Financial Data and Key Metrics Changes - Third quarter sales reached $20.8 billion, with comparable sales increasing by 0.4% year-over-year, despite a 100 basis point headwind from hurricanes [5][32] - Adjusted diluted earnings per share were $3.06, reflecting a 6% increase compared to the previous year [5][31] - Adjusted operating margin expanded by approximately 10 basis points, resulting in an adjusted operating margin rate of 12.4% [5][33] - Gross margin improved to 34.2%, up 50 basis points from the prior year [33] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in 10 of 14 merchandise divisions, with notable strength in home decor, appliances, flooring, and paint [17][32] - Online sales grew by 11.4% during the quarter, driven by increased traffic and strong conversion rates [7] - Home services experienced double-digit growth, contributing to the overall positive performance [27] Market Data and Key Metrics Changes - The U.S. homeowner market remains healthy, with strong balance sheets and continued consumer spending, although affordability issues persist [14][15] - Home equity levels are high, averaging around $400,000, which may encourage homeowners to invest in their existing properties rather than moving [15][16] Company Strategy and Development Direction - The company is focused on its 2025 Total Home Strategy, which includes enhancing pro offerings, accelerating online sales, and leveraging loyalty programs [6][8] - The acquisition of Foundation Building Materials (FBM) aims to expand product offerings and enhance fulfillment capabilities, particularly in urban markets [12][13] - Investments in AI are expected to improve customer engagement and operational efficiency, with virtual assistants driving sales and customer satisfaction [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, noting that lower interest rates could spur demand in the home improvement sector [15][16] - The company anticipates flat comparable sales for the year, with expectations of approximately $86 billion in total sales, including FBM [37] - Management highlighted the importance of operational discipline and strategic investments in positioning the company for long-term growth [38] Other Important Information - The company is on track to achieve a multi-year goal of reducing in-store SKU count by 15% by the end of 2025 [24] - The marketplace initiative is showing early promise, exceeding expectations in seller onboarding and customer adoption [78][80] Q&A Session Summary Question: How is the company thinking about the trend in the business in light of recent performance? - Management noted positive comp performance to start the quarter and improvements in top-line results since exiting October, indicating that key elements of the Total Home Strategy are working [41][42] Question: What has changed in the kitchen and bath category? - Management believes the company is taking market share in this space, supported by improved technology and a better go-to-market strategy [48][49] Question: Can you elaborate on the improving pro survey sentiment? - Management reported that 75% of small to medium pros feel confident in their job prospects, with ongoing investments in loyalty programs and fulfillment driving growth [55][57] Question: What is the company's strategy for the medium to larger pro market? - The strategy focuses on leveraging the MyLowe's Pro Rewards platform and enhancing product offerings to capture market share in the small to medium pro segment [70][71] Question: What is the initial performance of the marketplace? - Management expressed excitement about the marketplace launch, noting it is exceeding expectations in financial performance and seller quality [77][78]

