DELAND, Fla., June 23, 2025 (GLOBE NEWSWIRE) -- Battery Tender by Deltran, a leading brand in battery charging and portable power accessories, is expanding at Lowe's stores with three new products. The additions include Charge N Start 1120 Battery Charger and Jump Starter Combo, 800 AMP Jump Starter and Tire Inflator Combo and Power Tender® 15/8/2 AMP Selectable 12V Battery Charger. This expansion brings the total Battery Tender product offering at Lowe's to seven, making it easier than ever to find reliabl ...

Core Insights - Costco Wholesale has delivered exceptional returns, with an investment of $10,000 in 1990 growing to over $400,000 today, highlighting its consistent performance [1] - Despite strong historical returns, Costco's current price-to-earnings (P/E) ratio of nearly 60 is the highest in over 30 years, raising concerns among investors about its valuation [2] - The article suggests three alternative companies—Floor & Decor, Academy Sports, and BJ's Wholesale Club—that share Costco's business model but are currently valued more attractively [4] Company Summaries Floor & Decor - Floor & Decor operates a high-volume business model similar to Costco, focusing on fewer, larger locations to enhance profitability [5] - The company experienced a 1.8% decline in same-store sales in Q1 2025, reflecting broader trends in the home improvement sector [6] - Despite the slowdown, Floor & Decor maintained a profit margin of 4% in Q1, indicating consistent profitability [7] - The company has plans to double its locations to 500, which could significantly enhance shareholder returns if executed well [8] Academy Sports - Academy Sports also follows a high-volume store model, with 303 locations and aims for first-year sales of $12 million to $16 million per new store, providing operational leverage [9] - The company plans to open 15 to 20 new locations in 2025, contributing to overall sales growth [10] - Academy Sports is currently trading at a P/E ratio of just 8, significantly lower than Costco's, making it an attractive investment option [11] - The company is rewarding shareholders through a growing dividend and stock buybacks, reducing its share count by 20% over the past three years [12] BJ's Wholesale - BJ's Wholesale is the most similar to Costco among the three companies, but it is trading at a valuation more than 50% cheaper than Costco [14] - The company has a strong membership model, with membership fee income increasing annually for 25 years and a renewal rate of 90% [17] - BJ's plans to open 25 to 30 new locations over the next two years, indicating potential for meaningful growth [18] - Overall, Floor & Decor, Academy Sports, and BJ's are positioned to potentially outperform Costco stock over the next five years due to better valuations and growth rates [19]

Group 1 - The overall health of homeowners is strong, characterized by a robust balance sheet, strong wage growth, low unemployment, record equity, and an increase in personal disposable income for the first time in a while [5]. Group 2 - The conference featured key executives from Lowe's, including CEO Marvin Ellison, CFO Brandon Sink, and Vice President of Investor Relations Kate Pearlman, indicating a focus on consumer growth and e-commerce strategies [1][2][3].

