LOW - Earnings call transcript Q1 2025

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Operator

Good morning, everyone. Welcome to Lowe's Companies First Quarter 2024 Earnings Conference Call. My name is Rob, and I'll be your operator for today's call.

As a reminder, this conference is being recorded. I'll now turn the call over to Kate Pearlman, Vice President of Investor Relations and Treasurer.

Kate Pearlman

morning. good and you, Thank

Sink, Here with Executive Merchandising; Chairman Chief and Marvin McFarland, Chief President Financial Officer. today Bill Boltz, are Brandon Stores; Officer; President, President, Executive Ellison, Executive our Vice our and and Vice me our Executive Joe Vice

would remind website. found be our on Investor Relations you I notice is statements can forward-looking like morning, our in which to included press that regarding release this 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

we'll GAAP earnings Additionally, to of Relations items measures. discussing the financial quarterly in non-GAAP be of Investor section A these reconciliation certain can our found be U.S. website.

call I'll over Now to the Marvin. turn

Marvin Ellison

and Kate, you, and for today. good you everyone, Thank us joining morning to thank

marketing power improvement outdoor of launch home campaigns industry-leading data-driven early strengthened in and environment, assortment, spring delivered Overall, compelling includes win categories sales billion in discretionary same continued spring challenging with lineup strategy the down from our Despite to key our adjusted X.X% year. industry, our last by sales. customer well period in $XX.X quarter with the we Toro. as the we across DIY seasonal share big and pressure were spending take we comparable equipment ticket performed sales First better-than-expected which a the the seasonal

positive total online Pro our sales. gained our traction We home in strategy with and reflected growth also QX in

the this of disciplined our combination campaign and and with customer offers, will later garden and and Overall, in in year. efforts our or projects. also call. marketing store business. customers, we're lawn execution nimble ticket the strategy, time resonated spring maintaining productivity The focus of more provide on pleased strong we're all across on addition, we compelling Bill improvement satisfaction right smaller functional our PPI about excited with spring and while key areas especially capitalize of In brands, our on improved PPI detail initiatives us how perpetual more a SpringFest the Joe helped

Now turning to Pro.

I mentioned As improve delivered to comps are our the driving investments Pro earlier, increased Pro experience we improved and QX in positive sales engagement. strategic customer as

levels customer this includes in are as brand Specifically, with healthy our has well in This now line Pro tools that investments survey portfolio resilient core client customer. as proven service backlogs with with last relationships year. our to improve recent reflected expanded as strengthening the

pros continues strategy contractors, share Our as focus repair to and remodel small- trace such managers people. taking with the to on medium-sized property and

remains the of fragmented. represent these half market, Pro estimate Pros which We highly billion $XXX

supply are expanding to to medium-sized provide pros a We which handle growth, continue level to includes to Pro striving we service we invest trust of build order high branches as footprint Pro the us and also still to customers to leveraging of runway delivery significant around sales while ahead these retail our Lowe's drive also grow opening There while job profitability. in continue our small- with And credibility. country. site with new larger capabilities the our the to is to

to online. shifting Now

approximately In sales X%. up were the quarter, first online

continued offset improvement rates DIY in bigger conversion ongoing pressure Our categories. in our ticket in QX

have members with same-day in delivery same-day delivery last access OneRail. to first assortment our of delivery using our and mile our partnering addition options with Lowes.com home new wide on improvement platforms and to the quick partner partner DoorDash Lowe's their options complement expanded of across now we products is partnerships option country. our same-day These Instacart the existing improvement convenient and on these quarter, retail This home Shipt.

needs is objective we're to to need, tailoring make the giving journeys explore home and digital our however shop. unique to visualize simple, their type different experience access And for shopping support to products the virtual they improvement customers based customers of easier choose customer they on the for it and of also different we're possibilities And to home. reality Our mixed project. using

step Money, standard is quarter improvement offers for and exciting as forward Another This gifts. program the well our shipping home Lowe's toward as reward this Rewards. the for national customers needs of earning MyLowe's Lowe's points rollout choosing providing was to loyalty free for called MyLowe's program other DIY by designed

In addition, card. the customers day MyLowe's also can save Rewards with X% on credit purchases eligible every

to purchase the launch, matures, and also online. frontline for rallied Rewards to early around campaign, benefits. program customer educate each thank and to And this the promote We're like both in-store us with offers have I'd associates customer efforts MyLowe's the our adoption customers their our on them pleased tailor successful the to Rewards specific successful the data allow preferences. understand their will MyLowe's better and As and needs of individual and

the the and as some fans excited very home This NFL of passionate build fans tournament improvement U.S. the and to soccer base. USA football These who fans unique broader the speaking we're Lionel to welcome to trust the with beyond world, credibility the our rapid home lineup. customer the experiences a partnerships and also retailer reach soccer to striving XX with Copa America bring us soccer these alliance CF now Lowe's NFL. fans. player We're official opportunity the with million Now Inter U.S. the for growth in Club our reach help Lowe's team, of will best connect customers rewards fans team and are by and the offer new Miami in extending to more gives We're us to we're the of XXXX we in along partnership the MLS our fans excited Messi exciting sports not with

discretionary and pressures cuts, continue experiences a on still to like a view on preference of And update home the customer and outlook inflationary services turnover improvement but demand. showing sideline, for price provide mortgage wage interest consumer the on of cost Uncertainty the is and are higher improved concerns still Real the improvement stubborn living overall home growth the appreciation economy. uncertain. to state weigh and home I'd solid, around lower a expressing and the Now rates quick our DIY on housing the of towards about spending macro. rate remains