Financial Data and Key Metrics Changes - Third quarter sales reached $20.8 billion, with comparable sales increasing by 0.4% year over year, despite a 100 basis point headwind from Hurricanes Helene and Milton [4][29] - Adjusted diluted earnings per share were $3.06, reflecting a 6% increase compared to the previous year [4][28] - Gross margin improved to 34.2%, up 50 basis points from the prior year [30] - Adjusted operating margin rate was 12.4%, an increase of 10 basis points year over year [30] - Inventory at the end of Q3 was $17.2 billion, down approximately $400 million compared to the previous year [30] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in 10 of 14 merchandise divisions, with notable strength in appliances, flooring, paint, and kitchens and bath [15][29] - Online sales grew by 11.4% during the quarter, driven by increased traffic and strong conversion rates [5] - Home services experienced double-digit comparable sales growth, indicating strong performance in this key initiative [24] Market Data and Key Metrics Changes - The U.S. homeowner market remains healthy, with strong balance sheets and continued consumer spending, although affordability and economic uncertainty weigh on consumer confidence [12][13] - The average homeowner has record levels of equity, approximately $400,000, which may lead to increased investment in home improvement projects [13] Company Strategy and Development Direction - The company is focused on its 2025 Total Home Strategy, which includes enhancing pro offerings, accelerating online sales, and leveraging loyalty programs [5][6] - The acquisition of Foundation Building Materials (FBM) aims to expand product offerings and enhance fulfillment capabilities, particularly in urban markets [11][12] - Investments in AI are expected to improve customer engagement and operational efficiency, with virtual assistants significantly increasing conversion rates [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the long-term health of the home improvement sector, despite current macroeconomic uncertainties [14] - The company anticipates that lower interest rates could stimulate demand for home improvement projects, particularly through home equity loans [13][64] - The outlook for 2026 remains cautious, with expectations for flat comparable sales for the year [33] Other Important Information - The company is on track to achieve its multi-year goal of reducing in-store SKU count by 15% by the end of 2025 [21] - The marketplace initiative is showing early promise, exceeding expectations in seller onboarding and customer adoption [72][73] Q&A Session Summary Question: How is the business trend looking in light of recent performance? - Management noted positive comp performance to start the quarter, with improvements in top-line performance since exiting October [37][39] Question: What is the outlook for kitchen and bath categories? - Management believes Lowe's is gaining market share in kitchen and bath, supported by improved technology and product offerings [45][46] Question: Can you elaborate on the improving sentiment among pros? - The small to medium pro business remains stable, with 75% of pros feeling confident in their job prospects [52] Question: How does the company view the current housing market? - Management acknowledged elevated mortgage rates but highlighted the strong equity position of homeowners as a potential driver for future home improvement spending [62][64] Question: What are the early margin scenarios for FBM and ADG? - Initial estimates suggest a 50 basis point impact on margins in 2026, with a focus on gross margin improvements [56]

Group 1: Nvidia's Earnings and Market Impact - Nvidia's Q3 results are anticipated to significantly influence the AI stock market, with a potential $320 billion swing in market value expected from the earnings report, marking the largest post-earnings move ever for the company [2][3][4] - Nvidia's market capitalization briefly surpassed $5 trillion last month, but its share price has since declined by 12% [2] - The company has $500 billion in booked business, indicating a projected growth of nearly 20% in data center revenues each quarter until the end of 2026, which is not reflected in current consensus expectations [5][6] Group 2: Consumer Trends and Retail Performance - Target has lowered its earnings guidance, citing an affordability crisis and predicting a weak holiday season, leading to a decline of over 2.5% in its shares [11][12] - In contrast, Lowe's reported quarterly sales that exceeded expectations, resulting in a 5% increase in its shares, although it also reduced its full-year profit forecast due to a challenging economic environment [12] Group 3: Advertising Industry Insights - Critio's CEO highlighted the transformative impact of AI on advertising workflows, emphasizing efficiency in content creation, audience targeting, and campaign management [19][20] - Critio has a substantial commerce dataset, with 4.5 billion SKUs and over a trillion dollars in annual transactions, positioning it well for future growth in the agentic commerce space [23][29] - The company aims to enhance its product offerings through AI, focusing on internal efficiency and supporting retailers in adapting to new commerce trends [24][32] Group 4: Market Trends and Stock Performance - Nvidia's stock is experiencing fluctuations in pre-market trading, with TSMC recovering from earlier losses while AMD is slightly down as investors assess its share of the AI chip market [37] - Cloudflare's shares are rising despite a recent outage, indicating investor confidence in long-term demand for web infrastructure and security services [38] - Xiaomi's shares have fallen to a seven-month low due to rising supply chain costs, although its EV arm has posted an operating profit for the first time [40]