Summary of Lowe's (LOW) FY Conference Call - June 11, 2025 Company Overview - **Company**: Lowe's (LOW) - **Event**: FY Conference Call - **Date**: June 11, 2025 Key Points Industry and Market Conditions - The overall health of homeowners is strong, characterized by a solid balance sheet, wage growth, low unemployment, and record equity [5][6] - Personal disposable income is growing faster than inflation, which is a positive indicator for the DIY market [6][7] - Elevated mortgage rates are creating headwinds for home improvement, with housing turnover at its lowest since the 1990s [6][9] - Short-term borrowing rates are also affecting discretionary big-ticket DIY projects [6][10] - Despite current challenges, there is optimism for medium to long-term demand in home improvement due to factors like aging housing stock and available equity [7][8] Consumer Behavior and Demand - Consumer sentiment remains healthy, but affordability challenges persist due to high rates and inflation [9][10] - Approximately 75% of mortgages are fixed below 5%, leading to a "lock-in effect" where homeowners are hesitant to move [9][10] - There is an estimated $50 billion of pent-up demand in home improvement projects, as these projects are often delayed rather than canceled [16][17] - Seasonal demand has met expectations in favorable weather conditions, indicating a strong business strategy [23][24] Tariffs and Global Trade Policy - Lowe's has about 20% of its cost of goods sold exposed to China, with recent tariff escalations prompting a pause in activities from that region [27][28] - The company is diversifying its supply chain and exploring alternative countries for sourcing to mitigate tariff impacts [29][30] - Lowe's is committed to maintaining competitive pricing and market share despite tariff challenges [31][32] Strategic Initiatives and Transformations - Lowe's has undergone significant transformation over the past several years, modernizing its IT systems and supply chain to improve operational efficiency [41][42] - The company has reintroduced national brands to better serve professional customers and enhance credibility [56][58] - A focus on segmentation has allowed Lowe's to tailor its offerings to different customer demographics, such as rural and urban markets [48][50] E-commerce and Online Growth - E-commerce has grown from 4% to approximately 12% of total revenue, with ongoing investments in digital platforms and user experience [66][67] - A partnership with Miracle aims to enhance online marketplace capabilities, which is expected to drive further growth [68][69] - Over 50% of online orders are fulfilled through stores, showcasing the integration of online and physical retail strategies [71] Financial Performance and Capital Allocation - Lowe's maintains a consistent capital allocation strategy, targeting a 35% dividend payout ratio and prioritizing organic and inorganic investments [72][73] - The company has paused share repurchases to finance the recent ADG acquisition, while focusing on maintaining a strong credit rating [73][74] Future Outlook - Lowe's plans to open 10 new stores this year, with a run rate of 10 to 15 stores annually in the coming years [64][65] - The company is well-positioned to capitalize on recovery in the DIY market, leveraging its total home strategy and operational improvements [45][46] Additional Insights - Weather is a significant factor influencing business performance, particularly during peak seasons [21][22] - The company is focused on enhancing its loyalty program, which has around 30 million members, to better understand customer shopping patterns [52][53]

Core Viewpoint - Lowe's Companies, Inc. has completed the acquisition of Artisan Design Group for $1.325 billion, enhancing its capabilities in the interior surface finishes market [1][10]. Acquisition Details - The acquisition was fully funded using Lowe's available cash resources, and the company has suspended its share repurchase program for the remainder of the year [2]. - Lowe's plans to repay $1.75 billion of debt maturing in September 2025 in conjunction with this transaction [2]. Strategic Significance - The integration of ADG allows Lowe's to expand into a complementary distribution and installation channel, enhancing its reach beyond traditional retail operations [3]. - This acquisition is expected to be accretive to Lowe's earnings per share starting in fiscal 2026, significantly improving its Pro customer offerings [5]. - The transaction provides immediate entry into a $50 billion market characterized by fragmentation, with increased construction activity projected to drive demand [6]. Market Opportunity - The U.S. housing market is expected to require approximately 18 million new homes by 2033, indicating sustained demand within the professional segment [6]. - ADG generated approximately $1.8 billion in revenues in fiscal 2024, and Lowe's anticipates continued growth from this business due to operational synergies and increased scale [7]. Growth Factors - Lowe's has demonstrated resilience and strategic focus, particularly in its Pro segment, which has shown mid-single-digit comparable sales growth [11]. - Digital transformation and AI integration are significant growth drivers, with online sales increasing by 6% year over year [12].

Core Viewpoint - Lowe's Companies, Inc. has successfully completed the acquisition of Artisan Design Group (ADG), enhancing its position in the home improvement market and expanding into a $50 billion market segment [1][2]. Company Overview - Lowe's is a FORTUNE® 100 home improvement company with over 1,700 stores and approximately 300,000 employees, serving around 16 million customer transactions weekly [4]. - The company reported total sales exceeding $83 billion for the fiscal year 2024 [4]. Acquisition Details - The acquisition of ADG, a leading provider of design, distribution, and installation services for interior surface finishes, is expected to accelerate Lowe's growth in Pro planned spend and expand its distribution channels [2]. - ADG has established a strong reputation in the industry, achieving high customer satisfaction scores from top homebuilders [2]. Advisory Information - Centerview Partners LLC and Greenhill are acting as financial advisors to Lowe's, while RBC Capital Markets, Goldman Sachs, and Robert W. Baird are advising ADG [3].