And while our of all drivers is to challenging we demand growth. confident read, for long-term supportive the core outlook the medium- near are as term to our still in industry remain

also commitment accelerated when market allow efficiently environment, perform the improvement us PPI market Our Lowe's share our not ongoing our recovers. only Home combined in positions with home Strategy for continued growth in to challenging macro on it Total initiatives, our investments this

and to Before quarter to their our our Lowe's extend my frontline to I appreciation the visited outstanding. our regions and associates and commitment close, I've communities. in I'd stores to for geographic X are first hard like simply work of in XX continued associates our frontline

that, over And turn to call with I'll the Bill.

William Boltz

geographic Thanks, broad-based improved Marvin, assortment challenging a to early resonated our in and pleased with which to spring And are offerings positive In Pro compelling good strong and Pro our improvement sales we customers, of home our X spring everyone. our divisions. spite offers. QX, brand as with service across and all morning, led comps backdrop customers responded

ever strategy featuring will traffic introduced QX, different sneak remainder our as were targeted broke across as digital went we for seasonal they these regions. SpringFest, year, doorbusters with outdoor offers purchases weather-triggered using also than the seasonally project multiple focused our such throughout live stores with important early and season more their local peaks with marketing SpringFest categories of on and In Winning is online the relevant into needs. times This the that by back often for goods. spring mulch, as soils, driving the spring customer come

hardlines. results in our to turning Now

Growth These ticket these efforts, categories. helped execution landscape and in was a in sales in comp transactions right strong lawn goods, and both in increases basis resulted the positive and paired with marketing driven X-year smaller by and which products in deliver X-year comp us projects sales live and on brands garden.

the brand, they be the offered with and are care these have proud be Sta-Green own that price with quality We at pleased won't and of that value private the beautiful traction bank. to products. Sta-Green a customers consumer in the provide also responded lawn break gaining as helps can to a our And lawn

For Marvin they even we also shop them plants mentioned, first we can are select need Garden lowes.com. the backyard. through some and conveniently delivered for power to spring time powerful them about year. and have this most lineup website purchase as as outdoor And excited new this are spring, products lineup on of customers our customers introduced and our what from Toro our equipment live their the order can items and goods already online searched now

John helped mower user products to both arsenal, mower Deere. SKIL, including brands unmatched Briggs walk to by position products as of and Toro which gas strong Lowe's added largest us equipment. Toro the the storage brand a Cobalt, with an that reducing at in in upright, now outdoor like propels footprint doesn't the with stored self-propelled best-in-class owners when lawn battery-powered patented behind as Stratton These CRAFTSMAN national innovative well speed the and the system of it We mowers sales their SmartStow, positive XX%, to personal allows this innovations selection power so walking. is comp handheld leak offers oil any technology, Husqvarna, retailer deliver already which these EGO, and included pace, store & up

Now building gears shifting to products.

with busy, remain fuel drywall, in and concrete positive and helping which insulation, materials, customers strength comps all supported building to block, roofing, that growth. Pro Our in

water with perform customers homeowners for tailored to Smith's job. pump a like will to they standard These heat such and water what improved to as heaters, added into innovative to standard confidence utility continue depth and also water outlet a compared Energy have that Lowe's in-stocks continue wall especially installation heater. the certified and market, with over our save in plug $XXX focus along electric Pro with give can bills to XXX-volt inventory heaters. models the Our well, complete localization easy products plug-in year Repair A.O. a on need Star efforts categories the maintenance assortments

Electrical, brand the client are professional. tools, tool for pleased HVAC and the of In #X we electrical with the performance

on and allows make to identify quickly turning are the not tools which the New for off. sales, client to and The credibility only finder, without also circuit our like us the electricians expansion panel breaker easy rebuild breaker drive and breakers of customers. breaker the connected introduction with to products brands it it Pro client outlets like

softer we the year. last of home saw these in to in bath with bigger line largely categories interior appliances where persisted. were decor, Turning demand and kitchens categories half results and second ticket like flooring, DIY Trends the in in

our both with value have value, customers And look unique, style is faucet, pressures. look go especially to easy our Products as steps. + inflationary is And roth Our to private they and homes. with continue them their you persistent the products X brand it. sink kitchen refresh for install given to to allen below don't install the like Harlow which simple really to what provide

and carpet spills to in Lowe's. through or brand from carpet STAINMASTER the Our and prevent defense leak most floor. the keeps helps with pet sub STAINMASTER exclusive trusted accidents pad PetProtect backing rug seeping is to is

to Turning appliances.

