LOW - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone and welcome to Lowe's Companies First Quarter 2021 Earnings Conference Call. My name is Melisa and I'll be your operator for today's call.

As a reminder, this conference is being recorded. I would now like to turn the conference over to Kate Pearlman, Vice President of Investor Relations.

Kate Pearlman

Thank you, and good morning, everyone.

Stores; are Boltz, our Merchandising; Chief our our Vice today Executive and Joe Financial me our Executive Bill Denton, Officer; Executive President, Officer. with Marvin President President Ellison, Chief McFarland, Executive Here Vice Dave and and Vice President, is which website. I like can on Investor Relations statements be you our press notice regarding that found would in our release remind forward-looking to included this morning, Lowe's

for result SEC are During XXXX. this expressed be on will may in including factors, and XX-K materially Actual important fiscal call, risks, our the expectations differ making comments results Report MD&A discussed Form and and other forward-looking, or our filings. that including implied of we from of uncertainties sections those Annual other risk factors, those as various a our

website. we US morning's Additionally, items release our these financial be in non-GAAP Marvin. the this found Relations certain that, will reconciliation on press measures. of A call over discussing With GAAP and I'll to be turn can to Investor

Marvin Ellison

prayers India, I'd to with COVID India like their there. working our made transformation India sent to our team aggressive begin for to our our in the associates humanitarian our are and frontline commitments digital work the information thoughts We've hard members in over in in in we've their technology and organizations played grappling At support resurgence efforts safeguard crisis. continued Bangalore, nonprofit financial company. equipment in personal morning, like respond our health, role and extend finance functions, have country. X We also associates to in associates would the to key help Good to India who that years. who team this by also to past protective To our we are thanking everyone. of to an commitment Lowe's a

in been protocols. our has one As second we priority, remain nearly we’ve safety on pandemic, always invested year and protecting we and support communities. in our in safety million the the of the with focused QX, number associates moved mind, that into COVID $XX of health which of And

turning results. to Now our

Our quarter this company of continued outstanding comparable with XX.X%. growth sales performance total

based regions were all comps XX.X% and across growth divisions. geographic with U.S broad Our

for for the all regions XX quarter U.S fact, In comp U.S sales XX% all exceeded and exceeded XX%. divisions

basis, quarter, the diluted adjusted earnings During prior margin which points share adjusted the over an an leading an of per expanded basis XX% increase on year. operating XXX is on $X.XX, basis to

everyday well supported outperformance margin operating as an price strategy continued and cost to product Our in our as was disciplined transition competitive strategies. pricing by our management

we comps growth improved customer of of penetration operating the continue productivity margin first and an and competitive price or XX.X% comps integrated capabilities. our increasing, details Joe to experience the PPI shopping demand XX% provide transformation Our perpetual with sales which X% outpaced omni-channel comp in of on strategy, by call. product initiatives, progress also cost .com, the sales will discuss grew our driven Bill our will On initiatives operational and on PPI. later management everyday our pricing reflects top for in a in represents of comps X-year omni-channel a the quarter, XXXX, XXX%. DIY over in only invest our XX% quarter. this Pro With quarter Lowe's

basics, carrying provide and excellent were job customer. progress addressing journey, also we've the that ensuring this the we that the We Although brands products and expects. quantities, Pros need very with by a with this and has busy customer an X-year service began been pleased in Pro made that I'm the our

The in small size that products later throughout And which frequent benefits. that with layout Pro, the provides through customer. drives store. the is a we discuss have Pro in relationship Pro in-store a specific loyalty opportunity our we and who engagement only improve mind the valued a to more stores with undertaking multiple Joe online serve increased we're the compelling of Pro This Now our our of medium strategic with to departments, shopper we productivity purchases call. by both growth shifted members our and as about the initiatives phase will the to in program more in Pro highly customer I'm continue the to target deepening them the that growth is confident a customer. this with resetting

our looking quarter forward importance home world, to of post-COVID reimagined the the In new research this consolidating to the industry are increase And years season. improved us we of customer approach addition launched our importance comps over the XX% given for we a network this will And many increased deliver technology. to offering business tells leading We've in satisfaction of overhauled in along home, to remain with provided our that by come. our services elevated business. Pro, the the SpringFest, the significant implementing although us service and and strength installation and all

projects, In Our ever generate Bill campaign their to this home discuss outstanding the able will leaving a destination without that for provided moment, inspiration of from sanctuary the we're our the results themselves transport of customers could to choice reimagination so of spring. home.

despite and for associates comp leadership operating this as operating well environment. resilience work of that the continuing thank serve team delivered related their We the I'd our Canada Canada. all commitment to in in outpaced to hard to customers COVID their restrictions. challenging U.S to for growth several turning like as Canadian new Now the frontline

an brand product family including also brands focused brands high can consumers seek with project leverage trusted our in we is the see brand Allen+Roth, our to step across total this potential on expands Kobalt where continue expanding building to We STAINMASTER as and entire characteristics. private in home important portfolio, position provide we're areas performance private on we Source. carpet. our STAINMASTER every quarter acquisition Project We're today. product powerful acquisition, brand national decade we products which of This to the penetration customers. as joining At trust also This elevate strategy retailer market appeals of acquisition carry both This assortment brand for this private With our same and we'll other the that that they great a the value home select DIY to a long balanced the portfolio improvement extend consumer home. and building for of our offer products. brand to recognized with these time, and national only exclusive brand on private STAINMASTER brand, the most a and includes brands Pro strategy the the announced is number high carpet loyalty the