Core Insights - Lowe's Companies, Inc. has increased its quarterly cash dividend to $1.20 per share, reflecting a 4% increase from the previous dividend of $1.15, demonstrating confidence in long-term prospects and commitment to shareholder returns [1][10] - The company has a strong history of dividend payments, having paid out cash dividends every quarter since going public in 1961, with over 25 consecutive years of annual increases [3][10] - Lowe's generated $2.9 billion in free cash flow in Q1 of fiscal 2025, which is sufficient to cover its $645 million dividend payment and support ongoing business expansion [6][10] Financial Strength and Growth Strategy - The dividend increase indicates Lowe's financial strength and commitment to delivering consistent value to shareholders despite macroeconomic challenges [2] - The company is pursuing growth opportunities, including a $1.325 billion acquisition of Artisan Design Group to enhance its presence in the Pro customer segment, financed through cash reserves [7] - Lowe's has a disciplined financial approach, with an adjusted debt-to-EBITDA ratio of 2.99X and a strong return on invested capital of 31%, allowing it to balance shareholder returns with growth investments [8] Growth Drivers - Lowe's is experiencing growth in its Pro segment, which delivered mid-single-digit comparable sales growth [11] - The company is advancing its digital transformation, with online sales rising 6% year over year in Q1, supported by the launch of the AI-powered MyLowe's adviser [12] - Lowe's is expanding its product marketplace through a partnership with Mirakl, enhancing offerings without increasing fulfillment costs or inventory [12]

Financial Data and Key Metrics Changes - In 2024, the company reported total sales of $83.7 billion, a decrease of 2.7% on a comparable basis [14] - Adjusted operating margin was 12.3%, and adjusted diluted earnings per share were $11.99 [14] - The company returned $6.5 billion to shareholders through dividends and share repurchases [15] - A 4% increase in quarterly dividend was approved, raising it from $1.15 to $1.20 per share [15] Business Line Data and Key Metrics Changes - Pro penetration increased to approximately 30% in 2024, up from 19% in 2019, with mid-single-digit comparable sales growth for Pro [16][17] - The redesigned Pro loyalty program, My Lowe's Pro Rewards, was launched to incentivize repeat purchases among small to medium Pros [17] - The first online product marketplace in home improvement was launched in December 2024, expanding product offerings without carrying inventory [19] Market Data and Key Metrics Changes - The acquisition of Artisan Design Group (ADG) aims to serve a larger pro customer base in a $50 billion market, addressing the need for 18 million homes in the U.S. by 2033 [22][23] Company Strategy and Development Direction - The company refined its total home strategy in 2025 to align with home improvement demand drivers [15] - Key pillars of the strategy include driving pro penetration, accelerating online sales, expanding home services, creating a loyalty ecosystem, and increasing space productivity [15] - The company is leveraging generative AI to enhance customer and associate experiences, improve forecasting, sourcing, and inventory planning [21][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment due to inflation and higher interest rates but expressed confidence in navigating market uncertainties [14][15] - The leadership team emphasized the importance of diversity and inclusion as a core value, contributing to the company's success [24][29] Other Important Information - The company has made strategic investments totaling over $4 billion in wages and benefits for frontline associates since 2018 [30] - The company sources approximately 60% of its purchases from within the U.S., equating to $30 billion in annual spend [33][34] Q&A Session Summary Question: Why did you scale back DEI because of pressure from conservative activists? - The company stated that no changes were made to its diversity approach due to activist pressure, emphasizing its commitment to diversity as core to its values [28][29] Question: Will you be increasing wages to be more competitive? - The company frequently monitors and adjusts wages to remain competitive, having invested over $4 billion in wages and benefits since 2018 [30] Question: What are you doing to improve your management of inventory? - The company is pleased with its inventory management, leveraging technology and AI-driven solutions for better replenishment and demand planning [31] Question: How do you plan to control your cost of goods given increased tariffs? - The company has diversified its global sourcing and currently sources products from over 100 countries, with 60% of purchases made in the U.S. [33][34] Question: What is the board's plan for downstream profits from AI? - The company aims to enhance customer and associate experiences through AI, which is expected to deliver improved profits [35] Question: What do you intend to do to help stores run more efficiently? - The company is committed to investing in technology and process improvements to enhance store operations and customer service [36][38]