as delivery fulfillment markets, We new we Average expanding selling improve industry cycle our in these across is a delivery for selection discretionary model, share supported suppliers market continue with best-in-class appliance. to fast a market remain and next-day the as slowdown prices appliance values we an continue which industry our a important as are the compelling assortment, with including creates the in reintroduction continued to products. option most convenient the well broken innovation lead delivery and promotions the broadest which near-term of Despite solution, our pressured demand. challenges, customer as amazing pre-pandemic and replacing by

a first Lowe's GE liner dishwasher easy the with example its oven removable of safe, wash, great Range A kind is Freestanding cleanup. for making exclusive that easy is the with range

to on Moving productivity. merchandising

map. to continuing are productivity our against road PPI or teams execute improvement Our extensive perpetual

like one initiative, to in highlight we've This the of progress private made benefits brand our penetration. quarter, expanding the productivity I'd

national for brand private compared counterparts. value. at only brand-agnostic branded our is our a this The our are private DIY the customers offer with the product great our core of customers. higher for quality to products average style on products these typically and to rates strategy focus margin significantly brand provide do Not

lawn care allen As products, we flooring paint STAINMASTER are customer Cobalt from and and tools, products storage brand + portfolio out DIY private and and solutions, delivering roth line. Sta-Green to build we value power equipment to bottom compelling within to decor productivity to the the a products outdoor

for their extend merchandising to to our once like support partnership, in I'd vendors our team. ongoing their my close, of I again As appreciation services particular,

shelves our customers. allocate Red MST enable time and execute resets program associates Our into and XXX% our funds impact XX,XXX spend our stocked, as the I'd are macro they our serving associate it and our more our and to dedication environment. for with merchants Vest pleased MST also this is keep like And productivity. associates of to customer We navigate work having their dynamic this on thank experience hard

I'll and turn to Joe. you, now Thank call the over

Joseph McFarland

Good Bill. morning, everyone. you, Thank

improve thanking time, hard work our associates the begin satisfaction driving me as up quarter. their homeowners Let experience shopping while by our productivity XXX last frontline for pros our we basis were for Customer over scores same continue to points this and year company. at across

to employer choice commitment our the also our decision we As journey remain a we well-deserved focused work example customers' of our our our many fifth of experience off associates' our and spend our associates to on become ones, retail. An stores show their was the Easter our year, associates in to to loved on our close ways to improve for appreciation. day with giving consecutive of one we experience,

including We and continue we invest leadership replicate leaders mobility. program, associate we strong gives a best-in-class leadership have store to store wages, center, as internal our training development are spring University And higher which retention on development coaching. levels at and seeing staffing Lowe's practice and hands in training a

career. new and step department selling weekly and leaders help implemented their strengthen supervisors their skill also these that have We next routines in our their in for set stores prepare culture

of our reminder, XX% of leadership more roles. our hourly a than and leaders internally year started positions nearly store last filled store XX% in were As

enabling way omnichannel close help our everything get from culture associates is Another came they we is modernized system, our are strengthening our to selling stores through sales for. our which store within customers operating and

to style is want seamlessly and what them an looking stock store, a and order items. out in out check in-store can't they associates our assortment find find when or specific can they customer search need something our So of for the online combines that help online

our end much how couldn't made share from teams be productivity that be we've the on to given progress the are sales, misconception last in hard outside is nearing we driving remain that let Since me This some Lowe's from X examples. see of Beyond store A our must laser-focused supporting journey in, further be can the years. this truth. looking common productivity. hearing the

improved of First, self-checkout returns we way the end space. experience, optimized of store which our are selling the a through our an in only front process online stores, multiyear our of transformation X/X includes buy up proprietary and streamlined registers, a significantly front-end pick

Second, decreased vendor and and cancellation consistent technology. now systematically clear and return we through our rate reduced that's partnerships, through a applied process significantly damages improved have enhanced returns

of customers are the technology also our with a our shrink unlocks including to maintain that we PPI product that door associate road NVIDIA Third, just missed security an These also enhancing with performance customer's our needing examples prevention product new are traditional self-checkout. prompts new phone best-in-class with a AI ecosystem shrink find extensive We're during a piloting to of from initiatives. partnership in map items a key. with to protection few number instead scan

the strong for Winning Given our our is for quarterly quarter, associates hourly our of this XX% stores specifically frontline bonus, designed performance Together associates. qualified which of our

veterans. to Memorial I our approach we Day want As thank weekend,

to ranks parking provide XX% members our day with proud training executing we Lowe's are we during transitioning our associates, to camouflage of brands from work over We program supporting bring that, us and across closing, discount, the every see and experience In associates Defense I'm an commitment than In of work community. marine, productivity military service better have of vest hope with I'll military-friendly unlocking our even and a and will veterans. skills, spouses long-standing even more Brandon. the the leadership this a As our with while among military their our dedicated turn our and service. military spots directly to service. dedication military Day, associates the their Memorial last U.S. thanking off Lowe's company's it jobs to for value in better in top months I and experience our in Department and nearly XX,XXX to community. We customers deliver to a courageous for stores. With you join

Brandon Sink

associated quarter of our Thank a Starting We first retail earnings share business. our year, with you, of in GAAP per Canadian note, with results. sale Please QX $X.XX. Joe. million generated last $XX recognized gain diluted of the we

result, a measures my year. today to certain As from include comments will comparisons last non-GAAP

with transactions sales with pricing down was bigger homeowners sales appliance average comparable drove impacts ticket sales the combined Comparable to quarter lower projects. better-than-expected discretionary strong Pro, $XX.X pressure. improved execution First continue X.X% offsetting weather, down spring partly seasonal And strength X.X% as and larger in as delay billion DIY were of X%, declined with comparable results. ticket ongoing

