Lowe's Companies, Inc. (LOW) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the annual report on Form 10-K for the fiscal year ended January 30, 2026 (fiscal 2025), accession 0000060667-26-000029.

Lowe's is a Fortune 100 company and the world's second largest home improvement retailer. It was founded in 1921 with a single hardware store in North Wilkesboro, North Carolina, incorporated in North Carolina in 1952, and has been publicly held since 1961.

Footprint. 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. Stores average roughly 112,000 square feet of retail selling space plus about 32,000 square feet of outdoor garden center selling space; 16 of the locations are smaller-format Lowe's Outlet stores selling discontinued, overstocked and scratch-and-dent merchandise. In addition, Lowe's operated over 540 branch locations in the United States and Canada, which came with the fiscal 2025 acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG). The company owns and operates more than 120 supply chain facilities, regional, flatbed, import and bulk distribution centers, cross-dock terminals and fulfillment centers.

Customers and market. The home improvement market is highly fragmented. Retail stores and online serve individual homeowners and renters across the DIY and do-it-for-me (DIFM) spectrum. Lowe's also targets Pro customers, historically the small-to-medium Pro across three categories, tradespeople, repair and remodelers, and property managers. The FBM and ADG acquisitions extend that reach to larger Pro customers in residential and commercial markets. Management monitors home price appreciation, age of the housing stock, real disposable personal income, housing turnover, and residential and commercial construction as the key demand indicators.

How it makes money. A typical Lowe's-branded store stocks approximately 37,000 items across the 14 merchandise categories the company reported for fiscal 2025, Appliances, Seasonal & Outdoor Living, Lumber, Lawn & Garden, Hardware, Kitchens & Bath, Building Materials, Rough Plumbing, Paint, Millwork, Tools, Electrical, Flooring and Décor. Fiscal 2025 net sales of $86,286 million split $82,352 million products, $2,542 million services and $1,392 million other. The largest categories were Appliances ($12,891 million, 14.9% of sales), Seasonal & Outdoor Living ($7,065 million), Lumber ($6,680 million) and Lawn & Garden ($6,577 million). Revenue is supplemented by installed sales delivered through independent contractors (concentrated in Kitchens & Bath, Flooring, Appliances, Millwork and Rough Plumbing), by separately priced Lowe's Protection Plans, and by tool and equipment rental.

Channels. Lowe's runs an omnichannel network, in store, online through Lowes.com and mobile apps, on-site through Pro sales managers and the In-Home Sales program, through the branch network, and through contact centers. Fulfillment options include buy-online-pickup-in-store, curbside, touchless lockers, same-day delivery through a gig provider network, and next-day major-appliance delivery to the majority of U.S. zip codes as of fiscal 2025.

Segments. Prior to fiscal 2025, Retail Home Improvement was the company's only operating segment and equalled consolidated results. Following the acquisitions there is still one reportable segment, Retail Home Improvement, with three non-reportable operating segments presented in "Other": FBM's two lines of business, Ceilings and Wall Systems and Commercial Doors and Hardware, and ADG, referred to as Interior Finishes. In fiscal 2025 Retail Home Improvement produced $84,078 million of net sales (97.4% of the total) and $10,223 million of operating income (12.16% of segment sales); Other produced $2,208 million of net sales and a $70 million operating loss. The chief operating decision maker is the Chairman, President and CEO, who reviews operating income by segment; corporate expenses are allocated to the operating segments.

Acquisitions completed in fiscal 2025.

• Artisan Design Group (ADG), completed June 2, 2025 for an aggregate cash purchase

price of $1.3 billion. ADG is a nationwide provider of design, distribution and installation services for interior surface finishes, including flooring, cabinets and countertops, sold to national, regional and local home builders and property managers. Intangible assets acquired totalled $714 million (trademarks $130 million over 15 years, customer relationships $550 million over 20 years, backlog $26 million, non-competes $8 million over 5 years) with goodwill of $366 million, of which $302 million is expected to be tax deductible. Net assets acquired: $1,300 million.