Financial Data and Key Metrics Changes - For fiscal year 2025, Griffon Corporation reported HBP revenue of $1.6 billion, consistent with the prior year, and an EBITDA margin of 31.2% [3] - Fourth quarter revenue was $662 million, with adjusted EBITDA of $138 million, both consistent with the prior year [9] - Fourth quarter GAAP net income was $44.95 million, compared to $62 million in the prior year, while adjusted net income was $71 million, or $1.54 per share, compared to $71 million, or $1.47 per share, in the prior year [10] Business Line Data and Key Metrics Changes - HBP segment revenue increased by 3% year-over-year, driven by a favorable price index, while volume remained consistent [11] - CPP segment revenue decreased by 10% to $936 million due to weak consumer demand in North America and the U.K., but profitability improved with an 18% increase in EBITDA [4][6] - CPP adjusted EBITDA was $24 million, a decrease of 1% from the prior year, primarily due to decreased volume offset by global sourcing benefits [12] Market Data and Key Metrics Changes - The U.S. and U.K. markets experienced reduced consumer demand, impacting CPP revenue, while Australia showed increased organic volume [5][11] - The company noted that 85% of its business is unaffected by tariffs, indicating resilience in its operations despite external pressures [31] Company Strategy and Development Direction - The company plans to leverage improving market conditions and a pipeline of product innovations to increase long-term volume and profit margins [17] - Capital allocation strategies include share repurchases, debt reduction, and dividend increases, reflecting confidence in the business's strength [8][17] - The company aims to maintain EBITDA margins above 30% for HBP and approximately 10% for CPP in fiscal 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong financial performance despite a challenging macroeconomic environment [16] - The outlook for fiscal 2026 includes expectations for revenue consistency with 2025 at $2.5 billion and adjusted EBITDA in the range of $580 million to $600 million [14][15] - Management anticipates a gradual recovery in consumer demand and housing market conditions, which could enhance future performance [16][39] Other Important Information - The company repurchased 1.9 million shares at an average price of $70.99, totaling $135 million for the year [14] - A quarterly dividend of $0.22 per share was announced, marking a 22% increase over the prior quarter [8] Q&A Session Summary Question: Can you discuss the drivers of the sequential EBITDA margin decline in HBP? - Management indicated that the margin decline was due to product mix variations and expected favorable price trends moving forward [20][21] Question: What is the outlook for CPP in terms of pricing and consumer acceptance? - Management noted that while pricing has been passed through, consumer acceptance remains weak, and they expect 2026 to mirror 2025 [39] Question: How do you see the competitive landscape in the garage door market? - Management highlighted their strong market position and innovation capabilities, indicating confidence in future growth despite current market challenges [37][38] Question: What is the status of retailer inventories in the CPP category? - Management stated that excess inventory levels are present due to weak consumer demand, with no immediate repurchasing expected [44] Question: How does the company reconcile the increase in dividends with share repurchase activity? - Management clarified that there is no conflict, as they intend to continue share repurchases while also increasing dividends and reducing debt [46]

Financial Data and Key Metrics Changes - For fiscal year 2025, Griffon Corporation reported HBP revenue of $1.6 billion, consistent with the prior year, and an EBITDA margin of 31.2% [3] - Fourth quarter revenue was $662 million, with adjusted EBITDA of $138 million, both consistent with the prior year [9] - Gross profit on a GAAP basis for the fourth quarter was $276 million, compared to $263 million in the prior year quarter, with normalized gross margin increasing by 60 basis points to 41.7% [9][10] - Fourth quarter GAAP net income was $44.95 million, or $1.54 per share, compared to $62 million, or $1.29 per share in the prior year [10] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased by 3% over the prior year quarter, driven by a favorable price index, while volume remained consistent [11] - Consumer and Professional Products (CPP) revenue decreased by 4% from the prior year quarter, primarily due to an 8% decrease in volume, partially offset by a 4% benefit from price index [11] - CPP adjusted EBITDA of $24 million decreased by 1% from the prior year period, primarily due to decreased volume, offset by benefits from global sourcing initiatives [12] Market Data and Key Metrics Changes - The U.S. and U.K. markets experienced persistently weak consumer demand, impacting CPP revenue, while Australia showed increased organic volume [5][12] - The company noted that 85% of its business is unaffected by tariffs, indicating a strong position despite external pressures [29] Company Strategy and Development Direction - The company plans to leverage improving market conditions and a pipeline of product innovations to increase long-term volume and profit margins [15] - Capital allocation strategy includes share repurchases, debt reduction, and dividend increases, reflecting confidence in the business outlook [8][16] - The company aims to generate over $1 billion of free cash flow over the next three years to support its strategic initiatives [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong financial performance despite challenging macroeconomic conditions [15] - The outlook for fiscal 2026 includes expectations for revenue to be consistent with 2025 at $2.5 billion and adjusted EBITDA in the range of $580 million to $600 million [13][14] - Management anticipates a gradual recovery in consumer demand and housing market conditions, which could enhance performance in the coming years [15][39] Other Important Information - The company repurchased 1.9 million shares at an average price of $70.99 during fiscal 2025, totaling $135 million [6][13] - A quarterly dividend of $0.22 per share was announced, marking a 22% increase over the prior quarter [7][8] Q&A Session Summary Question: What were the drivers of the sequential EBITDA margin decline in HBP? - Management indicated that the margin decline was due to product mix variations and expected favorable price index trends moving forward [19] Question: How does the guidance weight toward the back half of the year? - Management expects a slight decrease in the first half of the year, with a pickup in the second half, consistent with normal seasonality [22] Question: What was better than expected in the CPP segment? - Favorable price index and slightly better volume than anticipated contributed to better performance in the CPP segment [26] Question: What are the specific drivers for EBITDA growth in CPP despite flat sales? - Management highlighted the benefits of global sourcing and cost management as key drivers for EBITDA growth [28] Question: How does the company view competitive changes in the market? - Management noted that despite macroeconomic challenges, the company has maintained strong performance and market share, particularly in the garage door segment [36] Question: What is the status of retailer inventories in the CPP category? - Management indicated that weak consumer demand has led to higher inventory levels, with no immediate repurchasing expected [42] Question: How does the company reconcile the increase in dividends with share repurchases? - Management clarified that there is no conflict, as the company intends to continue share repurchases, debt reduction, and dividend increases simultaneously [44]