margin. ongoing the offset Our points monthly points lower same earlier quarter, impacted X.X% XX while basis in April sales costs April partly year XXX last align effective SG&A well by we down year. adjusted monthly X.X% cycling Easter, effective pressures comps in adjusted at settlement. flow. February, XX.X% the in initiatives early last deleverage year's $XX.X in pressured This first prior declined rate. versus continue team and by with Because to cadence sales our basis initiatives. SG&A These margin largely by spring a as of Easter, revenue. legal traffic efficiency in modest down and we approximately from March each functional credit in on operating replenishment promotions partly amount. March basis comp optimize basis versus the by tax supply year, with was last offset tax and Inventory X.X% results largely of across PPI year's driving adjusted the Operating billion, as of in improve of XXX XX.X%, the chain April. Keep Gross by driven XX.X% benefited our this was to by of decline than and delivered sales, investments, was transportation timing and mind, by fell a was PPI company. which by our this billion spring was line as last lower were closed it margin was of year favorable product were driven in the March year stores in points XXX XX.X% quarter last $X.X points ongoing The rate patterns down sales ended the

on Turning to generated $X.X as quarter, X cash $X.XX $XXX and dividends $X.X at in million free We we we our capital $XXX ended million, a we per and million allocation. In in return We the capital million repurchased debt to first invest Capital X.XXx, QX continue billion expenditures returning above to initiatives. totaled delivered share strategic growth our flow. adjusted EBITDAR in shareholders. invested at shares paid of XX%. to billion $XXX for

year, Looking are forward full our year affirming today, to remainder XXXX of outlook. we the the

to a in DIY. and billion ranging range of $XX with comparable to sales We Pro to from continue $XX X% outpacing billion sales expect down down sales X%

year. $XX a the XX.X% with operating few keep expect to To assist cadence and mind of earnings in in of share approximately here full year to modeling, range to are your margin the the for per points We XX.X% $XX.XX. of

with first second the business, on in First, the comparable roughly in are quarter. line we quarter we seeing based to sales trends expect be the

third XXXX. to expect in over half the to second comp sales compares the continue cycle from improve that intensified as We pullback we of quarter DIY easier

in just an this it's trends in are are last because our forecasting As we I on mentioned the is call, the second demand that compares half. easier improvement year, this not

half rate due approximately we and second to under productivity flow-through, basis of QX of be margin points settlement. operating terms factors deleverage through operating largely QX, expect to the we of remain account, to pressure a In and margin cycling flow to in in improve the legal below Taking the these favorable sales prior expect year. into year rate XXX

I'd capital to strategy reiterate intact. remains that Before I close, like allocation our

closing, excess Home and through return target XXXX, business; the payout plan $XXX In flow remaining cash in dividend to shareholders third, on bond Strategy. free maturity cash First, use reinvest repurchases. to to investing million ratio remain in XX% then repurchases. a share the shareholders return cash share we our to through In focused second, our repay and Total we a

As Marvin against also PPI to we unlock XXXX. which map multiyear road are productivity a will of initiatives, continue well mentioned, executing beyond

recovers are positioned deliver We open improvement on to home sustainable to questions. we'll value. And it shareholder market well capitalize and up demand your continue for the that, with when

Operator

[Operator Chris Instructions] from with of comes Horvers the JPMorgan. question first Our line

Christian Carlino

It's Christian for Carlino on Chris.

the expansion dig that the of rate this phasing are on margin us build And help full the run Just think in point? there? of year. we vendor And the how gross Or Could to the over clawbacks about just guide? drivers some the gross margin. you gross seeing year broadly, flat should you does to over the margin understand of at relative

Brandon Sink

is for question. Yes, sure. the Brandon. Thanks This

are So the year, still be to margins flat. as look we it gross out full gross we relates expecting to and margins, for

competitive mainly strategy. And we PPI continue scale of early inventory in execute pricing be we as callback, in market the leverage bit we private drive brands, initiatives, Bill Driving to number initiatives. headwinds, of half some investment relates now. making as continuing nice back costs and price, and going our transportation those to carriers. improvements, there. everyday to from The QX, our our to lower X finalize quarters then progress turn investments in with benefit in PPI, cost be here in we next to sales as chain had to a of to a really new ongoing also more that the spring execute through it investments lag continue rates ongoing And pricing making we of against, defect a seeing then Our as the the over weighted. these as there's of We're we're delivery, Pro we're then rollout momentum supply that on our and efforts promos mentioned we fulfillment our many that tailwinds, expect the

but some higher and it expect and credit to credit mentioned on also pressure that to the able portfolio, costs there half side. year we as great then relates related shrink to So performance is roughly manage we the be label private first delinquencies borrowing to to flat our

We continue to there. roughly expect flat the year on

Christian Carlino

appreciate the really big but others color And I between prepared these versus some bigger in I likely disaggregate like trends about categories helpful. remarks, for guess, path X are and That's would appliances, the it. that maybe the you how ticket ticket big the sides thinking remodeling ticket you of Got seasonal more more financed oriented of broadly? and how are recovery

Brandon Sink

Yes.

look when with still pressure, We is out think we I the that called particular, related to and [ for greater that continue QX down continuing ], than XXX down large see now we of the Most X.X%. at quarter. in tickets right DIY, ticket we was X.X% big ticket where there trends to we're big right? saw

some of look that at impact There think is with from as of we level cycles. to some seasonal see lot there we replacement multiyear grills is pressure discretionary. continue I a from patio,

new effect home decor And occasion. we We we promo with higher sensitive ticket like that against to and appliances to are then pressure the back from emerging levels. And to as higher and flooring. big and dynamic categories pressure interest rates the the continues and also to bath, are XXXX continuing are normalize environment, rates those the see more get kitchen categories lock-in

that seeing boost to and much big continue We're Pro some helps we working business. that. with drive very the as offsets ticket. that through of to So our

average that the to year that ticket continue but work to flat, the be expect we're full experiencing. We to continuing of through definitely DIY for some pressures roughly

Operator

Guggenheim is Forbes line question Steven Securities. next of Our the with from

Steven Forbes

X/X the a it's if sort how curious sounds question on you about front-end on that of the It transformation way color maybe Joe we was the think waterfall the Marvin, here? work ROI comp could progressing through. any is whole for thinking should of But initiative. just of us I through you're as like we through on only lift maybe update transformation. we're and actually benefit what of of or sort the the sort

Joseph McFarland

Yes.