• Foundation Building Materials (FBM), completed October 9, 2025 for an aggregate

cash purchase price of $8.8 billion. FBM is a leading distributor of interior building products, and is expected to accelerate the Total Home strategy through expanded Pro capabilities, faster fulfillment, digital tools, a trade credit platform and cross-selling. Intangible assets acquired totalled $5,041 million (trademarks $950 million over 15 years, customer relationships $3,920 million over 20 years, backlog $75 million, non-compete $96 million over 5 years) with goodwill of $3,254 million, of which $993 million is expected to be tax deductible. Net assets acquired: $8,778 million. FBM made additional asset acquisitions of approximately $49 million after October 9, 2025.

Because FBM was acquired in October 2025, management excluded it from its first assessment of internal control over financial reporting; FBM represented 4.5% of consolidated total assets (excluding goodwill and intangibles) and 1.5% of consolidated net sales for fiscal 2025.

Workforce. Minimum wage starts at $15 per hour as of fiscal 2025. More than 85% of store leadership positions were filled internally during the year. Programs include Lowe's University, the Track to the Trades apprentice-certification program, and a tuition-free education program. A limited number of employees at FBM are represented by labor unions. Lowe's also has support offices in India and China.

Capital markets. Common stock trades on the NYSE under "LOW"; there were 19,110 holders of record as of March 19, 2026 and 560,063,429 shares outstanding. The Board authorized an additional $15.0 billion of share repurchases with no expiration on December 7, 2022.

Risk factors

Condensed from Item 1A of the Form 10-K for fiscal 2025, accession 0000060667-26-000029. The Form 10-Q for the quarter ended July 31, 2026 reports no material changes to these risks.

Strategic, competitive, operational and reputational

• Adapting the business concept. Home improvement retail is evolving quickly. Failure to

read economic, style and demographic trends, to localize assortments, and to meet Pro customers' expectations for assortment, sales support and credit options could cost market share.

• Omnichannel execution. Delivering large, complex technology programs requires new

competencies and skilled technology professionals in a competitive labor market. Failure to deliver a consistent cross-channel experience, or to keep pace with competitors' innovations, could force write-downs of technology investments.

• Competition. Lowe's faces national and regional home improvement chains, lumber yards,

hardware and specialty retailers, warehouse clubs, online retailers, rental providers, installers and wholesalers. Competitors' faster or lower-cost delivery, better use of AI and machine learning, or promotional and liquidation pricing can take share.

• Talent. Associates must be knowledgeable across expanding skill sets; wage inflation,

benefit costs, high turnover in entry-level and part-time roles, immigration and labor regulation, senior-management succession, and union organizing efforts (including at FBM) all bear on labor cost and service quality.

• Reputation and brand. Actual or perceived positions on social, environmental and policy

issues, failure to meet stated objectives, vendor conduct, and social-media amplification can erode trust quickly. The filing notes Lowe's has been subject to media criticism and negative campaigns related to certain initiatives, including diversity and inclusion initiatives and changes to them.

• Product and service quality. Safety or quality shortfalls, or vendor non-compliance with

the Vendor Code of Conduct, have in the past resulted in costly recalls, customs actions and enforcement, and can create litigation and reputational exposure.

• Store base and inventory. Stores require continued maintenance, investment and space

reallocation; inventory levels must track demand; higher shrink rates, including from organized retail crime, raise costs and can degrade the customer and associate experience.

Supply chain and third parties

• Disruption and trade policy. Lowe's sources directly and indirectly from foreign

manufacturers, with China and Mexico the dominant import sources. Tariffs, customs actions and changes to agreements such as the USMCA raise merchandise cost and can hit net sales, gross margin, the effective tax rate, liquidity and net income; retaliatory measures and second-order effects (slower growth, inflation, higher rates) compound the exposure. Port congestion, labor disputes, weather, geopolitical conflict and freight cost volatility are all outside the company's control.

• Supply chain transformation. The multi-year network transformation could disrupt

operations, cost more than planned, or fail to deliver the anticipated benefits.

• Supplier and vendor concentration. Lowe's relies on sole or primary vendors for some

products and on independent providers for technology and other services; a failure it cannot quickly replace would disrupt operations.

• Third-party installers. As general contractor, Lowe's carries licensing and permitting

obligations and the compliance risk of its installers. Government investigations, including one on recordkeeping and lead-safe practices, can lead to fines, lawsuits, reputational damage and potential loss of general contractor licenses.