continue localization our our our to give me that customers. our will accelerate total strategy we're quarter product services, share installation our solution first investments the Pro drive Pro, right investments DIY making confidence home as market the we growth enhancing home in in to results our Our through to gains elevating assortment. initiatives online, allow and total These sustainable for deliver and us by a

associates. our once appreciation in an I to Before our again first I'd XX frontline my extend the In I had quarter, geographic X close, to stores to of regions. like opportunity visit

we an to give the our associates on my through at work, recognition associates' respect these decided our year observed deserved for service efforts, a In in to admiration Easter much distribution very circumstances, challenging announce customers and for our frontline $XX grow. and our close stores loved Xth I row Sunday hard to second and of XXX% continues quarter million serving As a bonus, earned incremental families their ones. stores that I'm a with represents pleased together spend also to the off payout associates. a profit This level. consecutive record hourly $XXX our day the winning target million to above sharing of to

macro efficiency. that continue While both and remains we near-term the the we're operating uncertain, driving outlook confident market, to improved gains share market will outperform

quickly transform technology plus to operating infrastructure over us and I'll us Bill. given capabilities, business dramatically able has agile environment. Lowe's with in journey that’s which the a to in to any improved more changes turn And turn X-year potential the that, to call Our enhanced, respond makes and

Bill Boltz

growth delivered morning, and the everyone. XX.X% We first quarter. in U.S good comparable sales of Marvin Thanks,

continued stocks improvement Our compelling and DIY growth and broad across strong and in products. Pro offerings online capitalize across trends based with categories. home and great for Consistent demand was on customers, improved allowed recent to the us product values in-store

XX of more than all on comp departments XX% a basis. up X-year in over XX% were generated XX merchandising departments fact, In comps merchandising

organizational Similar As were also extremely we our this extended Marvin approach event. in with we the prompt congestion We success sense avoiding holidays, provided trips, described, a to weekly and to while excitement to return connection four pleased through project of of winter event Lowe's our merchant offered X activation SpringFest our create Garden-to-Go to needed of the how weeks due responded alignment also great and online. to across to required new my across stores. our consumers event a a everything stores, giveaways was kits The teams. customer strengthen spring our different that and this marketing fun for

performing now in delivered Turning unprecedented demand top strong the and to inflation category. Lumber Pro the highest comp our driven categories. again by

the worked the us Over assure supply, especially suppliers strengthen the in-stocks relationships, to Strong and competitive we in product continue been with this market additional category. lumber that have customer and in year past closely Pro. sources have a merchants secured as can allowed in our our position products successfully with tight in-stock have new to tight maintain to

decor, kitchens living. seasonal delivered to and addition in we In outdoor XX% lumber, electrical, comps exceeding and and bath

inflation strong in from category share of Allen bath. as by by electrical we total were comps reflected product and strong in refreshed Our the in market The copper Roth with home our repair well great the strategy, recently especially performance + as decor customers by our and as brand. to sales market. with we as category quarter drove robust engagement accents home elevate demand driven assortments, our our remodel posted our In sales kitchens support solid strong continue in increased in decor acceleration driven

with they the their merchant spring our that launched broad new quarter that categories a inspirational teams this need product decorate through fact, point to lifestyle array view, in customers homes a trend designs In across gives of span confidence style. of our on collections

continued Our ticket their Kitchens projects. living supported quarter and stimulus bigger and as Bath spaces, the department outperformed homeowners enhance in economic to

and as Seasonal Outdoor Living spring. in grills homeowners from of arrival patio Finally, demand and early the benefited embrace the

outdoor power launched SKIL as brands zero the emission consumers strong We EGO equipment. newly their in and of rechargeable powered quality attracted are the the convenience and also battery sales to saw

Lowe's trusted SharkBite. our to knowledgeable of in the exclusive powerful has power and EGO pros of which Lesco launch fact, brand some as faster SKIL equipment of one EGO brand bring and offers the builders, Pro position tools brand in only tools such delivered addition is lineup, fertilizer leading includes The In Eaton history during cordless their complements we sales competition. known number trade strengthened most brand. the FLEX excited demand to charging largest And of the remain power of power lineup And alike. our of which FLEX carry, fertilizer arsenal, FLEX addition the our weekly also power this a brands by We new powerhouse homeowners brand professionals. their top other outdoor quarter, Deere, Strong-Tie, Honda, and contractors by brands power tools. and of landscape We're strong Bosch, results were truly John Ariens grilling. during to the Husqvarna, continue brands and we already latest this more and the complements is and brands DeWalt, innovation, to two and and than the to outdoor Char-Broil, the Spyder, including discerning Weber quarter, Lesco add our for The Craftsman. see Simpson excited like new spring, the in that further The

and As XX.X% strong of growth we X-year Marvin Lowes.com. a delivered of mentioned, on XXX% growth sales

the across improved to to navigation enhance with continue for experience categories. search functionality allows shop customer We products that online consumers and easily

enhance continue through Additionally, loyalty app, strong as great experience. a of to are our working mobile our rates we download see mobile we customer to

relevant we driven relevant, continued Marvin competitive more is mentioned, our everyday seasonally complemented in delivered this management, vendor and our a targeted that solid cost transition As by pricing strategy by price product systems to promotions. improved and quarter, disciplined a improvement margins enhanced

part our excellent of of initiatives these ongoing All strategy. are merchandising

taking and we We driven everyday as refine pricing. a while capabilities to data our manage to to these we strong continue by leverage approach values consumers, will continue portfolio margins to our deliver product

product elevate Our assortments and allow home us will expand to to brand and market take our strategy total share. and continue

our I'll Joe. to thank and on I merchants Thank and partners care their now for the close, to of continued want I our our turn our customers. focus Before and vendor call taking stores over you