I for we're are give benefit, won't comp seeing. but there several thanks And so the Steve. question, things that the

the road a map through. laid we user-friendly have proprietary hand-in-hand. of work tech think about customer Seemantini's along the leadership, have And detailed we with our in home under X/X past, talked improvement systems the We with the We're way the as team when the for teams self-checkout out. I about we've the partnership

spoke assisted incorporating the self-checkout. to pick technology launching our we're gig gig and from just that drivers enhanced NVIDIA, in network. the for in delivery all addition, our So online we store we about, And our of our ability pickup buy finished up

pleased. we're of And very scores So and we're third the improved really through again, way associate the pleased customer where satisfaction has engagement improved, have with at.

Brandon Sink

opening sales up end front increased but or not just just the the really speaking, call the improved payroll experience mentioned with going front and I'll X/X we're that out but end, we've you add, improved then costs, returns We're of Steve, on the we're lower as customer the comps, way higher only as experience And space BOPIS. financially the seeing improved and seeing. through, we're pleased with benefits to we're that

look we pleased X/X there, as our at of the way the just with there. of in, we're KPIs So all progress

Steven Forbes

sort talk coming consumer through anywhere how the expect any weeks? early to reads way or seeing conversion? to the more, like approach as you And there from we you What and of away a through Memorial you're sort the buy of from of consumer maybe just is any over in engagement Day save that -- of follow-up, expecting of Like, the to a sort sort appliances in and the bundles sort strategy. here and terms engage think strategy more here of categories change promotional and are

William Boltz

this Steve, Yes, is Bill.

what buying item single from seeing been with pieces that. And now so really market. last that appliances [ over seeing really shift the We've pieces the multiple XX seen to the consumer trends duress X we've to are months in in to similar we're ] very

to And be time in we've unit so we're And that pleased she able and met. making wants meeting that's during that pick drive to sure where we've pivoted units be her our share up continued market a really to efforts frame. that we're down where to

going efforts look that remarks the that's really called putting about before, on type go going and when prepared product. to Day respond I GE seeing great to But floor, the it you oven as talked out we that's seeing we're And so drive we've that's that the her And talked throughout what a you're with see difference innovation, of year. the as Memorial of the we're you're also you're remainder And about. us at that I seeing team also in appliance wherever my is doing, on through the innovation today.

you've value-conscious got pay innovation and well. to offered a that's when that's to that for as not afraid consumer is You've got a her opting consumer in

So to sure met. to or she where wants we we meet be that make want

Operator

question the with is from Morgan Stanley. of next Simeon Gutman line Our

Simeon Gutman

want to normalization. signs about talk and any the I of backdrop

negative If going business big a the we see you Brandon, macro know dependent. part says to of that's third I can But year. ticket model the I guess, a talk about more traffic there, I we're versus dependent. -- not That's end And turn of comps. the mentioned is is by year 'XX, that going guess to of are you

of is the part you're indicator So curious. And paying turning. gives you that a that category by to also, leading that's of attention if a way, that there's anything

Brandon Sink

confidence for We're we're projects. to at an home macro I Yes. what earlier We're the the inflecting. not improvement mentioned Simeon, see to ticket just discretionary as bigger it customers, watching seeing. moment. to consumers reengage specifically relates uptick have that the need on is we for that seeing ultimately us first,

through is I we're to where system, on turnover. historically see continues and which affordability continue that adjust to digest the housing impact monetary an have working and way watching we and outsized challenges to think consumers the its low tightening,

on to seeing So that point. not kind Consumers continue sidelines. we're inflection again, of remain the

multiple As looked the on And catalyst. Marvin half, is the as at half, we're second my understanding it We historical remarks. X time and second start across half I year-over-year we moving improvement up geographies, the ticket as year. mentioned, expect getting prepared the Pro we waiting back not we an just into about cadence, feel of in looked that to comfortable, as timing half the the the macro, bottoms frames. over down, easier tops a we said ways, [ of at We've But that. different don't of comparisons. back just relates was first more transactions DIY number a and look It's to of down of necessarily sort mix when the this ] categories or and at in improving comp and and in this

Marvin Ellison

today. But And that this of thing think of stronger, come And of reflects with. chain, we're to through level We've Marvin. is executing it headwind assortments. And company. focused in environment, is spite come more positioning we're ourselves Simeon, that much really QX I'll high downturn merchandising invested we're we're decides IT out we're challenges a a to as dollars turn, out managing our we're going better in that broader much a our at billions words, this macro in systems, a whenever only really company. of I digital The that platform, some more unique productive dealing any of is facing other theme the on. add supply the as to infrastructure, store omni macro of

capital strategy, it. we're predict to although for to commitment happen, to our sure can't up, we full to start so Brandon outlined going And be prepare going show and we're we're whenever allocation advantage take to positive trends continue And to to to to it going the going continue ready ourselves. invest, we we're our make of going when that's