Technology and cybersecurity

• Systems disruption, and the multi-year technology transformation now modernizing

distribution, replenishment and certain accounting and finance systems, can introduce delays, data loss and increased cost.

• Customer-facing systems (Lowes.com, mobile apps) are important sales channels; outages,

capacity constraints or attacks damage both sales and brand perception.

• Cybersecurity incidents: Lowe's and its third-party service providers have experienced

threats and incidents in the normal course, and certain service providers have been disrupted by ransomware and other attacks. Management does not believe any such incident has been material to date, but gives no guarantee for the future. Cyber insurance is carried and may be insufficient. Expanding data-privacy regulation raises compliance cost.

• Payments risk across cards, trade credit, digital wallets, gift cards and buy-now-pay-later;

national outages at a third-party credit and debit processor have resulted in lost sales.

• Growing use of predictive and generative AI introduces algorithm, data-set and regulatory

risk, plus competitive disadvantage if rivals deploy AI more effectively.

Investment-related

• Strategic transactions. Lowe's regularly pursues mergers, acquisitions, joint ventures

and expansion, FBM and ADG in 2025 are named, expecting sales gains, cost savings and synergies. Realizing them depends on integrating personnel, labor models, and financial and IT systems; integration adds complexity to internal controls and could cause the company to fail its financial reporting obligations. Lowe's has recognized material impairments in the past and may again. Such transactions may be financed with additional debt, increasing leverage and affecting future access to capital.

Legal, regulatory and other external

• Macroeconomy. Sales depend on the health of the general economy, slow growth or

recession, home price appreciation and housing turnover, age of housing stock, market liquidity and borrowing cost, real disposable personal income, inflation, interest rates, consumer debt, tax policy, fuel and commodity prices. In fiscal 2025 Lowe's continued to operate with inflationary pressure and affordability concerns weighing on discretionary consumer spending.

• Weather and catastrophic events. Hurricanes, storms, fires, floods, tornadoes,

earthquakes, unseasonable temperatures and public-health events can disrupt stores, the supply chain and the workforce, and can render inventory unsellable, while also, at times, spiking demand the company must be able to meet.

• Climate change. Physical risks (extreme weather, rising sea levels) and transition

risks (regulation, technology) may raise commodity, energy and compliance costs.

• Laws and regulation. Expanded enforcement or new rules on wages, worker classification,

health care, data privacy, product pricing, transportation, international trade, responsible sourcing, taxes and climate could raise the cost of doing business.

• Litigation. Consumer, commercial, employment and tort litigation and regulatory

inquiries arise in the ordinary course; the 10-K states none of the proceedings in which the company was then involved were considered material, individually or collectively.

• Commodity prices. Lumber, copper, energy and other raw material prices are historically

volatile, and the ability to pass changes through affects both demand and sales.

• Tax matters and access to capital. Liquidity depends on credit strength; a ratings

downgrade or deterioration in financial ratios could restrict access to public debt markets and raise the cost of funds.

Cybersecurity governance. Oversight is shared by the Board and the Audit Committee, which is primarily responsible for cybersecurity, data protection, privacy and emerging technology risk. The CISO reports to the Chief Digital and Information Officer, who reports directly to the Chairman, President and CEO. Lowe's leverages NIST security frameworks, maintains an incident response plan and a dedicated security operations center, runs phishing simulations and tabletop and red team exercises, and carries cybersecurity insurance. An AI Governance Committee oversees enhancements to the AI governance framework.

Management's discussion and analysis, fiscal 2025 (year ended January 30, 2026)

From Item 7 of the Form 10-K, accession 0000060667-26-000029.

Headline results. Net sales rose 3.1% to $86.3 billion, driven by sales from the year's acquisitions plus a 0.2% increase in comparable sales, a 3.0% rise in comparable average ticket partly offset by a 2.8% decline in comparable customer transactions. Reported quarterly comps were −1.7%, +1.1%, +0.4% and +1.3%. Net earnings fell 4.4% to $6.7 billion and diluted EPS fell 3.1% to $11.85 from $12.23.

Two items straddle the comparison. Fiscal 2025 carried $321 million of pre-tax expense, transaction costs and intangible amortization from ADG and FBM, reducing diluted EPS by $0.43. Fiscal 2024 carried $177 million of pre-tax income from realized gains on contingent consideration tied to the fiscal 2022 sale of the Canadian retail business, which added $0.24. Adjusted for both, adjusted diluted EPS rose 2.4% to $12.28 from $11.99.