Joe McFarland

delivering service, laser-focused excellent Thanks, sales supporting record a customer environment everyone. our Bill, In first providing safe and store good the and quarter, associates volumes. morning, were on

for As payout continued associates. record sharing our Marvin frontline profit world would our associates earned dedication mentioned, XXX% of to a to winning million thank our providing I like a hourly together class service. stores $XXX and bonus, customer their

continued focus perpetual our results mentioned, quarter. or productivity improvement Marvin on to this As PPI yield during initiative

store As by reduce we increase payroll improve to hours, productivity. using customer sales and tasking leverage technology service

and merchandise for our of using in we most sales the market. that allowing to canopy. care helps creating areas checkout the And will launched line emailing app, to payment, and performance For they even in-house The the high more service quickly department. the gives Pro as customers from stores. which better on the leveraging scanning can exterior can digital flow in and rolled of This recently or mobile developed arrive a example, position margin of and the was associates us fully price at before in-house store an join on to floor our developed as process out first sight to is in areas associates outside incoming also we the we of labor with when These signs even app checkout, down and they take We're and improved freight line. store under items, better product prioritize our digital a so products store and receipts. garden, now lumber which tasking support such on improve lawn associate efficiently traffic appliances our customers. secure changes the they app in line signs product in rapidly tendering implement we're speed inside cut printing also

delighted also with busy Our fulfillment. customers weekends. driving on are the especially in-store solution, We're in productivity our

touchless by stores contactless of our to rollout expanded these April. we lockers. use quarter, U.S easy really completing enjoy Customers in to our options This XXX% lockers shopping the BOPIS of

our store options. improve this allow further and in to BOPIS limit has customer satisfaction at us already of Having omni-channel fact, highest rated In our become lockers desk. XXX% expand our will fulfillment stores the U.S congestion customer capabilities, service

Pros. our to Turning

outpaced Pro mentioned, quarter Marvin XX% the DIY As comps. in with over

to in-stock program. gain Pro our improved and service Pro the with inventory our continue We enhanced new our offerings momentum loyalty levels, through

to also associates to begun to platform engage Our our project sell pro entire have our Pro with leverage them. sales new and CRM customers the proactively

share customers. Our of most compelling with growth our expanding existing opportunity wallet is with the the Pro

to personalized add us Pro is that Our in-store redesign app already and we take, the cutting a Lowes.com their products designed as all as away Pros. for We're well they number Pros allow the including features product time. have Pro project of their new serve tailored will launching in incremental to for they their new customers stops dedicated created with on that to experience. down the And is to us on the that day. to and and aligns the continue online it enhance also a small experience customers to businesses ensure make our options effectively stations, all We're to quickly time throughout Lowe's the shopping site who future, demonstrate trip new we services productive. CRM of on charging efficient the only pressed migration always help and for for Pros enhancing parking access more shopping give This specifically that and Pro a home mission the introducing across entire for to needs platform more of layout trailer spend checkout to store from the experiences add We're cloud. value convenience the jobs. to new at Pros medium for Pro job Lowe's thus our our each phone be the like adjacencies sized online DIY customers, enable will ongoing are their Both continue to experience

As Marvin comps momentum over our this seeing in installation terrific mentioned, with we are business quarter. XX%

business was money and a ago, As a years X this losing customer satisfaction. reminder, poor just

be are trajectory In Promoter with third the pleased we reflected we by study. party as more the a pleased I business. lapping in making our pressured in overall COVID, in strong we of and were are are our results stores, with very XXXX recent Net this that closing, cannot improvements Although execution QX scores

and frontline work retail With hard to officers, operate and Dave. a I from stores could executive ensure visiting Our officers, their to environment are basis and field prouder associates. stores commitment in are supporting to of this I'll leaders the team our our it that remains on and turn This to merchants senior accomplishments listening be associates. weekly that, and not we frontline difficult very of a over

David Denton

I'll comments We cash dividends company's shareholders allocation Joe. of program. begin flow repurchases. few both billion generated demand. a the to and strong in and morning capital $X billion Thank continued operational In consumer this our you, driven a $X.X improved by return robust QX, execution with we on share free through combination

quarter, we at $XXX During dividends paid million per share. $X.XX in the

$XXX also billion We average shares at price an of million a approximately for $X.X share. XX.X repurchased

