Lowe’s Cos. Inc. (LOW)

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 Lowe’s is entitled to in exchange for those goods and services.

Revenue from products primarily relates to in-store and online merchandise purchases, which are recognized at the point in time when the customer obtains control of the merchandise, which is at the time of in-store purchase or delivery of the product to the customer. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded. Under ASU 2014-09, the merchandise return reserve is presented on a gross basis, with a separate asset and liability included in the consolidated balance sheets as of reporting periods after February 2, 2018. Reporting periods prior to the adoption of ASU 2014-09 reflect merchandise return reserves on a net basis. As of February 1, 2019, anticipated sales returns of $194 million are reflected in other current liabilities, and the associated right of return assets of $127 million are reflected in other current assets. As of February 2, 2018, the merchandise return reserve, net of the associated asset, was $71 million reflected in other current liabilities.

Revenues from services primarily relate to professional installation services Lowe’s provides through subcontractors related to merchandise purchased by a customer. In certain instances, installation services include materials provided by the subcontractor, and both product and installation are included in service revenue. Lowe’s recognizes revenue associated with services as they are rendered, and the majority of services are completed less than one week from initiation.

Deferred revenue is presented for merchandise that has not yet transferred control to the customer and for services that have not yet been provided, but for which tender has been accepted. Deferred revenue is recognized in sales either at a point in time when the customer obtains control of merchandise through pickup or delivery, or over time as services are provided to the customer. Deferred revenues associated with amounts received for which customers have not taken possession of the merchandise or for which installation has not yet been completed were $790 million at February 1, 2019 and $831 million at February 2, 2018. The majority of revenue for goods and services is recognized in the quarter following revenue deferral.

Source: 10-K (filing date: 2019-04-02).

Lowe’s Cos. Inc., Income Statement, Revenues

USD $ in millions

	12 months ended	Feb 1, 2019		Feb 2, 2018		Feb 3, 2017		Jan 29, 2016		Jan 30, 2015		Jan 31, 2014
	Lumber & Building Materials
	Appliances
	Seasonal & Outdoor Living
	Tools & Hardware
	Fashion Fixtures
	Rough Plumbing & Electrical
	Lawn & Garden
	Millwork
	Paint
	Flooring
	Kitchens
	Home Fashions
	Other
	Net sales

Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).