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]

Core Insights - Lowe's is strategically investing in digital and in-store offerings to enhance value and convenience for Pro customers, driving growth amid a challenging macroeconomic landscape [1] - The company reported high single-digit growth in the Pro segment and a 9.5% increase in online sales during the fourth quarter, with a 0.2% rise in comparable store sales, marking the first positive increase in two years [2] Pro Customer Momentum and Loyalty Programs - Lowe's is gaining momentum with Pro customers and has updated its MVPs Pro Rewards & Partnership Program to MyLowe's Pro Rewards, allowing members to earn points on purchases redeemable for rewards [3] - The DIY loyalty program has 30 million members, with members outspending non-members by 50% [4] Driving Growth Through Productivity Improvement - Lowe's future growth strategy includes Perpetual Productivity Improvement (PPI) initiatives, which now extend to supply chain, merchandising, HR, IT, and online operations, focusing on store front-end transformation [5] Targeting Millennials and Strengthening Digital Experience - Millennials are leading in home improvement retail, with 25% having purchased building materials or tools in the past 30 days, compared to 19% of consumers overall [7] - Lowe's launched a Digital Home Platform for MyLowe's Rewards members, providing personalized home maintenance management and product recommendations [8] Looking Ahead - The company is prepared to outperform the market in various macro scenarios, leveraging data from loyalty programs to drive engagement and offering exclusive deals [10] - The normalization of the home improvement market remains uncertain, with a focus on tracking discretionary big-ticket items for DIY and the home installation business [11]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported sales of $18.6 billion with positive comparable sales growth of 0.2% [6][55] - For the full fiscal year 2024, total sales reached $83.7 billion, with an adjusted operating margin of 12.3% and adjusted earnings per share of $11.99 [6][55] - The gross margin for Q4 was 32.9%, an increase of 46 basis points year-over-year, driven by productivity initiatives [57] - Adjusted SG&A expenses were 21% of sales, reflecting an 8 basis point deleverage compared to the previous year [57] - The company generated $7.7 billion in free cash flow and returned $6.5 billion to shareholders through share repurchases and dividends in 2024 [58] Business Line Data and Key Metrics Changes - The pro segment experienced high single-digit comparable sales growth for the second consecutive quarter, driven by the TransformPro offering and improved service levels [8][22] - Online sales grew by 9.5% in Q4, with significant sales during Black Friday and Cyber Monday [9][10] - The DIY segment faced pressure, particularly in larger ticket discretionary spending, with comparable transactions declining by 1.3% [55][56] Market Data and Key Metrics Changes - The company noted a cautious consumer environment impacting DIY discretionary spending, especially for larger projects [7][13] - The macro environment remains challenging, with high mortgage rates leading to a lock-in effect and the lowest pace of existing home sales in nearly 30 years [13][14] - Despite these challenges, key drivers such as home price appreciation and disposable income growth are expected to sustain long-term demand [14][15] Company Strategy and Development Direction - The company is focused on a total home strategy, which includes driving pro penetration, accelerating online sales, and expanding home services [16][17] - Investments are being made in technology-driven productivity projects and key growth initiatives, with a disciplined focus on productivity [59][63] - The company plans to open five to ten new stores in 2025 as part of its growth strategy [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the medium to long-term outlook despite near-term market uncertainties [14][62] - The company anticipates a flat home improvement market in 2025, with pro outpacing DIY due to repair and maintenance needs [62][63] - Management highlighted the importance of agility and strategic planning to outperform the market under various economic scenarios [17][90] Other Important Information - The company awarded $80 million in discretionary bonuses to frontline associates, reflecting appreciation for their commitment [20][51] - Lowe's donated $2 million for relief efforts in communities affected by wildfires in Southern California [19][38] Q&A Session Summary Question: Discussion on Q4 strength and context - Management acknowledged the challenging macro backdrop but expressed satisfaction with execution and positive comps despite market difficulties [72][74] Question: Gross margin expectations and vendor clawbacks - Management indicated that gross margin is expected to remain flat for the year, with PPI initiatives offsetting pressures from investments [78][80] Question: Sales guidance and market share - Management confirmed that the sales guidance remains consistent with previous expectations, factoring in weather impacts and market conditions [88][90] Question: Hurricane rebuild outlook - Management adopted a conservative approach regarding the financial benefits from hurricane rebuilds, considering timing of insurance proceeds [100] Question: Pro segment engagement and performance - Management reported positive growth across pro-centric categories, driven by improved service levels and inventory availability [107] Question: Transaction versus ticket growth expectations - Management expects slight ticket growth driven by pro strength, while DIY traffic pressures are anticipated to persist [113][115] Question: Large ticket remodeling categories performance - Management acknowledged that DIY discretionary big ticket categories are under pressure, impacting overall revenue [130][132] Question: Incremental activity to drive DIY business - Management stated there are no plans for significant changes in promotional cadence for DIY, focusing instead on leveraging the DIY loyalty program [135][137]