$XX share offering the in sheet, authorization. as We support million to of our on March. proceeds business ended repurchase which our quarter balance and equivalents strategic $X we cash with and have approximately on billion expenditures $XXX cash totaled quarter initiatives includes $X.X to remaining in our growth. billion from drive in the the notes invest our billion Capital We the

undrawn. loan addition, entered we into $X which April, facility In remains in a billion term

our the adjusted end Our balance at of target EBITDA extremely below quarter. X.XXx. with the healthy long-term of well debt to sheet remains at X.XXx

by quarter due and the driven stimulus as was elevate was a and turning diluted improved especially favorable of our diluted by to rate across SG&A several margin product commodity an we execution This last consumer a strong of very improved a per gross of contribution support forward per leverage average execution QX continue growth In March offerings. diluted Please growth driven sales a growth, consumer when was balanced the adjusted prior note effort. impact the with result both to Now $X.XX, measures a our and earnings increase from ticket compared transactions the the including were to XX% earnings include the repeat where share rates category, strong of approximations Strong in sales This service a and customers. home, government count QX, comments continued strong the weather year certain within income to of for of generated year. statement. facets and backdrop ticket share as share related modest comparisons result non-GAAP appropriate restructuring business. inflation, and point country, applicable. XX.X% existing that My billion, factors, package there per $XX.X was to earnings many on from focused across will this sales on we Canadian our as grew lumber XX.X%. increase comparable XX.X% a grew store sales comparable from new and both transaction to

we XXX U.S past geographies, quarters, customers, nearly and elevated the across channels, while XX.X% and Pro Lumber While in points March Consistent benefitted quarter. little merchandise that the and levels from by basis checks last estimate commodity a growth, difficult government few points remained the versus commodity basis other growth was of year. quarter. grow results to the measure, the at selling sales well-balanced XXX comps in were all up inflation departments. stimulus prices comp with DIY

impacted harsh winter March XX% other in in by of stimulus. storms while hit storm impacted XX.X% comps Texas were third the March recovery round were comps that U.S positively the by Our and February in several XX.X% negatively and states, and were February, April.

demand and spikes Additionally, April comps. cycling the comparisons COVID second difficult last April year's related those more of we began in half impacted in

improved to increased XX.X%. February X-year of Looking comp XX.XX%, QX a from 'XX, Gross last and at March up growth points. XXX increased compared basis as 'XX. April XX.X%, U.S XXXX XX.X% XX XXX basis basis sales and margin Product year points to was up margin basis points rate increased from on

and effectively product mentioned, teams cost our throughout to pricing our retail strategy leveraged quarter. merchandising Bill As excellent the manage

and mitigate While work some are in vendor to diligently our inflation categories, cost merchants minimize seeing increases. we product

and supply chain carrier retail to our relationships Additionally, sector. pressures cost throughout experienced scale minimize distribution leveraged team our the

we With pricing side, strategy we price pricing the however, our to sell. in competitive to began We tools leverage shift focus points from XX of improve pressure products as increased the basis to of On sequentially year. on versus our control an enhanced margins to margin that our improving gross everyday XXXX, from shrink last margin improving see trends across quarter. array QX continue QX results benefit shrink by this

from to expect invest points to our favorable rate XX lumber strong capabilities shifts of primarily mix the were SG&A will resulting our from adjusted our XX we points product costs related partially from a cost they continue throughout PPI as pressure margin well points shrink XX.X% chain in to move as as We mix, revenue. These from benefits by to of improve and supply and sales initiatives. XX to year. less offset credit and that costs from pressure basis compared leverage product SG&A basis ongoing our due points inflation of continue by performance COVID as of productivity basis product levered driven basis omni-channel lower XXX LY, and pressure operating

related $XXX we basis approximately million SG&A expenses reduction As as XXX million in expenses $XX last COVID COVID leverage. $XXX of expenses million generated compared The of nearly points anticipated, to year. of related incurred these

focus points X Additionally, strong XXX basis sales basis leverage points XX productivity expense, allowed advertising. operating generate points and to in in and on us occupancy and efficiency basis in of a salaries,

rate tax points Now, of primarily to benefit slightly The gross LY. improved billion, the vesting was XXX of of basis the a Operating due the employee tax and options. sales related XX% to year, driven lower-than-expected, both certain tax improved rate The stock rate. margins operating prior an leverage operating XX.X% was margin for was effective $X.X XX.X%. to quarter profit was increase over by of up

high from pressured up in COVID unexpected as was billion note, QX inflation. of levels demand billion $X.X line position. end, the an $X.X reflects a build related of our with specifically of levels $XX.X Of to continue to improving increase billion, This At our levels inventory up in-stock to meet seasonal of disruptions. customer in inventory XXXX year-over-year from when increase while $XXX supply We levels throughout includes due spikes related patterns. sustained QX this were quarter well to million inventory as the demand, quarter

comment I close, planning let before me how of on current our and our the Now trends we're for XXXX. balance business

on our are of in an our year covered for results the ability operating the top update. strong and market our build remain ahead XXXX, home year-to-date to enable home December stable our drivers margin year. we demand in The to that share. rates confidence gross deliver appeared Our will tracking capture of Those and us We improvement than underlying of robust results XX% factors that exceptional we strategy flat investor total scenario in to forecasted. be more resilient market margins confident including originally

sales cycle encouraged mid are We our to levels in last surge as sales U.S April year's basis. trends we even QX, volume materially our demand. consistent began are April a very Month-to-date, strong comp performance on X-year by comparable including performance in May with

Also the remain year-over-year see some of areas the difficult forward, comparisons year. Looking restrictions COVID across Canada. continue to remainder in throughout we

