Lowe's Companies, Inc. is a leading home improvement retailer operating 1,746 stores in the United States as of February 2, 2024, focusing on providing a comprehensive range of products and services for both professional customers and individual homeowners **[0000060667-24-000033_low-20240202.htm:3]**. The company offers a wide array of products across several categories, including Appliances, Seasonal & Outdoor Living, Lumber, Lawn & Garden, Kitchens & Bath, Hardware, Building Materials, Millwork, Paint, Rough Plumbing, Tools, Electrical, Flooring, and Décor **[0000060667-24-000033_low-20240202.htm:5]**. Lowe's emphasizes its Total Home strategy, aiming to provide a one-stop solution for home improvement needs, catering to both DIY and professional customers **[0001193125-24-100050_d467523ddef14a.htm:4]**.

1. **Home Décor** - Offers a variety of products including Appliances, Décor, Flooring, Kitchens & Bath, and Paint, catering to aesthetic and functional home improvement needs.
2. **Building Products** - Provides essential materials such as Lumber, Building Materials, and Millwork for construction and renovation projects.
3. **Hardlines** - Supplies Tools, Hardware, Electrical, and Rough Plumbing products for both professional and DIY projects.
4. **Seasonal & Outdoor Living** - Features products for outdoor spaces, including Lawn & Garden equipment and seasonal items to enhance outdoor living areas.

e200a7f1ff436e3c75ee6637720dc7a3af3d2c6e3cbd1251e17c454a5841efb9

| Metric [Unit: $ Million] | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Home Décor               | 5,235  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | 8,725  **[0000060667-23-000139_low-20230804.htm:8]**  | N/A     | N/A     | N/A     | N/A     | 7,541  **[0000060667-24-000169_low-20241101.htm:8]**  |
| Hardlines                | N/A     | N/A     | 8,348  **[0000060667-23-000139_low-20230804.htm:8]**  | N/A     | N/A     | N/A     | N/A     | 5,326  **[0000060667-24-000169_low-20241101.htm:8]**  |
| Building Products        | 5,080  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | 7,245  **[0000060667-23-000139_low-20230804.htm:8]**  | N/A     | N/A     | N/A     | N/A     | 6,730  **[0000060667-24-000169_low-20241101.htm:8]**  |
| Other                    | 2,600  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | 638  **[0000060667-23-000139_low-20230804.htm:8]**    | N/A     | N/A     | N/A     | N/A     | 573  **[0000060667-24-000169_low-20241101.htm:8]**  |
| Appliances               | 13,508  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 12,344  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Seasonal & Outdoor Living| 8,860  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 7,740  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Lumber                   | 9,499  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 7,020  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Lawn & Garden            | 8,639  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 6,729  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Kitchens & Bath          | 7,010  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 6,167  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Hardware                 | 4,522  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 5,828  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Building Materials       | N/A     | N/A     | N/A     | N/A     | 5,245  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Millwork                 | 5,759  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 5,181  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Paint                    | 5,425  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 5,118  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Rough Plumbing           | 5,376  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 4,971  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Tools                    | 5,168  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 4,723  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Electrical               | 5,334  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 4,478  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Flooring                 | 5,044  **[0000060667-23-000034_low-20230203.htm:88]**  | N/A     | N/A     | N/A     | 4,327  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |
| Décor                    | N/A     | N/A     | N/A     | N/A     | 4,175  **[0000060667-24-000033_low-20240202.htm:93]**  | N/A     | N/A     | N/A     |

e4a1d67061a0058b0339610a6795d7fdfa0bd04fe9c5a099c473fcfaed883b30

| Metric / Quarter               | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|--------------------------------|---------|---------|---------|---------|---------|---------|---------|
| Total Customer Transactions    | **214** **[0000060667-23-000114_low-20230505.htm:16]** | **244** **[0000060667-23-000139_low-20230804.htm:16]** | **197** **[0000060667-23-000164_low-20231103.htm:21]** | **835** **[0000060667-24-000033_low-20240202.htm:41]** | **208** **[0000060667-24-000085_low-20240503.htm:14]** | **230** **[0000060667-24-000140_low-20240802.htm:16]** | **194** **[0000060667-24-000169_low-20241101.htm:16]** |
| Average Ticket ($)             | **$104.44** **[0000060667-23-000114_low-20230505.htm:16]** | **$102.35** **[0000060667-23-000139_low-20230804.htm:16]** | **$101.49** **[0000060667-23-000159_exhibit992-11032023.htm:0]** | **$100.45** **[0000060667-24-000012_exhibit992-02022024.htm:0]** | **$102.52** **[0000060667-24-000081_exhibit992-05032024.htm:0]** | **$102.71** **[0000060667-24-000140_low-20240802.htm:16]** | **$103.80** **[0000060667-24-000169_low-20241101.htm:16]** |

20e9391d4d32227cc4a30361522942bd11e021916934b46cfed1d1fcb4f75f6f

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

074c2d4356a330df8dd2b75d57f29cf0e0a437757c12055f3fc96cefa7c48e4f

1. Given the continued softness in DIY discretionary demand, particularly in big-ticket categories, what specific strategies are you implementing to stimulate DIY sales and mitigate the impact on overall comparable sales?  **[LOW_3399366_6]** **[LOW_3399366_1]** 

2. Unfavorable weather has pressured traditional spring seasonal categories; how are you adjusting your inventory and merchandising strategies to better align with consumer demand and reduce the risk of excess inventory in these areas?  **[LOW_3399366_6]** **[LOW_3399366_1]** 