Margins. Gross margin improved 16 basis points to 33.48% of sales, on favorable credit revenue and better inventory shrink, partly offset by the operational cost structure of the 2025 acquisitions. SG&A deleveraged 72 basis points to 19.46%, driven by employee compensation and benefits and by cycling the prior-year contingent-consideration gains, again partly offset by the acquisitions' cost structure. Depreciation and amortization deleveraged 18 basis points to 2.25%, chiefly from amortizing acquired intangibles. Net interest expense of $1,406 million (versus $1,313 million) deleveraged six basis points. The effective tax rate was 23.9%, against 24.0% in fiscal 2024. Operating margin finished at 11.77%, down 74 basis points.

Category and channel mix. Five of 14 product categories posted comparable sales increases, Rough Plumbing, Appliances, Building Materials, Lawn & Garden and Paint, reflecting Pro and online growth and next-day appliance delivery coverage. Online sales added approximately 105 basis points to comparable sales, against 50 basis points in fiscal 2024 and 25 in fiscal 2023.

Strategy. Management describes progress across all five initiatives of the Total Home strategy, with strength in Pro, online and home services. The FBM and ADG acquisitions are framed as the move to serve the large Pro customer with "everything they need for the interior space of the home" and to position the company for a housing recovery. Alongside them, the Perpetual Productivity Improvement (PPI) program completed the front-end transformation rollout across the store portfolio, streamlined Freight Flow, and drove inventory productivity while navigating trade policy and tariffs. Heading into fiscal 2026, with the housing macro still volatile, management's stated focus is PPI and controlling the controllable.

Cash flow and capital. Operating cash flow was $9.9 billion; the increase over the prior year came mainly from merchandise inventory changes from inventory optimization, partly offset by lower net earnings and the timing of income tax payments previously deferred under IRS relief for businesses affected by Hurricane Helene. Capital expenditures were $2.2 billion (fiscal 2024: $1.9 billion), with fiscal 2026 guidance of approximately $2.5 billion. Investing activities were dominated by the $10.1 billion used for the ADG and FBM acquisitions. Dividends paid were $2.6 billion, and the quarterly dividend was raised 4% to $1.20 per share in the third quarter of fiscal 2025.

Liquidity and debt. At January 30, 2026 Lowe's held $1.0 billion of cash and equivalents plus $5.0 billion of undrawn capacity on its Revolving Credit Facilities. During fiscal 2025 the company issued $5.0 billion of unsecured notes and entered a $2.0 billion unsecured term loan maturing October 2028 (the 2025 Term Loan), with proceeds designated in part to finance the FBM acquisition; it repaid $2.5 billion of senior notes at maturity ($450 million in fiscal 2024). It also entered a $2.0 billion five-year credit agreement maturing September 2030 (replacing the 2021 agreement), amended the 2023 Credit Agreement ($2.0 billion, maturing September 2028, removing the SOFR credit spread adjustment), and added a $1.0 billion 364-day revolving credit agreement maturing September 2026. There were no outstanding borrowings under the commercial paper program or the Long-Term Credit Agreements at either year end. $10.8 billion remained under the share repurchase authorization, and the company paused its share repurchase program during fiscal 2025.

Returns. Return on invested capital, a non-GAAP measure, was 26.1% in fiscal 2025 against 32.0% in fiscal 2024 and 36.4% in fiscal 2023; net earnings to average debt and shareholders' deficit was 22.1%.

Critical estimates. The LCNRV inventory reserve rose about $7 million to $229 million, and the inventory shrink reserve rose about $9 million to $436 million. A 10% change in either the inventory subject to markdown or the weighted average estimated loss rate would each have moved net earnings by roughly $17 million; a 10% change in the estimated shrinkage rate would have moved it by roughly $33 million. Vendor funds are recorded as a reduction to inventory cost as earned.

Current quarter, second quarter of fiscal 2026 (three months ended July 31, 2026)

From the Form 10-Q for the quarter ended July 31, 2026, accession 0000060667-26-000117, and the earnings release furnished on Form 8-K dated August 19, 2026, accession 0000060667-26-000113.