Simeon Gutman

is margins incremental turns, cycle you're there I Brandon, out a you what or recovery? places that when into typical be margins Are an business aren't, faster the than there guess, upturn incremental now? held such Marvin into coming you've housing that that made to spending back that, on to case spend Related a

Brandon Sink

Simeon, No, back believe to and PPI would Committed say we're and to turn initiatives business in I our trajectory still place been holds and a term. forward map committed to the we've and in haven't to long long-term whenever all. the been in line long-term once top road to algorithm starting looking kind that. But that happens. comps mentioned, be, terms may fully investing Marvin that pulled growth of we committed we the for as projects at And major of capital, fully long-term

Operator

line Lasser UBS. is with from question Michael the Next of

Michael Lasser

looking expect the that Given you a the will as the benefit gross it driving how to of more state you willing now home are and at trade-off improve over with currently share cycle, you course the margin, the versus recovers. your of cycle year, trade-off gross view sacrificing to understanding sales are this improvement between margin market that the make be the

Marvin Ellison

Brandon let part the This take I'll is I'll some Marvin, perspective. of and first give additional that. Michael,

currently the said think spend. to customer the the where to for And looking customer We're trying for is it return price, does low not equate it you if dollar I Bill meet a is value to at. customer the value, always equates great best.

early Brandon and that so make early an investments And events to outperform with that the roughly flat. we customer can the and we per mentioned, to gross margin still and customer win and give any in activities margin. And earnings opportunity initiatives fortunate operating share recover really as the we us in relatively place spring feel that back year have we'll in have confidence half in then that decrement

So the customer pull chain philosophy, the you and execution get a that. us to aggressively do throughout allowed supply And great have we're all the serve occasions can the make along believe to that be the the the simple levers we very and stores and win you we if that his able to spring well. and shopping we season, spring is in the team, to during early, with in and year sure customer multiple going Bill

of on how think the give balance And we so specifics you year. I'll it philosophy, about more let for that's the the Brandon then overreaching

Brandon Sink

our pleased add, Yes, the us QX, actions, to our really able our I we that I still approach, that start were of bottom bit year the see can saw the number over pleased as just the move and balance said, to manage especially were with those execution, Marvin Michael, and go-to-market from really and deliver through ability think highlighted customer margin the SG&A we that of within how we strategy, marketing year. as we pivot last of we change to win a but we we line did little would pressure and helped believe, confident value, portfolio behavior we manage as half our that offset and back

tail of do gross You as to expect year start to some in start these margin off PPI to we we mentioned pressures accelerate. to move through the

we're the delivering So guide. top both our committed line line with and the to in line bottom

Michael Lasser

in that rolling loyalty is experienced from far? course out And DIY get the the in question the are year. while given see there contribution like that from seems half follow-up My -- embedding you that some so lift first of probably It been Okay. easier to What the has do you've to guidance? the in factor full year from you're the half, comparisons back the program. expect the order performance on what to over this

Marvin Ellison

system. is really a we and associates members the very we're they app have the Well, Marvin. operating specifics it active Mike, behind the retiring really in and is making get of benefits educating to articulating I The process operating a lift. how pleased on and this that customer we in simply value. could the loyalty were still out But rollout spotlights really us downloads, rolled sure program is launched this was engaged, was smooth, of XX-year and which because not remind for modernizing now initial you ago. were of March. program going. our intents not and year store was store well the the going all focus We purposes, into We're getting in as it everyone, system, the The engagement with tremendous enrollment, the and

is believing it's the our if also Is currency, from a able customers the progress the the be additional we're use we'll but to year. early, we're more trips beneficial that. customer year but on it And simply serve be to think the you throughout updating our we'll external objective you benefit do results, able So to We the only data customer to forward new experience. the with to is we'll and community just look that and making. take the we're get effectively. throughout pleased to Data

Operator

with the line from question is of Greg Evercore Melich next Our ISI.

Gregory Melich

like wanted to cadence. still some up pressures. I on follow macro It the comp sounds

If you the comp X ago to How much was year. improvement reported, and ] is coming doing [ ] that traffic what cycling [ at the negative X a happening the of for ticket you're X you look versus negative year improvement? just from

Brandon Sink

traffic to of The Brandon. that's is Yes, going Greg, this majority be related.

which DIY that ticket seeing strong we've the to function year and related, pressure, it's remainder and pressure, at I we're the here we the look expect ticket flip second as some ticket as over ticket the of run hold, breakdown pick includes shifted really the course smaller in the see we QX, the as to ticket and across we're the Pro saw seasonal I some of side has the down and we of the really the boosted into for as growth on is, year pressure. as a of to for the second year. appliance think historical second the also cycling cadence which transactions. transactions, the what ticket But much a relationship improve, of and then in I'll continues year, us, again, the transactions is up. And promo accelerate just part, of then expecting mentioned, the we're, year most half helping mix ticket consistent projects, continued again, the half and to start more between to average we the big-ticket half up transaction of discretionary going the get over we're slight course as And from of

Gregory Melich

and margin. then to right on Is be a that expect year, still second And then XQ down It's Got XX up it. half. bps but flat you'd in the the back that? to to gross similar the way it for the follow-up quarter in model the