3. With major e-commerce players enhancing delivery times in rural markets, how do you plan to address potential competitive pressures from faster delivery options, especially in rural areas where you've been testing unique initiatives?  **[LOW_3399366_8]** **[LOW_3399366_0]** 

4. While you've delivered positive comps in Pro, the DIY segment appears to be underperforming; what measures are you taking to improve DIY performance and ensure you are not losing market share in this key segment?  **[LOW_3399366_6]** **[LOW_3399366_8]** **[LOW_3399366_20]** 

5. Considering the current interest rate environment and its dampening effect on big-ticket discretionary projects, how are you planning to navigate these macroeconomic challenges, and what contingencies are in place if the anticipated recovery in DIY demand is delayed?  **[LOW_3399366_6]** **[LOW_3399366_20]** **[LOW_3399366_21]** 

0c9acfa42d57958715c339a3b892cd611db26033bbe3a864e4c7dd74dae5ca8a

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

53f8385b1b1d47440c7dfef51095d5ac8b732786873f2381979a7eab3da4db48

f7c5d17d69545159f31e52f21db0117e7fdf0b09991fdcef856ce81b2ee5cb77

e4f20b6fe5296200321824ff9effb486d8e73d6f38005f97114c3801a1a0505d

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2024
  - **Sales**: $84 billion to $85 billion  **[LOW_3375174_8]** .
  - **Comparable Sales Decline**: 2% to 3%  **[LOW_3375174_8]** .
  - **Operating Margin**: 12.6% to 12.7%  **[LOW_3375174_8]** .
  - **Earnings Per Share (EPS)**: $12 to $12.30  **[LOW_3375174_8]** .
  - **Gross Margin**: Roughly flat compared to 2023  **[LOW_3375174_13]** .
  - **Capital Expenditures**: Approximately $2 billion  **[LOW_3375174_9]** .
  - **Dividend Payout Ratio**: Targeted at 35%  **[LOW_3375174_9]** .
  - **Debt Repayment**: Plan to repay a $450 million bond maturity  **[LOW_3375174_9]** .
  - **Share Repurchases**: Excess cash will be returned to shareholders through share repurchases  **[LOW_3375174_9]** .
  - **First Half Comp Sales**: Expected to remain under pressure, with first quarter comp sales approximately 300 basis points below the bottom of the full-year guide  **[LOW_3375174_9]** .
  - **First Quarter Operating Margin Rate**: Expected to be approximately 200 basis points below the prior year adjusted rate  **[LOW_3375174_9]** .

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2024
  - **Sales**: $84 billion to $85 billion  **[LOW_3390248_7]** .
  - **Comparable Sales**: Down 2% to 3%, with Pro sales outpacing DIY  **[LOW_3390248_7]** .
  - **Operating Margin**: 12.6% to 12.7%  **[LOW_3390248_7]** .
  - **Earnings Per Share (EPS)**: $12 to $12.30  **[LOW_3390248_7]** .
  - **Second Quarter Comparable Sales**: Expected to be roughly in line with the first quarter and anticipate improvement in the second half of the year  **[LOW_3390248_7]** .

### Q2 2025 Earnings Call
- **Issued Period**: Q2 2025
- **Guided Period**: FY 2024
  - **Sales**: $82.7 billion to $83.2 billion  **[LOW_3399366_7]** .
  - **Comparable Sales**: Down 3.5% to 4%  **[LOW_3399366_7]** .
  - **Adjusted Operating Margin**: 12.4% to 12.5%  **[LOW_3399366_7]** .
  - **Net Interest Expense**: Approximately $1.4 billion  **[LOW_3399366_7]** .
  - **Capital Expenditures**: Approximately $2 billion  **[LOW_3399366_7]** .
  - **Adjusted Effective Income Tax Rate**: Approximately 24.5%  **[LOW_3399366_7]** .
  - **Adjusted Diluted Earnings Per Share**: $11.70 to $11.90  **[LOW_3399366_7]** .
  - **Third and Fourth Quarter Comparable Sales**: Expected to be roughly 200 basis points better than the second quarter results  **[LOW_3399366_8]** .
  - **Operating Margin Rate for the Second Half**: Expected to be roughly in line with the prior year, with Q3 approximately 70 basis points below the prior year rate and Q4 approximately 50 basis points above the prior year rate  **[LOW_3399366_8]** .

### Q3 2025 Earnings Call
- **Issued Period**: Q3 2025
- **Guided Period**: N/A
  - The documents do not provide information about the guidance from the Q3 2025 earnings call for Lowe's (LOW). The available information is from the Q2 2025 earnings call.

3cee81923b86cd428838eb13db07c13d84e2b5e32989b49359216b71734e1dad

- National and regional home improvement warehouse chains and lumber yards  **[0000060667-24-000033_low-20240202.htm:4]** 
- Traditional hardware, plumbing, electrical, and home supply retailers  **[0000060667-24-000033_low-20240202.htm:4]** 
- Paint stores, lumber yards, garden centers, and maintenance and repair organizations  **[0000060667-24-000033_low-20240202.htm:4]** 
- General merchandise retailers, home goods specialty stores, warehouse clubs, online retailers, and other specialty retailers  **[0000060667-24-000033_low-20240202.htm:4]** 
- Providers of equipment and tool rental, service providers that install home improvement products, and wholesalers that provide home-related products and services to homeowners, renters, businesses, and the government  **[0000060667-24-000033_low-20240202.htm:4]** 
- Online and omnichannel retailers with similar product or service offerings  **[0000060667-24-000033_low-20240202.htm:16]** 