Results. Net sales rose 8.3% to $26.0 billion ($25,956 million) from $23,959 million, with comparable sales up 0.2%, comparable average ticket +2.3%, comparable transactions −2.1%. For the six months, net sales rose 9.2% to $49.0 billion ($49,034 million) with comps up 0.4%. Net earnings were essentially flat at $2.4 billion ($2,399 million versus $2,398 million) and diluted EPS was $4.27 in both quarters. The quarter carried $96 million of pre-tax intangible amortization from FBM and ADG; excluding it, adjusted diluted EPS was $4.40, up 1.6% from $4.33. Both reported and adjusted EPS include an $0.11 benefit from IEEPA tariff refunds. Six-month diluted EPS was $7.17 (adjusted $7.42) against $7.19 (adjusted $7.25).

What moved margin. Gross margin fell 77 basis points to 33.04% of sales, on the operational cost structure of the 2025 acquisitions and higher fuel costs, partly offset by favorable credit revenue and tariff refunds. SG&A leveraged 25 basis points to 17.17%, which the company attributes to that same acquired cost structure, it weighs on gross margin while lowering SG&A as a percentage of sales. Depreciation and amortization deleveraged 29 basis points to 2.20% from acquired intangible amortization, intangible amortization expense was $98 million in the quarter against $12 million a year earlier, and $198 million for the six months against $15 million. Net interest deleveraged 13 basis points, reflecting the September 2025 debt issuance and the 2025 Term Loan. Operating margin was 13.67%, down 81 basis points. The effective tax rate was 24.4% (24.0% a year earlier); six-month rate 24.5% versus 24.0%.

Demand backdrop. Management describes a dynamic home improvement environment with persistent pressure in discretionary DIY demand, periods of challenging weather, elevated fuel prices and broader economic uncertainty; customers remained cautious and prioritized repair, maintenance and smaller projects. Against that, nine of 13 product categories posted positive comparable sales, led by Rough Plumbing, Electrical, and Tools & Hardware. The company reports 13 product categories in fiscal 2026, grouped into the Hardlines, Home Décor and Building Products merchandise divisions, against the 14 categories listed in the annual report; prior-period division sales were reclassified to conform to the current presentation. Online sales grew 15.7% and contributed approximately 195 basis points to comparable sales (85 basis points a year earlier). The CEO characterized it as the fifth consecutive quarter of positive comparable sales, led by Pro, Online and Home Services. Monthly comps ran −0.4% in May, +1.7% in June and −1.2% in July, and 8 of 15 regions delivered positive comp growth. By ticket size, comps were −1.4% under $100, −0.7% for $100–$500, and +2.7% above $500.

Segments. Retail Home Improvement net sales were $24,015 million (up from $23,821 million) with operating income of $3,546 million, 14.77% of segment sales (from 14.59%). "Other", FBM's Ceilings and Wall Systems and Commercial Doors and Hardware, plus ADG's Interior Finishes, added $1,941 million of net sales (from $138 million a year earlier, when only ADG was owned) and $3 million of operating income. FBM and ADG results are consolidated on a one-month lag because of differing reporting calendars.

Store base. 1,761 retail stores at July 31, 2026 (1,753 a year earlier), 196 million sales floor square feet, average selling square footage of 111 thousand per store. Customer transactions were 219 million (from 225 million); average ticket $107.90 (from $105.49).

Tariffs. The U.S. Supreme Court declared on February 20, 2026 that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were invalid. Effective April 20, 2026, U.S. Customs and Border Protection opened a platform for eligible importers of record to request IEEPA tariff refunds. Lowe's accounts for the refunds as a gain contingency under ASC 450-30, recognizing them only when realized or realizable; it recognized approximately $80 million of IEEPA tariff refunds in the second quarter. Uncertainty remains as to the amount and timing of future collections. Lowe's is the importer of record for certain products and pays tariffs directly.

Acquisition accounting. ADG's purchase price allocation is now finalized, with measurement period adjustments during fiscal 2026 immaterial. FBM's allocation remains preliminary as of July 31, 2026, primarily for income taxes and any resulting change to residual goodwill; fiscal 2026 measurement period adjustments were immaterial. All other acquisitions completed in fiscal 2026 and fiscal 2025 were immaterial individually and in aggregate. Total intangible assets stood at $5,709 million net at July 31, 2026.