Market Overview - Wall Street has experienced volatility recently, with stocks attempting to stabilize. Gold and silver prices are rising, while crude oil is declining. Treasuries and the dollar remain mostly flat [1]. Nvidia Corp. (NVDA) - Nvidia is set to report its quarterly results, with analysts expecting earnings per share of $1.25 and revenue of approximately $55 billion for Q3. The performance of Nvidia is critical as it may influence the broader AI stock market, which has faced significant declines recently [2]. Employment Data - The September jobs report is scheduled for release, with expectations of a job gain of about 50,000. This report was delayed due to the government shutdown, leaving investors and policymakers with limited information [3]. Lowe's Cos. (LOW) - Lowe's reported better-than-expected earnings per share, exceeding estimates by six cents. The company highlighted strong digital and contractor sales. Recently, Lowe's acquired Foundation Building Materials for $8.8 billion to enhance sales to contractors [5]. Target Corp. (TGT) - Target reported disappointing results, with same-store sales declining more than anticipated. The company has reduced its full-year earnings per share forecast and plans to invest $5 billion in store remodels and increasing shelf space for lower-priced seasonal items to regain momentum [6]. Adobe Inc. (ADBE) - Adobe is reportedly acquiring Semrush Holdings for $1.9 billion, translating to $12 per share, which is a significant premium over Semrush's previous closing price of $6.76. This acquisition aims to enhance Adobe's product offerings in online advertising and social media research [6].

Financial Performance - The company delivered positive comp sales growth[3] - Gross margin was 34.2%, a +50 basis points increase compared to the prior year[3] - Operating margin was 11.9%, a -65 basis points decrease compared to the prior year[3] - Adjusted operating margin was 12.4%, a +10 basis points increase compared to the prior year[3] - Diluted EPS was $2.88, a -3.7% decrease compared to the prior year[3] - Adjusted diluted EPS was $3.06, a +5.9% increase compared to the prior year[3] - The company returned $673 million to shareholders through dividends[3] Sales Trends - Overall comp sales increased by +0.4%[3] - Comp transactions increased by +2.5%[5] - Comp average ticket decreased by -2.6% to $106.26[5] - Online sales growth decreased by -3.0%[5] Strategic Initiatives - The company closed on the acquisition of Foundation Building Materials[1,6]