f03d64ede595251966dd5cc93aeaa2c67cb274ad747ad3b981f633f700bf8393

| Program Details           | Program 1       |
|---------------------------|-----------------|
| Approval Date             | **December 7, 2022**  **[0000060667-24-000169_low-20241101.htm:26]**  |
| End Date/Duration         | **N/A**         |
| Total additional amount   | **$15.0 billion**  **[0000060667-24-000169_low-20241101.htm:26]**  |
| Remaining authorization amount | **$12.2 billion**  **[0000060667-24-000169_low-20241101.htm:21]** **[0000060667-24-000169_low-20241101.htm:11]**  |
| Details                   | The program allows for share repurchases in the open market or through private transactions. Shares repurchased are retired and returned to authorized and unissued status. The timing and amount of repurchases depend on market conditions and other factors.  **[0000060667-24-000169_low-20241101.htm:21]** **[0000060667-24-000140_low-20240802.htm:21]** **[0000060667-23-000164_low-20231103.htm:28]**  |

b3d05615fcd68ce37ba8a624fc3c10730c8315109b4da853b57e6583c3f89693

**Annual guidance for FY 2024:**
- **Sales**: $83B to $83.5B  **[LOW_3409383_9]**  (raised from $82.7B to $83.2B  **[LOW_3399366_7]** )  
- **Comparable Sales**: decline of 3% to 3.5%  **[LOW_3409383_9]**  (raised from decline of 3.5% to 4%  **[LOW_3399366_7]** )  
- **Adjusted Operating Margin**: 12.3% to 12.4%  **[LOW_3409383_9]**  (lowered from 12.4% to 12.5%  **[LOW_3399366_7]** )  
- **Net Interest Expense**: $1.3B  **[LOW_3409383_9]**  (lowered from $1.4B  **[LOW_3399366_7]** )  
- **Capital Expenditures**: $2B  **[LOW_3409383_9]**  (no change from $2B  **[LOW_3399366_7]** )  
- **Adjusted Effective Income Tax Rate**: 24.5%  **[LOW_3409383_9]**  (no change from 24.5%  **[LOW_3399366_7]** )  
- **Adjusted Diluted EPS**: $11.80 to $11.90  **[LOW_3409383_9]**  (raised from $11.70 to $11.90  **[LOW_3399366_7]** )  

f93af13a46d8b54f20eb9927ee83c67ab9362f77bbb9a1701f969d1662fb4496

Average Ticket ($)

a19964d695da9e4952c80c8312eaaf3bdbe85ed53aa58a241c2dd1ccbbf1b5b9

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name                  | Position                                                   | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Marvin R. Ellison     | Chairman, President, and Chief Executive Officer           | May 2021           | Marvin R. Ellison has been serving as the Chairman, President, and CEO of Lowe's since May 2021. He joined Lowe's as President and CEO in July 2018. Previously, he held leadership roles at J.C. Penney and The Home Depot  **[0000060667-24-000033_low-20240202.htm:37]** **[0001193125-23-099980_d392221ddef14a.htm:88]** **[0001193125-24-100050_d467523ddef14a.htm:29]** .          |
| William P. Boltz      | Executive Vice President, Merchandising                    | August 2018        | William P. Boltz has been EVP, Merchandising at Lowe's since August 2018. Before Lowe's, he was President and CEO of Chervon North America and held senior positions at The Home Depot  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-23-000034_low-20230203.htm:32]** .                                                  |
| Janice M. Dupré       | Executive Vice President, Human Resources                  | June 2020          | Janice M. Dupré has been EVP, Human Resources at Lowe's since June 2020. She was previously SVP, Talent Management & Diversity at Lowe's and held leadership roles at McKesson Corporation  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-23-000034_low-20230203.htm:32]** .                                              |
| Seemantini Godbole    | Executive Vice President, Chief Digital and Information Officer | September 2022     | Seemantini Godbole is EVP, Chief Digital and Information Officer at Lowe's since September 2022. She was previously EVP, Chief Information Officer at Lowe's and held senior roles at Target Corporation  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-23-000034_low-20230203.htm:32]** .                                |
| Joseph M. McFarland III | Executive Vice President, Stores                          | August 2018        | Joseph M. McFarland III has been EVP, Stores at Lowe's since August 2018. He was previously EVP and Chief Customer Officer at J.C. Penney and held leadership roles at The Home Depot  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-23-000034_low-20230203.htm:32]** .                                                   |
| Juliette W. Pryor     | Executive Vice President, Chief Legal Officer, and Corporate Secretary | May 3, 2023        | Juliette W. Pryor serves as EVP, Chief Legal Officer, and Corporate Secretary at Lowe's since May 3, 2023. She previously held executive legal positions at Albertsons Companies and Cox Enterprises  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-24-000033_exhibit1024_02022024.htm:0]** .                                    |
| Brandon J. Sink       | Executive Vice President, Chief Financial Officer          | April 2022         | Brandon J. Sink has been EVP, Chief Financial Officer of Lowe's since April 2022. He previously held various finance positions at Lowe's, including SVP of Retail Finance and VP of Merchandising Finance  **[0000060667-24-000033_low-20240202.htm:37]** **[0000060667-23-000034_low-20230203.htm:32]** .                               |
| Margrethe R. Vagell   | Executive Vice President, Supply Chain                     | March 2024         | Margrethe R. Vagell is EVP, Supply Chain at Lowe's, starting in March 2024. She was previously SVP, Supply Chain and held other senior positions at Lowe's  **[0000060667-24-000033_low-20240202.htm:37]** .                                                                                  |
| Quonta D. Vance       | Executive Vice President, Pro and Home Services            | June 2023          | Quonta D. Vance is EVP, Pro and Home Services at Lowe's since June 2023. She was previously SVP, Transportation and Final Mile at Lowe's and held leadership roles at The Home Depot  **[0000060667-24-000033_low-20240202.htm:37]** .                                                       |