Brandon Sink

flow and be through supplier into PPI -- improved QX, the the some clawback specific we as some some cycling, the to we and half the to pressure pressures as I to of There's of we're the but pressure second QX then expect sure, a to to some seeing and just half, benefits out. the second started of timing year. number last of the rate with put second in supply investments will see. the on some timing started similarly a do pressured come pressures chain delinquencies through credit with acceleration start Again, But see continuing of credit that's issue interest cost that half of the a year ease. the for we're that we of won't get in

expect we to So well. out as smooth that

curve the of shape the there. of sort that's So

Gregory Melich

have margin may pressure gross but it, missed part the program I was or new in XQ no? reward the of

Brandon Sink

timing scaled that. at significant Not we of when point, given the just this

Operator

from line is Barclays. Seth of Our next with question Sigman the

Seth Sigman

I played want the talk quarter out. about how to

think So reported versus bit started originally. off little could then how better? an was And How areas driven by the ahead other improvement a see you weaker do as in seasonal of you quarter you about maybe did much that have of came some forecast. come that in

Marvin Ellison

played from cadence respond broadly out the standpoint of was the it great customers hand I'll the really about But of Bill. the dynamic I'll it over We weather it. some walk driven how by initiatives. of QX. the how really let flow. impact take feel and good I'll to through kind initiatives to was of and first the the SpringFest specific Bill weather to of feel some with part, initiatives how in the mean and then execution. I about this the We a a sales

William Boltz

into of storm weather. to the were able really really north we new able remarks, saw for Seth, to for well to SpringFest as south to different seasonally navigate that us some our we took that was relevant. south of weather We Yes. Toro some think really did going north. those But that -- then nice out bit job took Thanks, We're new marketing. And approach the products, I of offers got difference sure target in respond my And a prepared took we in said March, slightly advantage little put then that. brands. We making had us. happened we we this we that were that which big carried our a April. geo-targeted Marvin. year campaign. is We I We teams a And a to approach, with favorability there and

EGO see perform to continue We well.

the to question seen growing. We continue I advantages, products with was respond in anything the we've said weather that well. that now asked perform earlier is consumer done, We've innovative a the see earlier, grass as around

buying they're there zero-turn So full-size mowers. out gas buying They're riding grills.

now we So we're Day, seeing front that got Memorial into go QX, got as us. of And -- X, we've we've in work. Day July Father's

finish we to advantage got those the as take out we've So events of quarter.

So and those that out we've are in quarter, team, garden was the play getting had their mulch, in weather, lawn And yard really as that ready customer the results. And with soils, they nice really spring. early live advantage. the results it where events that goods first of our in we've with I there seen traffic-driving driving said, took and had advantage

that drivers. was the really So

Brandon Sink

Brandon. this Seth, is

thing. Just one more

spring beginning years. had the the recall drag last plan X $XXX of to at the million about year, years Just we X a you we the called last unfavorable out season, weather a as normal more much in and related for did

that. So cycling against

of moved the couple Some over QX that of years. recovery last into

for at looking also embedded we're as QX year. our that's this So into outlook

Seth Sigman

it. sense. makes Okay. Got That

those improvement customer coming Pro-oriented broader performance perspective just in share categories? and doing Just on improvement wallet Obviously, Pro related context positive the And that any in or to drive your or saw you if just a lot market that. to you're that whether on question from share quarter. that this the guess, sense any back growth I gains there's is business of a some any going there? reflects But

Marvin Ellison

our strategy. very think I overall, with pleased the Well, performance of we're Pro

loyalty we've you to quantities in brand tools, things equal great assortment, a service that inventory, and I that X-year to it that from economic on know, these improving through adds a customers with great is mean, been just professionals, a HVAC the Bill on win investment to and and like adding back a some years trying of relatively last survey it's shared, for credibility for fight backlog continues journey #X the customer mentioned customers. And the client in to performance been and stronger results is their I, brands both from the national digital As bringing the of levels, platform, addition headwinds job-like of investing we resilient turnaround that the electricians this to brands, the to past, resonating year. program the that's like

overall, other internally little Joe of looking that's as think at to So we're we're driving get to bit back improved not or not to share it, business us resonating the talk don't want determine driving or were at let much this allowed look, is, some just we that as whether really we execution positive. a I'll And and initiatives much just that that. That that is results. about taking

Joseph McFarland

we've made, our Marvin. Thanks, delivery has called for about them Job-like orders. Marvin but also you out, out. Yes. larger site the some has Seth, Bill enhancement them safety quantity, as think that in our investments called stock, of job

If program, Pro, you or think about of the our loyalty maturity of wallet. in growing CRM program our share

backlogs Pro We the had type. continue of look and the labor Lowe's steady the And dimensions Pros mentioned, then stable our that survey at been and credit, expand to and supply. materials, The project there. Marvin [ ], we have the from health

customer, making in-store, And gains both online. this and product-wise so we're with pleased with we're the

Marvin Ellison

estimate to focused Seth, at that's small on And close just that just serve medium [ I'd really market we customer a billion level ] that high a we Pro. very We're discussion point. and can Pro opportunity. with the additional that's $XXX And the one

that squarely customer leverages focused That And store. so we still the on customer. are

the well. to to customer our that expense in in make capabilities, talked footprint about. without of serve fill We it estate investments to having as we can addition fulfillment can real Joe dramatic For existing leverage op productivity do the in

have are macro. we hopefully in difficult we strategy them, head business So the reflected see direction confident spite right in our investments still this a make, very working continue the to make we'll very results. to We in other is that and that and is will of