Market Overview - The market is anticipating significant movement due to Nvidia's upcoming earnings announcement, with expectations of a 7% potential move either up or down [1][2] - Historical reactions to Nvidia's earnings have been mixed, with implied volatility decreasing but stock prices pulling back slightly [2][3] - The S&P 500 may be influenced by Nvidia's performance, although recent trading sessions have shown limited reaction to earnings announcements [3][4] Nvidia Insights - Key focus will be on Nvidia's data center numbers, especially after a previous miss in this area, which was attributed to supply chain bottlenecks [4][5] - If Nvidia faces similar issues this time, it could negatively impact the stock more significantly than before [5] Sector Sentiment - The market appears to be adopting a more defensive stance, as indicated by the performance of equal-weighted indices [6][7] - A rotation in market sectors is observed, with both defensive and risk-on sectors not being sold off entirely, which may provide a foundation for the S&P 500 [7][8] Economic Indicators - Credit default swaps for companies like Oracle are rising, indicating elevated equity volatility in the market [9] - Upcoming expirations of VIX options may reduce market volatility temporarily [10] Federal Reserve Nomination - The shortlist for the next Fed chair includes Kevin Hasset and Kevin Walsh, with Rick Reer still in contention [12][13] - The market is looking for a nominee who will maintain a balanced approach to rate cuts, avoiding aggressive policies [14][16] Constellation Energy Update - Constellation Energy shares are rising following the approval of a $1 billion loan to restart the Three Mile Island unit, which was shut down in 2019 [19][20] - The loan aims to revamp the facility to meet U.S. standards for power production, benefiting the utility sector [20][21] Lowe's Performance - Lowe's reported revenue of $20.81 billion, slightly above expectations, and adjusted earnings per share of $3.36, compared to the anticipated $2.97 [23][24] - The company lowered its profit guidance but increased revenue outlook, reflecting a cautious sentiment in the housing market due to higher interest rates [25][26][27]

Group 1: Market Performance - The US equity market continued its rally in Q3, with the S&P 500 returning 8.1% and the Russell 1000 Value surging 5.3% [1] - The SCCM Value Equity Strategy returned 6.9% (gross) and 6.8% (net) in Q3, outperforming the Russell 1000 Value's 5.3% return but underperforming the S&P 500's 8.1% return [1] - Year-to-date, the strategy returned 13.0% (gross), compared to the Russell 1000 Value's +11.7% and the S&P 500's +14.8% [1] Group 2: Lowe's Companies, Inc. Performance - Lowe's Companies, Inc. (NYSE:LOW) experienced a one-month return of -9.84% and a 52-week loss of 16.52% [2] - As of November 18, 2025, Lowe's stock closed at $219.57 per share, with a market capitalization of $123.14 billion [2] - The company reported strong Q2 earnings with comparable sales up 1.1%, its best result since 2022, driven by growth in both Pro and DIY segments [3] Group 3: Strategic Developments - Lowe's gross margins expanded by approximately 40 basis points due to improved product mix and cost control, with July comparable sales rising by 4.7% [3] - The company announced an $8.8 billion acquisition of Foundation Building Materials, which broadens its Pro customer base and supports its Total Home strategy [3] - Despite its potential, Lowe's is not among the 30 most popular stocks among hedge funds, with 75 hedge fund portfolios holding its stock at the end of Q2, up from 68 in the previous quarter [4]

Core Insights - The home improvement sector is facing challenges due to a weak housing market and economic uncertainty, impacting major players like Home Depot and Lowe's [1][6]. Home Depot - Home Depot's Q3 net sales increased by 2.8% year over year to $41.4 billion, but this figure includes $900 million from the acquisition of GMS Inc. Without this, total sales were essentially flat compared to the previous year [2]. - Comparable sales growth was 0.2%, with a slight 0.1% growth in the U.S. Gross margin remained flat at 33.4% [3]. - Operating income fell by 1.2% year over year to $5.4 billion, and net income declined by 1.3% to $3.6 billion [3]. - CEO Ted Decker noted that while underlying demand remained stable, an anticipated increase in demand did not occur, attributing this to consumer uncertainty and housing market pressures [4]. Lowe's - Lowe's reported a 3% year-over-year increase in total sales to $20.8 billion, with comparable sales growing by 0.4%, driven by strong pro sales and an 11.4% increase in online sales [5]. - The retailer experienced positive comparable sales in 10 out of 14 product categories, including appliances and flooring [5]. - Similar to Home Depot, Lowe's saw a decline in profits, with operating income falling over 2% to $2.5 billion and net income decreasing by 4.7% to $1.6 billion [6]. Market Trends - Big-ticket purchases at Home Depot grew by 2.3%, but there is a noted decline in engagement for larger discretionary projects, which are typically financed by customers [7]. - Both Home Depot and Lowe's have updated their full-year outlooks, including lowering profit forecasts due to ongoing market uncertainties [7].