18b26d8f10631888c5871ccad16265a6422714908fa1c2788470516496befefd

United States

Canada

International

Total Revenue

707ba951b328fe9f02bbd9fe24edf17e63a8e451ebf94b04eb33ecc85a9d6005

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 1962  **[0000060667-24-000033_low-20240202.htm:55]**  | Present  | Current auditor   |

ad74e00da11107663f65198839ecf09f9d272bf033f7a442d145bd3d2e206e44

d7244e5b6c30792243953c3577c46277e6f077da248c229a01b6ae1ca516b12b

- Total Revenue: $20,170 million (-1% YoY)  **[0000060667-24-000169_low-20241101.htm:8]** **[0000060667-24-000169_low-20241101.htm:3]**   
- Operating Income: $2,536 million (**-6% YoY**)  **[0000060667-23-000164_low-20231103.htm:3]** **[0000060667-24-000169_low-20241101.htm:3]**   
- “Other” Segment Revenue: $573 million (**-9% YoY**)  **[0000060667-23-000164_low-20231103.htm:8]** **[0000060667-24-000169_low-20241101.htm:8]**   
- Short-Term Debt: $2,576 million (up from $0 YoY)  **[0000060667-23-000164_low-20231103.htm:4]** **[0000060667-24-000169_low-20241101.htm:4]**   
- Share Repurchases: $759 million (vs. -$525 million in Q3 2024)  **[0000060667-23-000164_low-20231103.htm:6]** **[0000060667-24-000169_low-20241101.htm:14]**   

a2651681355afc712fba42c010dff6b3669f4e2faa59a4f1d8031eb11878058c

36f18b9b24a04e828203a42d73e5095912f33a5e3b44813af36676945b47ccbf

- **Lowe's is gaining market share in the Pro segment**, delivering mid-single-digit positive Pro comps despite a challenging macro environment. This growth is driven by investments in brands, inventory, and services tailored to Pro customers.  **[LOW_3399366_9]**
- **The company is effectively managing inventory**, with inventories declining faster than sales, demonstrating operational efficiency and cost control. This positions Lowe's well to support growth in Pro and manage in a cautious demand environment.  **[LOW_3399366_17]**
- **Lowe's is investing in technology and innovation to enhance capabilities**, such as converting distribution centers for better inventory flow and preparing for market recovery. This strategy positions the company to take market share when the DIY market improves.  **[LOW_3399366_23]**

b382dd26352711412912fe336f699cb8fed3ba09a77a88b6320cdec678a1550f

b73b5d79b7647d03b2f106692351f44a1f5c69996c265edbd0b58c925bf08c19

- **Positive momentum in the Pro segment**, exceeding expectations in core metrics, driven by new capabilities like online quotes for bulk pricing, integrated same-day gig delivery, and streamlined order tracking.  **[LOW_3367856_17]**
- **Sunsetting a 30-year-old operating system** to unlock acceleration in technology advancements over the next 3 to 5 years, which will improve merchandising, operations, supply chain, and drive **profitability irrespective of the macro environment**.  **[LOW_3367856_12]**
- Launch of **Lowe's Lowest Price Guarantee** to attract value-conscious consumers, coupled with strategic promotions and vendor-funded discounts, particularly in appliances, aiming to **maintain flat gross margins** for the year despite consumer shifts.  **[LOW_3367856_18]**

c56baaa85e0113df617a8063f60637abd3a3d4d738c044124088456476d20d6a

1. **Guidance Cut and Market Outlook**  
   **Q:** What's behind the guidance cut?  
   **A:** Management adjusted guidance due to caution over the macro environment and DIY customer sentiment, especially around big-ticket discretionary spending. Elevated interest rates and inflation have DIY customers on the sidelines. They can't predict when the inflection will happen but felt it prudent to adjust guidance.  **[LOW_3399366_11]** 

2. **Margin Outlook and Impacts**  
   **Q:** Why is margin conversion weaker in H2?  
   **A:** The updated full-year operating margin outlook is consistent with their rule of thumb: **14 basis points** of contraction for every point of comp decline. Second-half differences are due to timing of merchandise PPI initiatives and lapping over prior-year incentive compensation. Gross margins are expected to be roughly flat for the full year.  **[LOW_3399366_10]** 

3. **Pro vs. DIY Performance**  
   **Q:** Is Lowe's taking share in Pro and losing in DIY?  
   **A:** Pro business is growing, and they believe they're taking share. In DIY, sales are concentrated in big-ticket discretionary purchases, which were soft. They don't believe they're losing share in DIY; it's more due to macro dynamics affecting big-ticket projects. They feel confident in their assortment, pricing, and marketing.  **[LOW_3399366_9]** **[LOW_3399366_11]** 

4. **Impact of Interest Rates on Demand**  
   **Q:** At what rate level will demand improve?  
   **A:** It's difficult to know at what interest rate consumers will fully engage or how long demand will lag rate cuts. They see pent-up demand but note that consumer sentiment remains weak. They're hopeful that lower rates will relieve pressure and drive existing home sales activity, but many homeowners have mortgages at **4%** or less, so even with decreases, reluctance may remain.  **[LOW_3399366_21]** 

5. **Inventory Management**  
   **Q:** How are you managing inventory amid cautious demand?  
   **A:** Inventory declined **3.3%** year-over-year, outpacing the sales decline. They focus on Pro depth and brands, maintain strong in-stock levels, and manage seasonal inventory based on trends. They've converted distribution centers to be more flow-through, improving turns and overall inventory position.  **[LOW_3399366_17]** 