Liquidity and capital. Cash and equivalents were $3.2 billion at July 31, 2026, with $5.0 billion of undrawn capacity on the Revolving Credit Facilities and no commercial paper outstanding. Six-month operating cash flow was approximately $7.0 billion, down year over year on the timing of prior-year income tax payments and other working capital changes. Capital expenditures were $1,063 million for the six months (from $1,013 million), against full-year guidance of approximately $2.5 billion. The company paid $1.3 billion in dividends and repaid $2.4 billion of bond maturities over the first six months, which management frames as progress toward its deleveraging commitment. Dividends paid per share rose from $2.30 to $2.40 for the six months; dividends declared per share were $1.25 in the quarter (from $1.20) and $673 million was paid out during the quarter. $10.5 billion remained under the repurchase authorization at July 31, 2026, down from the $10.8 billion available at the fiscal 2025 year end because the share repurchase program resumed in fiscal 2026 after the fiscal 2025 pause: 1.2 million shares were bought under the program for $302 million in the first six months, all of it in the first quarter, and the settlement-date share-repurchase table shows $366 million paid for repurchases in the six months against $113 million a year earlier. No shares at all were bought under the program in the second quarter, that quarter's only repurchases were shares withheld from employees for tax and option-exercise obligations. Lowe's carries a total shareholders' deficit of $7.4 billion at July 31, 2026, the result of repurchases over the years exceeding accumulated earnings and leaving an accumulated deficit on the balance sheet, alongside total debt outstanding of $37.6 billion ($35.2 billion long-term plus $2.4 billion of current maturities). The 2025 Term Loan had $2.0 billion outstanding at an interest rate of 4.648%. The September 2025 Notes total $5.0 billion: $650 million at 3.950% due October 2027, $750 million at 4.000% due October 2028, $1,100 million at 4.250% due March 2031, $1,300 million at 4.500% due October 2032, and $1,200 million at 4.850% due October 2035. Supplier-financed payment obligations included in accounts payable were $1,582 million. Debt ratings as of August 27, 2026 were BBB+ (S&P) and Baa1 (Moody's) on senior debt, both with a stable outlook. Trailing-four-quarter return on invested capital was 25.5%, down from 29.5%.

Legal. The long-running U.S. Attorney / EPA investigation of Lowe's third-party installer program under the Toxic Substances Control Act and the EPA's Lead Renovation, Repair and Painting Rules is resolved. On November 25, 2025, without admitting liability, Lowe's agreed to pay a civil penalty of $12.5 million and to enter a second consent decree replacing the 2014 decree. The District Court for the Central District of California approved it on July 8, 2026 after a public comment period, and the second consent decree has now become final.

Outlook. With the second-quarter results Lowe's updated its fiscal 2026 outlook to reflect first-half results and current demand trends. The outlook includes the tariff refunds recognized in the second quarter and excludes any additional refunds in the second half:

Management's stated priorities from here are delivering value, serving customers across Pro, Online and Home Services, disciplined expense management, continued FBM and ADG integration, and investment in initiatives positioned for long-term growth as market conditions improve.

Subsequent events

The Form 10-Q for the quarter ended July 31, 2026 (accession 0000060667-26-000117) contains no subsequent-events note. The one post-period disclosure the company made between the July 31, 2026 quarter end and the August 27, 2026 filing date was the second-quarter earnings release and accompanying infographic furnished on Form 8-K dated August 19, 2026 (accession 0000060667-26-000113), which reported the results summarized above and updated the fiscal 2026 outlook. No acquisition, divestiture, financing, borrowing or litigation development after July 31, 2026 is disclosed in either filing.

The annual report's own subsequent-events note (Note 19 to the fiscal 2025 financial statements, accession 0000060667-26-000029) covered the tariff litigation that has since been reflected in the interim results: on February 20, 2026 the Supreme Court declared IEEPA tariffs invalid as exceeding the President's authority, and on March 4, 2026 the Court of International Trade ordered U.S. Customs and Border Protection to liquidate all non-final entries without regard to IEEPA duties. At the time of the annual report Lowe's was unable to reasonably estimate the effect on its financial position, results of operations or cash flows for the fiscal year ending January 29, 2027; the second quarter of fiscal 2026 recognized approximately $80 million of refunds under those rulings.