Operator

question next Peter Baird. Benedict from Our is the of from line

Peter Benedict

and also just the we scales? guess should of curious on maybe in think on But private any label much the didn't And maybe there, comment here I perspective just the associated forward, credit it lift that what DIY how guess, an first in P&L credit been about new impact program? with you're sign-ups, this historically program, term private have the for going on a longer guys that has level here I possible quarter. the what's seeing on what I as loyalty how it know you means,

Brandon Sink

the question. Brandon. This Peter, thanks is for

-- Super to a with We're visits pleased the get Marvin this overall and hit enrollments Just program from points create the to further with loyalty our seeing again, to with what but the membership our on our time, drive are over more drive bit, personalized data redemptions. and associates. managing goals stickiness standpoint the our ability DIY repeat customer with marketing. engagement and spend we're

some to effectively success from of DIY financially it, You to of gauge trip mentioned it's see revenue we our annually sort one That's customers. targeting as we're upside more the and going that. take time

year. the we we over out top that of credit building the course play So bundling and on the the to we're terms going in to we with X% program, to then work have And make of and mean, think are overlay drive I we're and watch of that continue to the that resonates value customer, really offer with a able credit It's penetration that increased best-in-class. going there, believe financially. is to

a So we think there. win-win it's

Joseph McFarland

kind first we to and that as had Day, Peter, as incremental well we with rolled with loyalty members our perk loyalty new Brandon to associates add with our and members Mother's pleased the ability of We're members. the on engagement quickly. the gain

very an engagement, early with. we're Day as so And example there, Mother's the pleased

Peter Benedict

the then some guess balance steps would for I guys capture That's over like I some -- you be around during the great. here And the just just my to the sounds strategy mean it of clearly follow-up spring the business. go-to-market plans took year. incremental

how curious events think the guess, to help not, you about is lever half of to of second the kind balance trend the those -- of to respect I about of promotions. pull comps back promotions of that think need year, year in willing As that you'll the with pull? be layered kind you or to you're improved. get year, the a thinking the If or comp Just half have you additional,

William Boltz

it's Peter, Bill. Yes,

And so the environment promotional remains stable.

that center year, crazy. to introduce in transition. We're into into key anything out and set been year. obviously, nothing similar be the there December-January We're to doing. we've with We half sure frame. and there relevant our we're and holiday seasonally be going But those Day. South into stores categories, the that the to goofy so the as We're to fall make to make going consumer want as Labor of transition for time go go for won't be radically Deep We're as the in we'll spring fall go we'll And going Halloween. seasonal relevant to out comes second seasonal make we what we're the those we half going be that relevant with gift back introduce going happen that that of of will but categories, to

And how to going approach so it. that's we're

Operator

with from comes question of Matuszewski line Jefferies. final Our Jonathan

Jonathan Matuszewski

regional to I dig wanted into trends. First one,

was the worse less It regions the peers recession. have calling enter the West. been Some housing first in out one trends to of

XX less like regions So geographic are ] the [ trends there? looks outperformed year seeing average. this company you worse It

terms seeing first in detail that my you're more question. would any So helpful. That's be of variability regional

Joseph McFarland

But Jonathan, an overall our West and geographic seen geographical Joe. where said, we've seen the standpoint, best we've is From we our a Thank this great is QX. performance great weather, question. from performance. standpoint, for as you for

Brandon Sink

regions. consistent I Jonathan, our just Yes. outperformance all Pro And would across add, of

pleased with then ongoing big-ticket conversely, that. uniform So DIY discretionary. really much pretty pressure And in

and pretty So across on side pressure seeing and Pro broad-based no regions. the differences we're real the that's both what been in

Marvin Ellison

Yes.

But continue evaluate teams well of initiatives comment only outperformed. Bill's in best of rural West I initiated our overall overall, and to that apparel those and rural locations, to of stores to is with performing make, be categories we that think the stores the those I the continue really continue Jonathan, our expansion within the geography some in our subset and pet perform environments. the will

all And is really As the set strong a kind stores watermark of among Brandon widespread was in high rural mentioned, geographic locations. Pro performance. at the of our performance

Jonathan Matuszewski

quickly, then I just back circle That's questions ticket. And earlier. big were to really know just on some there helpful.

So clear, over embed what [ for to annual Just right? the guidance does down transactions were ] of midpoint around X.X%. be ticket, comp XXX big your

sequential comp does of for declines the year-over-year X% over throughout the So [ XXX you rest to requires that purchases decline year improvement basically to for expecting continue or X% in 'XX. ] are that

Brandon Sink

we're of saw macro more terms on in of have an performance standpoint, we I expecting dollar Jonathan, Again, the second improvement absolute same sort just think half. what in. don't Yes. of We embedded any

categories, year, see So based these the from these in expecting started we're the half on of across comps we last as similar move performance we're but the in to cycling standpoint downturn should significantly second when an and improve absolute again categories we what through the just year.

Kate Pearlman

today. We quarter us on forward look with earnings speaking you Thank all August. our call to for joining you in second

Operator

the Thank you. This concludes Lowe's First earnings Quarter XXXX call.

You may disconnect. now

Lowe's Companies (LOW) 21 May 242025 Q1 Earnings call transcript