Financial Performance - Net earnings for the three months ended May 2, 2025, were $1,641 million, representing 7.84% of sales, compared to $1,755 million or 8.21% of sales for the same period in 2024[12] - The company reported a comprehensive income of $1,638 million for the three months ended May 2, 2025, compared to $1,751 million for the same period in 2024[12] - For the three months ended May 2, 2025, net earnings were $1,641 million, a decrease of 6.5% from $1,755 million for the same period in 2024[48] - Basic earnings per common share decreased to $2.93 from $3.06, reflecting a decline of 4.3% year-over-year[48] - Diluted earnings per common share also decreased to $2.92 from $3.06, marking a 4.6% decline compared to the previous year[49] Sales and Revenue - The company reported net sales of $20,930 million for the three months ended May 2, 2025, down from $21,364 million for the same period in 2024[24] - Net sales for the three months ended May 2, 2025, totaled $20,930 million, a decrease from $21,364 million in the same period of 2024[29] - Home Décor net sales accounted for 36.1% of total sales in 2025, while Building Products and Hardlines represented 31.3% and 30.6%, respectively[29] - Cost of sales as a percentage of net sales was 66.62% for the three months ended May 2, 2025, compared to 66.81% for the same period in 2024[53] Assets and Liabilities - Total current assets as of May 2, 2025, were $22,675 million, slightly down from $22,750 million on May 3, 2024[14] - The total liabilities as of May 2, 2025, were $58,626 million, a decrease from $59,971 million on May 3, 2024[14] - Cash and cash equivalents at the end of the period were $3,054 million, compared to $3,237 million at the end of the same period in 2024[17] - Merchandise inventory – net as of May 2, 2025, was $18,335 million, compared to $18,224 million on May 3, 2024[14] - Short-term restricted investments increased to $368 million in 2025 from $264 million in 2024, while long-term restricted investments decreased slightly to $300 million from $306 million[31] Cash Flow and Dividends - Net cash provided by operating activities for the three months ended May 2, 2025, was $3,379 million, down from $4,262 million for the same period in 2024[17] - The company declared cash dividends of $1.15 per share, totaling $645 million for the three months ended May 2, 2025[15] - The company declared cash dividends of $645 million, compared to $629 million in the same period last year[50] Deferred Revenue - Total deferred revenue for the company is $1,500 million in 2025, up from $1,409 million in 2024[26] - Retail deferred revenue reached $1,001 million in 2025, an increase from $889 million in 2024, while stored-value cards deferred revenue decreased to $499 million from $520 million[26] - Lowe's protection plans deferred revenue recognized into sales was $143 million for the three months ended May 2, 2025, compared to $139 million for the same period in 2024[28] Share Repurchase - Total shares repurchased for the three months ended May 2, 2025, amounted to 0.3 million shares at a cost of $72 million, compared to 3.0 million shares at a cost of $743 million in the same period of 2024[47] - The company has $10.8 billion remaining in its share repurchase program as of May 2, 2025[45] Market Risks - The company remains exposed to market risks, including changes in interest rates and commodity prices, which have not changed materially from previous disclosures[92]

Core Viewpoint - Home Depot has demonstrated exceptional long-term performance, but current market conditions may pose challenges for future growth [2][8]. Company Overview - Home Depot has generated a total return of 3,157,000% since its IPO in September 1981, translating a $1,000 investment into nearly $32 million today [2]. - The company has a market capitalization of $365 billion and reported revenue of $163 billion in the past 12 months, significantly outperforming its key rival, Lowe's [5]. - Home Depot operates 2,350 stores, with a presence in Canada and Mexico, and is accessible to 90% of the U.S. population within 10 miles [6]. Financial Performance - The company has maintained an average operating margin of 14.2% over the past decade, allowing for substantial capital returns to shareholders, including $2.3 billion in dividends in the latest fiscal quarter [7]. - However, same-store sales declined by 0.3% in Q1, following declines in fiscal 2023 and fiscal 2024, indicating current challenges in demand [9]. Market Conditions - The macroeconomic environment, characterized by high mortgage rates and consumer uncertainty, is impacting demand for big-ticket purchases [8]. - Despite near-term struggles, there are long-term tailwinds, such as an aging housing stock and a housing inventory shortage, which may drive spending on renovations [9]. Valuation Perspective - Home Depot's stock trades at a price-to-earnings ratio of 24.9, which is considered expensive, suggesting that it may not be an opportune time for investors to buy [10].