6. **PPI Initiatives and Expense Management**  
   **Q:** How much room is left in PPI initiatives?  
   **A:** They are proud of progress but only in the middle innings of the productivity journey, with much runway ahead. PPI initiatives are offsetting over **$500 million** in associate wages, inflationary pressures, and strategic investments. The roadmap covers all aspects of the company, and they continue to maintain discipline and drive efficiencies.  **[LOW_3399366_18]** 

7. **Gross Margin Expectations**  
   **Q:** Is gross margin expected to decrease in Q3?  
   **A:** Gross margin is expected to be up in both Q3 and Q4. For the year, they expect it to be roughly flat. PPI initiatives will continue to benefit, accelerating in Q3 and Q4, turning into 2025. Transportation costs continue to be favorable.  **[LOW_3399366_14]** 

8. **Risk of Promotions Impacting Industry**  
   **Q:** Do you see pricing and promotions as a risk?  
   **A:** Promotional activity remains stable. Seasonal offers are standard, and appliance promotions are back to normal. The ticket increase is due to strength in Pro business, not pricing. The pricing environment remains largely stable, and the industry continues to be disciplined and rational.  **[LOW_3399366_12]** 

9. **Long-Term Margin Outlook**  
   **Q:** Is 14.5% operating margin still achievable long term?  
   **A:** The framework still holds, though recent years have been worse than original expectations. They're not calling the turn but believe there's pent-up demand. When they return to mid-single-digit comp growth, they believe they can outpace that with initiatives.  **[LOW_3399366_22]** 

10. **Rural Store Performance**  
    **Q:** Any changes in rural store performance?  
    **A:** Rural markets are performing to expectations. They're piloting unique initiatives, including workwear, pet products, and ATV-related offerings. They feel good about serving all customers with same-day and next-day fulfillment. Rural is a significant part of their growth strategy.  **[LOW_3399366_20]** 

11. **Potential Downside Risks Before Rate Relief**  
    **Q:** Where could the business get weaker before rate relief?  
    **A:** Consumer sentiment, existing home sales, and housing affordability remain concerns. Consumers prefer services over goods, especially in home improvement. Improvement in macro trends should drive a sustained increase in DIY traffic, particularly in big-ticket categories.  **[LOW_3399366_23]** 

12. **Clarification on Q3 Trends**  
    **Q:** How are comps expected to trend in Q3?  
    **A:** Comps are expected to be relatively evenly split between Q3 and Q4. Unfavorable weather in Q2 pressured sales. Current trends are very much in line with guidance for Q3. They tend not to be precise with monthly trends but feel confident current trends reflect guidance.  **[LOW_3399366_13]** **[LOW_3399366_24]** 

13. **Earnings Algorithm and Deleveraging**  
    **Q:** If comps stay negative in '25, will deleverage accelerate?  
    **A:** The operating margin framework still holds. They expect their rule of thumb to hold: **14 basis points** of contraction for every point of comp decline. It's not a natural output but reflects work done across the portfolio.  **[LOW_3399366_15]** 

14. **Incentive Compensation Impacts**  
    **Q:** Did changes in incentive comp impact results?  
    **A:** Incentive compensation is largely consistent. The only notable item was the **$140 million** in discretionary bonuses paid in Q4 last year. Nothing that would significantly change or need to be factored in.  **[LOW_3399366_16]** 

2ab6c9d74aba6792a3911ef17a6f6b034eb440199fd2b804b811966330a936d3

- **Lowe's resilient Pro business and strategic investments position the company for outperformance**, as the Pro segment remains robust and is expected to drive significant growth when the market recovers.  **[LOW_3375174_13]**
- **The company's market-leading supply chain infrastructure provides a competitive advantage**, enabling next-day and two-day delivery of major appliances in virtually every ZIP code, a capability that is difficult to replicate.  **[LOW_3375174_17]**
- **Strong focus on productivity and profitability through Perpetual Productivity Improvement (PPI) initiatives**, which are expected to offset cost pressures and maintain flat gross margins in 2024.  **[LOW_3375174_10]**

c97860e668ac0a734020f8af2a1a144a4c1a082dc4507dfd89878209a79c8499

1. **Margin Sensitivity**  
   **Q:** How sensitive are margins to changes in comp sales?  
   **A:** Brandon explained they've established a flow-through rule: for every 1% increase in comp sales above their guidance, they expect about **10 basis points** of margin expansion, and for every 1% decrease below guidance, about **15 basis points** of margin contraction.  **[LOW_3375174_10]** 

2. **Operating Margin Guidance**  
   **Q:** Can you bridge the operating margin from 13.3% in '23 to 12.6%-12.7% in '24?  
   **A:** Brandon highlighted two main factors impacting the operating margin: cycling of legal settlements and deleverage on lower sales, each contributing about half of the **65 basis points** step back at the midpoint.  **[LOW_3375174_12]**  Incentive compensation does not create a headwind in bridging '23 to '24.  **[LOW_3375174_12]** 

3. **Comp Sales Outlook**  
   **Q:** What's driving the comp improvement in the second half of '24?  
   **A:** Brandon stated that the comp improvement is due to cycling easier comparisons from the DIY weakness that intensified in Q3 of '23, not from an improving macro environment. They expect macro pressures to persist throughout '24.  **[LOW_3375174_19]** 

4. **Expense Management Impact**  
   **Q:** Will expense management affect future sales or require more SG&A investment?  
   **A:** Marvin reassured that service levels remain high, evidenced by **200 basis points** improvements in customer service for both Pro and DIY.  **[LOW_3375174_14]**  Expense reductions come from productivity initiatives, not cutting payroll, allowing investment in customer-facing activities without hindering service.  **[LOW_3375174_14]** 