In environment to mix. anticipating industry respond ready and LY. the we on home. focus year, we regards prior monitoring closely from XXXX in consumer are to a in face with promotions modest quarterly of cycling a agile whatever to the potential remain margin spending in performance, more this and gaining product With shift our market share pullback reopen, wide quarter, margins. levels markets gross there are high please behavior, QX our away that As was particularly favorable improving throughout we an We note while operating

rates years. a pricing, As cost margin we gross Investments expected competitive gross moderate to been Despite and our pre-pandemic over our levels. gross improvements in margin rate strategy year-over-year in nicely X past management our everyday a have vendor QX. XXXX driving this anticipate promotional the currently decline performance in in margin over decline, result, moderate is expand

cash expect year continue to the we XXXX. As this I and $X deliver future margin stated drive Further, to of to levels flat growth generate flow. plan gross we earlier, CapEx returns. for business in invest robust We free rates billion to expect to

continued repurchases about also As In $X share in for and we our in value questions. With while over supporting are we're we year, now our long-term. ready with deliver the that, shareholder capital significant our dividend. this momentum our the approach disciplined planned closing, very ability allocation billion to to business excited

Operator

Our Instructions] from question. Please Morgan with with proceed comes your of [Operator first line question the Gutman Stanley. Simeon

Simeon Gutman

of there. that you Hey, Pro story to morning, good everyone. of maybe higher And foot. and per an to opportunity on big I think move update sales part question because where first over can expect some penetration is, asking time getting My margin forward? can I'm I provide level growth think is you going And the Pro seems be a

us area? or on know curious, Marvin, David, if update So can that you I don't

Marvin Ellison

purposely this have target penetration. Simeon, set for Pro We is Marvin. not a Hey,

comments, And I really elevating Pro. phase in As now strategic prepared we're a to on started in more my we basics. focusing mentioned the

Pro I've the business and running because and the expense but we're target, target, you set good on, a the it we of see can said in in while think this past over my learned a we a back Having in XX%. then and and space stated a customer just XX% Pro but set have at target our and focused oftentimes you also purposely penetration the in based history the hit getting that's do Joe's experience space, history its our trajectory on We penetration, estimate can we that And between that, between on you serving really we business that time this XX%. XX% today the currently not now. we're when right

Simeon Gutman

grower, Can mid-single-digit to that And this whoever. quarters. that ask enough. the I that last school question a over home industry, Okay, or Xx macro improvement wanted is this of to four right, fair ask Xx industry, the you did I thought a

that, maintenance And so 'XX, could are. of repair or there's hey, growth, side best. best more in cycle on some there's forward maybe that comp there's more having this the flattish going the it. that not this And capital, invested debates their is top what's maybe of what of to school you're you and of people shake this we at on Curious may housing more we homes, have guess your spent where digest this. And thought out grow, maybe sort says, on then industry so topic a needs other or

Marvin Ellison

Yes, we're general. are home we any industry I'll financial take improvement and mean, let a very very it's part, I'll in Dave But the good excited Simeon, the question, perspective. bullish first provide I on

look at macro us. impact home prices, consumer like all pointing rates, low direction things the have and stock, factors of impacted If trends housing the also of rising business really I household improved those this mortgage the in specific right strong formation age factors mean, macro and sheets, balance are this for as you that business historically

But to as home, significant strong sales. a part benefits actually business, And investments stay stock In addition It the may overall that, what repair maintenance continues there's home to improvement decide make appreciation, of that that home we upgrading do. in age, when not and housing home home consumers market. to in the when really we're a improvement. correlates that's benefit housing price the their to existing in

we've very to mistakes at many been that plus past X look the at we when robust there made we look I in then over And the mean, strategic see years. if improvement, year-over-year really relative that been the business transparent control, potential things growth we home we this have So macro. just

do with will income we forward. strategic additional enormous our what ability income our continuing QX upside business And have we and initiatives think Dave, add drive and them. operating believe if to to reflects any so in operating let really is invest I'll we by in gross that that margin think have performance. we And smart the you revenue comments

David Denton

Simeon, the that that would only migrate begin that would over next ownership we millennial customer home into years, I the anticipated the the other several position. thing is to obviously add

trend think macro I that is is happened probably has through what that COVID accelerated.

segment tailwinds the industry So think probably we more bit given several next about years. the a as

Simeon Gutman

luck. you. Okay. Good Thank

Operator

you. Thank

proceed Our Suzuki the with from next of America. your question. question comes Bank of line Please with Liz

Elizabeth Suzuki

Thank Great. you.

robust the reinvested and robust additional XX% think above think being should discussed demand the scenario? scenario, potentially share in the running that So, gaining initiatives that moat? deepening about the competitive into upside there margin aimed market operating upside you we at if do sales sales Or market could was to are be

David Denton

up but I'll to Liz, holds really if in is fact robust, there, be I two, and start you're very think we you macro our XXXX And a looking I as year, we're with the margin. and here the and think, going like to if robust investment thesis all business of our focus this what that. we're half operating around market we And is That launched we 'XX. a year. we're on that And at we very are things. performance. expect committed question this have the priorities this that we can't do right that at to above making back to to really I our focused we is investments that Dave. long-term, grow we very our the thesis Hey, think year; with this also operating market improve look have two into we that's predict do feel One the the in improve well-positioned, for I very share grow the we're doing XX% specific performance. or going margin operating think have,

Elizabeth Suzuki

follow-up, growth one Right. And what is two of quick XX%? there? the which which comps the was below And categories X-year just

Bill Boltz

this is Liz, Yes, Bill.

below paint two and that company that last categories some spiked business a because business the and and the achieved then masks of hardware categories safety painting the the in year during all on hardware and last XX% everybody pandemic, year business driven by driven quarter. were plus So, basis, largely but of the X-year our

Elizabeth Suzuki

Thank you. great. Okay,

Operator

Thank you.

from comes with with Our of next question proceed D.A. line the your question. Michael Baker Please Davidson.

