Property and equipment, including assets acquired under finance leases, is depreciated using the straight-line method over estimated useful lives or lease terms if shorter. We amortize leasehold improvements purchased after the beginning of the initial lease term over the shorter of the assets' useful lives or a term that includes the remaining initial lease term, plus any renewals that are reasonably certain at the date the leasehold improvements are acquired. Total depreciation expense, including depreciation expense included in Cost of Sales, was $3.1 billion, $3.0 billion, and $2.8 billion for 2025, 2024, and 2023, respectively. For income tax purposes, accelerated depreciation methods are generally used. Repair and maintenance costs are expensed as incurred. Facility pre-opening costs, including supplies and payroll, are expensed as incurred.


Property and Equipment, Net (millions)	January 31, 2026		February 1, 2025
Land	$	7,023	$	6,735
Buildings and improvements	40,418		38,752
Fixtures and equipment	9,294		8,917
Computer hardware and software	4,101		3,710
Construction-in-progress	1,303		1,185
Accumulated depreciation	(28,390)		(26,277)
Property and equipment, net	$	33,749	$	33,022

We review long-lived assets for impairment when performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or supply chain facility, discontinue a project, or make significant software changes—indicate that the asset's carrying value may not be recoverable. We recognized impairment losses of $69 million, $68 million, and $102 million during 2025, 2024, and 2023, respectively. For asset groups classified as held for sale, measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair value. We estimate fair value by obtaining market appraisals, obtaining valuations from third-party brokers, or using other valuation techniques. Impairments are recorded in SG&A Expenses.