5. **Cost Optimization & Ticket**  
   **Q:** Where do cost optimizations stand, and how will they affect ticket vs. traffic in '24?  
   **A:** Brandon noted they're pleased with expense management and have a robust roadmap of PPI initiatives. In '24, PPI is expected to offset over **$400 million** of wage, inflationary, and strategic investment pressures.  **[LOW_3375174_11]**  They expect average ticket to hold up, with a pullback in transactions; Pro growth positively impacts average ticket, while DIY big-ticket pressure and appliance ASP declines are drags.  **[LOW_3375174_11]** 

6. **Pro vs. DIY Mix**  
   **Q:** Can you discuss the Pro vs. DIY mix today?  
   **A:** Marvin confirmed the mix remains at **25% Pro and 75% DIY**.  **[LOW_3375174_13]**  They feel good about the resilience of Pro customers, who are small to medium-sized business owners confident in their backlogs. DIY weakness is viewed as a macro issue, not an execution issue.  **[LOW_3375174_13]** 

7. **Demand Environment**  
   **Q:** Is the demand environment improving sooner than expected?  
   **A:** Marvin and Brandon indicated their base case assumes no change in macro conditions compared to recent quarters. While hopeful for improvement, they expect DIY pressure to persist throughout '24. Any comp improvement is due to easier comparisons, not optimistic macro views.  **[LOW_3375174_14]** 

8. **Weather Impact**  
   **Q:** Was weather a net headwind in Q4?  
   **A:** Brandon explained that extreme winter weather in January impacted sales by about **200 basis points**, especially affecting the Pro business.  **[LOW_3375174_15]**  Additionally, cycling two years of hurricane recovery had about a **150 basis points** comp impact in Q4, all anticipated in their guidance.  **[LOW_3375174_15]** 

9. **Appliance Performance**  
   **Q:** How are you performing in appliances relative to the market?  
   **A:** Bill stated they saw share growth in appliances for the year.  **[LOW_3375174_16]**  Units grew across all major categories, but average selling prices faced pressure. Consumers shifted from multi-unit to single-unit purchases and are polarized between value products and high-end innovations.  **[LOW_3375174_16]** 

10. **Big Ticket Pressure**  
    **Q:** Can you elaborate on big-ticket pressure in DIY and how it compares to pre-pandemic mix?  
    **A:** Marvin noted that consumers are healthy but spending more on experiences rather than big-ticket home items.  **[LOW_3375174_18]**  They are working through pandemic-related purchases, and the company is meeting customers with varied product offerings at different price points.  **[LOW_3375174_18]** 

11. **Store Strategy**  
    **Q:** Would you consider being a net opener of stores in the future?  
    **A:** Marvin said their focus is on space productivity in existing stores rather than opening new ones. They see better returns investing in current infrastructure but will open stores in strategic locations where appropriate.  **[LOW_3375174_20]**  Pleased with rural market performance, they plan to expand these offerings to more locations.  **[LOW_3375174_20]** 

f769943404de68c84cd5a7cb3de7d07ed432d386ba9a60b63a2d3ec9f3a9db6f

- **Strong Pro Sales Growth across All Regions:** Lowe's reported **positive Pro comps**, with **Pro sales consistently outperforming across all geographic regions**. This strength is expected to continue, driving overall sales growth.  **[LOW_3390248_14]** ,  **[LOW_3390248_19]** ,  **[LOW_3390248_17]**
- **Effective Marketing Strategies Driving Sales:** The company's **geo-targeted marketing campaigns**, such as the **SpringFest** campaign, have successfully increased customer engagement and sales, particularly in seasonal categories. These strategies are expected to continue contributing to improved sales trends.  **[LOW_3390248_15]** ,  **[LOW_3390248_17]**
- **Ongoing Investment in Growth Initiatives and Productivity Improvements:** Lowe's remains **fully committed to its long-term roadmap**, including capital projects, productivity improvements, and top-line growth initiatives. This positions the company well to capitalize on demand when the market recovers and to deliver sustainable shareholder value.  **[LOW_3390248_14]** ,  **[LOW_3390248_17]** ,  **[LOW_3390248_23]**

2d04553242a3a0251c173064f615fb9e4e2dc33e20bb0f621912cc61b9c79d80

1. **DIY Trends and Recovery Expectations**  
   **Q:** How are DIY trends and recovery prospects shaping up?  
   **A:** Management noted that DIY trends were largely in line with expectations, with continued strength in smaller project activity but ongoing pressure in big-ticket discretionary categories like kitchen and bath, flooring, and decor due to macro factors like elevated mortgage rates and housing turnover.  **[LOW_3409383_16]**  They expect these pressures to continue into **2025**, with uncertain timing for inflection, but are investing in initiatives like the DIY loyalty program and store improvements to position for a recovery when it occurs.  **[LOW_3409383_12]** **[LOW_3409383_16]** 

2. **Operating Leverage and Margin Expectations**  
   **Q:** What's the outlook for operating leverage and margin expansion?  
   **A:** Management reaffirmed their ability to manage profitability amidst top-line pressures, highlighting disciplined expense management and Process and Productivity Initiatives (PPI).  **[LOW_3409383_22]** **[LOW_3409383_23]**  They indicated that the flow-through rule of thumb remains a directional framework, and they will provide more details on **2025** scenarios at the upcoming Analyst and Investor Conference.  **[LOW_3409383_23]** 

