 |
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| 2028 |
2 |
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357 |
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359 |
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| 2029 |
2 |
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326 |
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328 |
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| 2030 |
1 |
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322 |
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323 |
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| After 2030 |
8 |
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4,223 |
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4,231 |
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| Total undiscounted lease payments |
19 |
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5,995 |
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6,014 |
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| Less amount representing interest |
6 |
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2,873 |
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2,879 |
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| Total lease liabilities |
$ |
13 |
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$ |
3,122 |
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$ |
3,135 |
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| (e) |
Operating lease payments include $2,396 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $14 million of legally binding minimum lease payments for leases signed but not yet commenced. |
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| (f) |
Operating lease payments include $968 million related to non-lease component payments, with $668 million of such payments related to options to extend lease terms that are reasonably certain of being exercised. |
Additional supplemental information regarding assumptions and cash flows for operating and finance leases is as follows:
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| Lease Term and Discount Rate |
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January 31,
2026 |
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February 1,
2025 |
| Weighted-average remaining lease term (years) |
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| Finance leases |
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10.2 |
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10.8 |
| Operating leases |
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19.3 |
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19.6 |
| Weighted-average discount rate |
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| Finance leases |
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7.12 |
% |
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7.15 |
% |
| Operating leases |
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6.83 |
% |
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6.80 |
% |
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| Other Information |
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52 Weeks Ended January 31, 2026 |
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52 Weeks Ended
February 1, 2025 |
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(millions) |
| Cash paid for amounts included in the measurement of lease liabilities: |
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| Operating cash flows used from operating leases |
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$ |
399 |
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$ |
362 |
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| Financing cash flows used from financing leases |
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3 |
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3 |
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| Leased assets obtained in exchange for new operating lease liabilities |
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48 |
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117 |
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The Company is a guarantor with respect to certain lease obligations associated with The May Department Stores Company and previously disposed subsidiaries or businesses. The leases have future minimum lease payments aggregating approximately $147 million and are offset by payments from existing tenants and subtenants. In addition, the Company is contingently liable for other expenses related to the above leases, such as property taxes and common area maintenance, which are also payable by existing tenants and subtenants. Potential liabilities related to these guarantees are subject to certain defenses by the Company. The Company believes that the risk of significant loss from the guarantees of these lease obligations is remote.
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