Michael Baker

rest if quarter. the March? about of X-year May for of to that Okay, stimulus a versus thanks. But take focused be off short-term Do because that fair quarter? occurred April And versus that think bit. the couple way May then playing should be -- you in basis and expectations on the trend flat the did A the first for the all, that's of to the quarter, forward fall hate X-year in a out and -- little Is you here. a think we March into about second

David Denton

at at think a through I'll as you you Yes, -- somewhat you look well tech the Texas by performance hitting stack inflated if recovery as quarter, was March about first, look on period. that in as I month it our if basis, X-year stimulus guess, yes, storm the from other and states

trends that how continued kind the think May I making specifically focused as perspective. we're think, sales cycle I service. quarter not We've and into for listen, we be about great from sure And the of So guidance ended have quarter. we've feel giving to on very a the we we good

right have in in gaining supporting our cycle we We marketplace. feel as consumers and XXXX we're as I our momentum like the 'XX. our about here both across we're business in -- think And we into stocks categories, we're and

Marvin Ellison

of add Michael, against this only we Marvin. up I'll the a U.S., and is in XX% comped of to The April we top on XX.X% were is that month comp that. point almost in the

really that. we've to high exceeded perform even So our going demand internal demonstrates we against year, exceeded still And our plan. from feel we can spiked at good the us of a expectations, level. about also some that it last up That

great demonstrates to surge significant So we performance April, expected. against our actually in felt pressure, be you're you're it comp that's to demand, when and sales but in about going up see

Michael Baker

sure. Yes,

this last ask you strong. question, a sales did about did a gains, makes bit and tough and and share quarter. using market a on growth year stores look a not really that That supply equipment at XX% follow-up comp faster material, NAICS really, grow But against sense. incredible building the the And XX% garden the than Okay. the particularly, talk a of market little you simple

the you about to at your think numbers the wonder share underpin for how I at looking So or comments gain market what year. what you quarter are market you're and looking

Marvin Ellison

of the improvement probably home always basis someone has I've a said that who short-term of from a data segment. couple retail any retail on in formats, different coming has Michael, worked most suspect share market

we is to a comp revenue that a we cobble losing investments and focused on and this in at So market candid, can't retailers X-year we current look quibble can creating shop can leverage lean customers technology over and chain for channels do the will different look at capitalized market. COVID growth when on regenerate to amount into supply supply the base were and broader the to it omni-channel post-COVID, to in past basis, omni-channel merchants share. also and in our in position really fulfillment delivered going can as we share. or and able with X-year win And And make broader We're consistently that we and market share our it believe very of the take did we that so performance our the about this to the rest comfortable of said and our we've in prospects we will and be very, feel and be that market year. quite environment, are with and most quarter sales

Michael Baker

enough. Yes, Thank Appreciate fair you. the time.

Operator

you. Thank

proceed Our question. from your with Please of Christopher line J.P. Morgan. comes next the question Horvers with

Christopher Horvers

everybody. morning, Good Thanks.

to systems? should and of the XQ and seasonal you're question it over the is My pricing in learning highly markdown on some say a couple benefits quarter? on first So that to accelerate seeing what versus margin And prone side, this these year the to like XQ extent is sensitive sort more third the given the a builds questions. of a sort that product some the quarters

David Denton

this stages not really think at perspective managing in confident our investments do on product price the manner -- merchant finance and of in lot do we're I longer believe is managing necessarily time. that This we're this to performance between a term. that still improve more over in pricing the performance everyday prepared that. here. through. And some enable Dave. long is as in early us the infrastructure It costs and a tools in managing team years as to is think -- we’re pressures seasonally the have next margin I said here about of Clearly, very a we -- effective inflation moment, are business over kind our cost about at related. our we're we listen, continuing feel and Lowe's. management from think journey technologies to of the several We've Yes, invest our to remarks, these I made and improve -- our we we that there

over the time to and we margin, product Now, performance the financial some here chain Chris, long-term what to would to want said the really to kind flattish margins reinvest long-term. with go fact but algorithm mind, in over back the maintain I that is that keep of of in we improve drive margin product just of supply our we growth gross

Christopher Horvers

Got it. Understood.

Marvin Ellison

[Indiscernible].

Christopher Horvers

the as And on XX% follow-up, -- then terms question. of in a margin

there offsets end beating lumber it outlook, offset, the X% and that that sales perhaps, Is do a scenario leverage more you bonus the beating you wouldn't from above headwind guess why of guide? rate If XX%? into that minus than sales up, natural I a inflation robust a employee headwind Is be an incentives? creates

David Denton

and some gain first to operating Yes. performance Hey, the share, we're to margin improve we fact foremost, focused. want market ourselves going to Listen, here short-term in to trying I to our said get we're just get Chris, we've that here. got about the and XX%

let's we XX% get we least expand but have Beyond our it at first. believe can margin objectives XX%, and further, we to

that we're just of making laser-focused And upon delivering kind that on sure so our perspective. from we're commitments

Marvin Ellison

is And Marvin. Chris this

outperforming can the news in marketplace. We the we in put the the You we control of the that business perform, have our place at feel perform. some improves will we the a then And and the things at looking as challenge some that's well. leadership better couple overall the the some processes we're will and above the outlook of approaching to scenario, the about really better occurring macro with the operating of how tools it. the David all the is, market, broader paying it as good dividends. business appreciate said today, is of equally for decisions and committed dynamics significantly team and perform and were times margin of great macro are macro we The And robust already the improving the

Christopher Horvers

guys. luck, of Best Understood.