3. **Pro Sales Growth and Drivers**  
   **Q:** What's driving Pro sales growth and how sustainable is it?  
   **A:** Pro sales grew by **high single digits**, driven by expanded Pro brands, improved service levels, and investments in Pro fulfillment centers.  **[LOW_3409383_15]**  Management emphasized that their Total Home Strategy and focus on small- to medium-sized Pros are yielding results, and they expect to continue growing Pro sales at **2x** the market rate.  **[LOW_3409383_15]** 

4. **Cost Management and Vendor Cost Clawbacks**  
   **Q:** Can you update on vendor cost clawbacks and margin impact?  
   **A:** The company is making good progress on cost clawbacks from suppliers, meeting expectations set at the beginning of the year.  **[LOW_3409383_22]**  These efforts are ongoing and are expected to benefit gross margins more significantly in the back half of the year as they flow through inventory.  **[LOW_3409383_22]**  Management emphasized that cost management is an ongoing process, supported by data-driven systems.  **[LOW_3409383_22]** **[LOW_3409383_23]** 

5. **Tariffs Impact and Preparedness**  
   **Q:** How is the company preparing for potential tariff increases?  
   **A:** While it's early and the specifics of potential tariffs are uncertain, management feels well-prepared to manage any impacts.  **[LOW_3409383_11]**  Approximately **40%** of their cost of goods sold are sourced outside the U.S..  **[LOW_3409383_11]**  They have diversified their sourcing and have enhanced tools and strong processes to respond effectively with their supplier partners.  **[LOW_3409383_11]** 

6. **Affordability Challenges and Response**  
   **Q:** How is the company addressing affordability challenges among consumers?  
   **A:** Management is focused on delivering value through competitive pricing, new and innovative products, and tailored promotions.  **[LOW_3409383_18]**  They continue to offer great values across key brands and categories, and are utilizing their MyLowe's Rewards program to provide exclusive offers to members.  **[LOW_3409383_18]** 

7. **Hurricane Impact on Sales and Margins**  
   **Q:** What was the impact of hurricanes on sales and margins?  
   **A:** Hurricanes boosted sales by **100 basis points** in Q3, mainly in the latter half, with strength in categories like generators and lumber.  **[LOW_3409383_13]** **[LOW_3409383_17]**  However, there were pressures on gross margin due to product mix, incremental transportation costs, and damaged inventory.  **[LOW_3409383_13]**  The earnings impact was slightly accretive but carried a lower margin profile.  **[LOW_3409383_17]** 

8. **Analyst Day Plans and Scenarios**  
   **Q:** Will the upcoming Analyst Day include multiple scenarios?  
   **A:** Yes, management plans to provide an update on financial expectations and initial scenario planning views for **2025** and beyond at the Analyst and Investor Conference.  **[LOW_3409383_21]** 

67668f00a9461ec2e092764e9cd4459d399984bc18c926fbd7ab6ba8c2ede5c9

- **Ongoing pressure in DIY big-ticket discretionary spending is negatively impacting sales, with weakness expected to continue throughout the rest of 2024.**  **[LOW_3390248_14]** **[LOW_3390248_23]**
- **Gross margins are expected to remain under pressure in Q2 due to sales deleverage, supply chain investments, and credit pressure, indicating potential margin erosion.**  **[LOW_3390248_18]**
- **The company is not forecasting an improvement in demand trends this year, and any expected improvement in second half comparable sales is due to easier comparisons rather than actual market recovery, suggesting underlying demand remains weak.**  **[LOW_3390248_24]** **[LOW_3390248_17]**

5b481e4afe0b11c93fc6d75b46cbd529ca4e1ccd5105d23edc80348dac7974e8

- **Lowe's has had negative comparable sales for three consecutive years**, and if this trend continues into 2025, there is a risk that **deleveraging could accelerate due to the fixed cost nature of their business model**.  **[LOW_3399366_15]**
- **Weakness in DIY big-ticket discretionary purchases is disproportionately impacting Lowe's**, given that **approximately 75% of their sales are from DIY customers**, leading to potential market share losses in the DIY segment.  **[LOW_3399366_9]**
- **Increased competition in rural markets from major e-commerce players offering faster delivery times** could negatively affect Lowe's **rural store performance and market share**.  **[LOW_3399366_20]**

023ef72028d8a23b0ad0c91b4ee2eef5f9ef59c338b02e923e9d44115827f434

1. **Gross Margin Outlook**  
   **Q:** How should we think about gross margin expansion over the year?  
   **A:** Management expects gross margins to be **flat for the full year**.  **[LOW_3390248_9]**  Improvements from Product Productivity Initiatives (PPI) are anticipated in the back half, offsetting early headwinds from supply chain investments, Pro fulfillment initiatives, and spring promotions.  **[LOW_3390248_9]**  Higher borrowing costs and delinquencies in the private label credit portfolio are also pressuring margins in the first half.  **[LOW_3390248_9]** 

2. **Decline in Big-Ticket Sales**  
   **Q:** What's the outlook for big-ticket sales and their recovery path?  
   **A:** Big-ticket sales over **$500 were down 7.6% for the quarter**, primarily in the DIY segment.  **[LOW_3390248_10]**  Categories like appliances, patio, grills, kitchen and bath, décor, and flooring are under pressure due to higher interest rates and the "lock-in effect".  **[LOW_3390248_10]**  Management expects the average ticket for the full year to be roughly flat, with ongoing challenges in big-ticket discretionary spending.  **[LOW_3390248_10]** 

3. **Pro Business Performance**  
   **Q:** How is the Pro segment performing amid current conditions?  
   **A:** The Pro business returned to positive growth, outperforming across all regions.  **[LOW_3390248_13]**  Investments in job-like quantities, enhanced service levels, addition of national brands like Klein Tools, and a stronger digital platform are resonating with small to medium Pros.  **[LOW_3390248_15]**  The Pro customer remains resilient, with backlogs relatively equal to last year.  **[LOW_3390248_15]** 

