Key Takeaways HD and LOW are both scaling AI, but with contrasting strategies shaping the future of home improvement retail.HD uses AI to improve fulfillment, digital aid and Pro tools like Blueprint Takeoffs in its store network.LOW builds an AI-first engine, leveraging MyLowe to guide clients, empower associates and boost operations.In the rapidly evolving world of retail, the two dominant players in U.S. home improvement, The Home Depot, Inc. (HD) and Lowe’s Companies, Inc. (LOW) , are both investing hea ...

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]