Marvin Ellison

Thanks.

Operator

Thank you.

Please Haskett. with line from proceed your Gordon the Chuck with question. comes Grom question next of Our

Chuck Grom

quarter. Hey, good morning. Great

the the side increase Depot pricing. demand over lumber You velocity Curious past same thing few and seeing months? the the yesterday. unit in guys you're spoke what about on big said

Marvin Ellison

really keep that demand. we're with just were such supplier able we relationships, you off. unit up demand Hey, of it the create I I What an could will that unprecedented I pleased can start tell environment merchants in is to strong

So year. the I'll let Bill feel we performing how we're rest of talk it kind about the units of and about and how

Bill Boltz

preparation I done enabled that rest to All needs of focus year the and that's to to demand I what as of first. the Marvin, fulfill that continue the can in to being that quantity of market. care coming work and that's to we done we're through us that's manage maintain continues Chuck, was All Yes, been think on right remain forward. certainly the go the is of the focused making them now by going strong. Make year, echo that job last demand lot the take think sure that of the has customer. I mean, really we right that Pro we're team. sure And off

Chuck Grom

from talked just a of in would the about how it installation I a curious, like, penetration comp to to the X% that this the also, compares can the grow perspective, be today? quarter. rest just That's is call hear. How business And the of what And on I'm big you that? great guess profitability you business? business, then

David Denton

think the that penetration runway here. have business for And do business. we we is mid our single big Chuck, digits Yes, in a

remarks, As business service was from best that Joe and wasn't something prepared performance not operating that invested perspective say, indicated an was poor that something financially. is the historically I'd in had we really, and historically model was really his in

business think have foundation really we a about to growing nice now that we've it. turned think as I around

couple a to give I Joe ask of it. comments on So

Joe McFarland

a just comments. Yes. make Thanks, few Dave. I'll

veterans complexities inside the the being of very platforms heard understand COVID You really in prepared and a especially the attracted all performance that industry new the home that environment, my remarks very, we've that pleased in total the we on the have on home we country, really all and drive, the consolidation installers that across strategy. to that's and as remaining our under laser-focused focused the programs same been umbrella want of

great the looking the to country we're pleased very with with all partners our team's pleased and installer efforts. of continued momentum I’m forward So very a here. across

Chuck Grom

Thank Great. you.

Operator

you. Thank

next a comes Mushkin with with proceed line your RX the Our Please Scott Capital. question. question from

Scott Mushkin

Hey, question. taking Thanks my guys. for

business when question your long-term guys I XXXX. strategic think about you So into had

As growth think look per top type look strategic are at Thanks. XX you you your what drives next three things over kind Lowe's of company as incremental of you do months? what your priorities, specific, out the

Marvin Ellison

Marvin. is this Scott,

market it also sure strategy services focus, acceleration Pro. installation more total omni-channel really is business think with that making where I improving which continuing directly home our the goes in invest and overall talk to our we to we're about investing online in our performance

the also I more business. in As and shop, the is the I comments, and how value Pro to frequency dimension all understand that Pro understanding the customer a adds to shops on of Pro not of being store. mentioned, we how made are mean in here the my of past because strategic different customer that intently customer of focused of a really prepared one focused And our And The customer. mistakes economic segments entire throughout are important.

be we're what focused the but ensuring really priorities. we leaning couple Pro omni-channel, say focusing will in seamless of RX service customer, years. stay installation business going next to home total on and is continue really whole for the to strategy robust into of and a our But have comps I the three to things to going on those we're that So that continue can

Scott Mushkin

are you crimping out you're any seeing? great. level seeing that is high guys very all? And year, is inflation just at is this that half Or That's this demand signs the then back of like not something of looking

Marvin Ellison

-- this seeing I'll give good it. I about perspective. will a thoughts, not business this really give Dave, we more feel mean, I financial you We're let business model.

even that improvement, an I a business quarters even operating about we've through we retail home the all to we're at look just fatigued, with it's specifically forward as macro mentally you the safety that all both the in and And improvement and and next business that at the looking positive and When for or home both nothing seeing physically health inflation growth, as look significant think into areas, impediment don't for can going totally I we backdrop. that sector, positive issues we're and personal. say As pandemic, we lumber headwinds this all look with overall there's year, sector. though certain create that's just an with believe for just dealt copper, at very

David Denton

add business The at said, point from this no I demand to Yes. we our our they I reconfirm in very you Pro long customers, in backlogs want if just point across extremely see categories. them in thing our the in this in or time to speak And is that only at Marvin hearing busy think slowdown have what we're at time. would moment

So will for I continue time. some demand think period this of

Scott Mushkin

Thanks, guys. Appreciate it.

Operator

you. Thank

Our from your of the Nagel with comes & line Brian with question. next question proceed Oppenheimer Please Co..