4. **DIY Loyalty Program Impact**  
   **Q:** What lift have you experienced from the new DIY loyalty program?  
   **A:** Since its launch in March, the loyalty program has seen strong enrollment and customer engagement.  **[LOW_3390248_15]**  While it's early, management is pleased with the results and aims to drive repeat visits and increased spend by leveraging customer data for personalized marketing.  **[LOW_3390248_15]** **[LOW_3390248_21]**  The goal is to generate **one more trip annually** from DIY customers.  **[LOW_3390248_21]** 

5. **Front-End Transformation ROI**  
   **Q:** Can you update us on the ROI of the front-end transformation initiative?  
   **A:** The initiative has led to **higher sales**, **lower payroll costs**, and improved returns.  **[LOW_3390248_11]**  Customer satisfaction scores and associate engagement have improved significantly.  **[LOW_3390248_11]**  Technology enhancements, including proprietary self-checkout systems and partnerships, are key drivers of this success.  **[LOW_3390248_11]** 

6. **Promotional Strategy and Consumer Engagement**  
   **Q:** How do you expect consumers to engage with your new promotional strategy in appliances?  
   **A:** Consumers are shifting from buying multiple appliances to single items in the **"duress" market**.  **[LOW_3390248_12]**  Management has adjusted their approach to meet this demand and is pleased to **drive units and pick up unit share** despite a down market.  **[LOW_3390248_12]**  Innovative products continue to attract consumers willing to pay for new features.  **[LOW_3390248_12]** 

7. **Balancing Sales and Margins**  
   **Q:** How are you balancing the trade-off between driving sales and sacrificing gross margin?  
   **A:** The company is investing in early customer engagement through promotions to win spring sales while still outperforming earnings per share and operating margin.  **[LOW_3390248_14]**  While margin pressure was observed, it was offset within SG&A, and gross margin is expected to stabilize as PPI benefits accelerate in the second half.  **[LOW_3390248_14]** 

8. **Spending into an Upturn**  
   **Q:** Will increased spending impact incremental margins when the market recovers?  
   **A:** Management remains fully committed to their long-term roadmap and has not pulled back on investments.  **[LOW_3390248_13]**  They expect the long-term financial algorithm to hold as comps improve, with incremental margins typical of past recoveries.  **[LOW_3390248_13]** 

9. **Quarterly Sales Cadence and Weather Effects**  
   **Q:** How did seasonal factors affect quarterly sales performance?  
   **A:** Favorable weather and a geo-targeted marketing approach led to stronger sales, particularly in seasonal categories like lawn and garden.  **[LOW_3390248_19]**  Early spring weather enabled effective promotions and drove customer engagement.  **[LOW_3390248_19]** 

10. **Regional Performance Trends**  
    **Q:** What regional variability are you seeing in sales trends?  
    **A:** The **West was the best-performing region** in Q1.  **[LOW_3390248_23]**  Pro segment outperformed consistently across all regions, while DIY big-ticket discretionary categories faced uniform pressure.  **[LOW_3390248_23]**  Rural stores continue to excel, benefiting from initiatives in pet and apparel offerings.  **[LOW_3390248_23]** 

1d158b04dc8e9be1b46898516edf9e30fcc26c807ed4cb12950522bab713f9d5

- **Lowe's expects DIY demand to remain under pressure throughout 2024 due to macroeconomic factors like inflation, higher interest rates, and low housing turnover**, indicating continued pressure on sales growth.  **[LOW_3375174_15]** **[LOW_3375174_19]**
- **There is uncertainty around the timing of improvement in macroeconomic conditions, and even when conditions improve, there could be a lag before increased consumer spending on home improvement materializes**, which could delay recovery in Lowe's business.  **[LOW_3375174_15]**
- **Operating margins are sensitive to sales declines; for every 1% decline in comparable sales below guidance, operating margins are expected to contract by approximately 15 basis points**, highlighting potential profitability risks if sales underperform.  **[LOW_3375174_10]**

318ab03a36adec7993ae714a3c05b53cd3e409edf80c07f0fe86a0001f0c4beb

- **Continued Decline in Comparable Sales and Uncertain Macroeconomic Environment:** Lowe's reported a 7.4% decline in comparable sales in Q3 and anticipates a further decline of approximately 5% in Q4, largely due to a significant pullback in DIY discretionary spending. The company acknowledges "continued uncertainty on interest rates, when we're going to see relief when existing home sales are going to turn the corner and begin to improve," which could further impact sales and margins into next year.  **[LOW_3367856_20]** ,  **[LOW_3367856_12]**
- **Reduction in Share Repurchase Activity Signaling Cash Flow Constraints:** Lowe's expects "modest if any share repo in Q4" and plans to fund share repurchases through operating cash flow in the near term. This scaling back of share repurchases may indicate cash flow pressures and a cautious approach to managing leverage amid a challenging demand backdrop.  **[LOW_3367856_19]**
- **Dependence on Productivity Initiatives Amid Sales Declines Could Pressure Margins:** Management stated that their Perpetual Productivity Improvement (PPI) initiatives "work a whole lot better" with top-line growth. With declining sales, the effectiveness of these cost-saving measures may be limited, potentially leading to margin compression if sales do not improve.  **[LOW_3367856_20]** ,  **[LOW_3367856_15]**

91064f53f2faf5198182ab9c1a6af80f569a5b8e024ce867e00c0d18ebb5d1d4

Lowe's Companies Inc (LOW)

Financials