Brian Nagel

Hi, a good morning. on nice Congrats quarter.

bit various do lot The How you look for think XXXX your of first and question the margin scenarios the But how proved in the think extent I opportunities a levers about wanted to you to expense about choppier through Lowe's. at that XXXX? talked you've balance ask, we operating may have sales talked prepared do the expense a this and about for your comments. levers? market the I

David Denton

supply labor a we Dave. probably business we operating how level is this is bit across salaries little biggest Yes, and the our have in the obviously, expense chain. Obviously, manage

we've to turn perspective. profile I demand what done from seeing component, that effectively adjust it processes it that invested manage really think With to over a Joe. based to us and we're that, in is and on really we've labor tools I'll allow

Joe McFarland

the about. for that point of thanks PPI initiative talk points really out Brian, we question. major And three I the

to investment that hours the technology and in is very the doing First tasking effectively. we've been reduce

made the digital those per the Secondly service, stores, sales finally, in front improvement of examples, the customer some appliances, in the changes, lumber, square are on we've investments the signs end. and the we given overall and making digital investments sales area, productivity is Pro and the in think I with productivity the is we've then foot signs

investment leverage this have good driving that times to in PPI that we have thesis overall think And I to really choppy times the we the or speaks business. so

Brian Nagel

That’s you a it. look But with QX rather broad And my based. to then very have follow-up business, that Got regard normal the as back with markets country, by to and kind what commentary May, I given presumably regions opened getting strong the very market market trends seeing sales, of are difference in the helpful. basis, question to up any of sales mean, regard are you clearly, through at your of faster, their consumers have country lives stayed sales in quicker?

Bill Boltz

very talk When in base. and we I XX prepared broad my And geographic win. I top few comments, regions can three outliers at broad said mean, the is Brian XX%, our about with XX%. this north my I remember in all I region's just we're career. it areas, XX of divisions anytime of at all divisions. we north in it's And look or as strong more of negative. top we consistent when mean, base, And markets look surprisingly in consistently and have our is metropolitan

when answer we outliers. not in And underlying a revenue overall up in it also positive the COVID that our country spikes we still even differences good, spin we so aspects us, seeing sheet, those short that were points seeing at within to showing are and is we're the balance of just and But When how they mobility pockets is, and see vaccination rates, around major any the business, negative that in demonstrates we're there customer for any performance customers running metrics look didn't consistent financial more business. that country.

that. very for. the we about will we're of points praying that's feel what what So hoping and for signs believe year, the and good we be positive it And rest to

Brian Nagel

the all you. color. Appreciate Right. Thank

Kate Pearlman

question, please. going to take We're more one

Operator

Thank you.

Guggenheim with Our this morning question. proceed of Steven final line question comes Forbes from with Securities. the Please your

Steven Forbes

the for on to I focus thanks and morning, Good Pro. wanted taking the question.

And XXXX. the You the variation if as of remind we through should mentioned there's quarterly or of Pro. if that contributions existing sort to work growth. we be in curious We're Pro any rate growth penetration from XX% sales us customer our sort sales versus way you new speak in of, the cognizant could

Marvin Ellison

equally results from the existing and Steve, Pro between new balanced customers.

one Joe didn't continuing of comments, our we percent to would for from existing X his penetration years. to just the plus were the attract a a new get Pro our wallet a existing As prepared we customers. and percent us of key spend greater get solve that be mentioned of will customer in larger next If able customer for

greatest seeing credit our make. program acquisition to more, but team our opportunity new So new any know customers new program. us the we're that buy point sign Joe to great tells with see we're that you loyalty you be our And is there launched, that's other existing that of and same don’t seeing customers. in incredible the customers customers very just also at time, his growth attracted I if a the Joe, for would and is getting to

Joe McFarland

service, I about lot X talked years now The phase price And on right a would strategic basics, over the journey Marvin. focused Pro the of brands. Pro the we only Yes, thanks, growth. ad, the in the we thing started our ago, that we're

new experience. CRM, our Pro tailored the layout, the shopping like things So database, store the loyalty redesigned out building

in So of we Pro X accomplished that has team, the focus pleased believe of lot the we're I'm again, customers. team the our last their that new we with everything years. existing wallet very have customers, attracted growing and a And

Steven Forbes

just sized And CRM wallet to you color on? trip or data right, have. you're and or medium Any share you. of the of right then customer follow-up, Pro focused relates share Thank as regarding wallet it that can quick Pro share you data on small based that that the current a sort the share

Marvin Ellison

don't not share I share programs been it in can COVID. of in that pauses to it. rollout are Obviously, But you into exceeding competitive some I externally. we're leaning We're lot to with had expectations. the the we're What a say delays, We CRM, loyalty launch now going Steve, we detail. publicly that pleased or it. both due is for reasons, typically we've tracking of tell

We are visibility they're about buying, excited about overall about collecting. And of feel more on our buying and the the we're customers how amount they're it, feedback of what connectivity. just excited data the we're the how that they from

But details. specifically say externally in forward for that with going So progress great feel some I the we're not than to in share we're mean, point the more we about look to the the at business customer. sharing trajectory a to future other now, lot of we making

Steven Forbes

Thank you.

Marvin Ellison

Thanks.

Operator

conference. today's gentlemen, you. this Thank and concludes Ladies

time. Thank your at this you You for may lines your disconnect participation.

Lowe's Companies (LOW) 19 May 212021 Q1 Earnings call transcript