Financial Data and Key Metrics Changes - The company reported sales of $24 billion for the quarter, with comparable sales increasing by 1.1% [6][24] - Adjusted diluted earnings per share reached $4.33, marking a 5.6% increase compared to the previous year [6][23] - Adjusted gross margin improved to 33.8%, up 37 basis points from last year [25] - Inventory at the end of Q2 was $16.3 billion, down $499 million year-over-year [26] Business Line Data and Key Metrics Changes - Positive comparable sales were delivered in nine of the fourteen merchandise divisions, with notable growth in pro and online sales [11][12] - The lawn and garden category saw strong performance, driven by live goods and seasonal offers [12] - Building products, including plumbing repair and drywall, also experienced positive comps, reflecting ongoing momentum in repair and maintenance projects [13] Market Data and Key Metrics Changes - The macro environment remains supportive for homeowners, with strong balance sheets, wage growth, and low unemployment [9] - Analysts estimate approximately $50 billion in deferred project demand due to delayed discretionary projects over the past few years [9] - The need for an estimated 18 million new homes by 2033 indicates a healthy pipeline for home improvement and new construction [10] Company Strategy and Development Direction - The acquisition of Foundation Building Materials (FBM) is seen as a transformational move to enhance the company's pro offerings and capture a larger share of the $250 billion total addressable market [5][39] - The company aims to integrate FBM's capabilities to improve job site delivery and expand product offerings for pro customers [37][39] - The strategy focuses on leveraging acquisitions to strengthen the pro distribution platform and enhance overall growth potential [38][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the home improvement industry, driven by aging housing stock and pent-up demand [9][10] - The company anticipates a flat home improvement market for the remainder of the year, with expectations for gradual improvements in underlying business performance [28][72] - Management highlighted the importance of continuous improvement initiatives to navigate the uncertain environment and deliver value to customers [27][60] Other Important Information - The company generated $3.7 billion in free cash flow during the quarter and paid $645 million in dividends [27] - The acquisition of ADG was completed in June, and it is expected to complement the FBM acquisition by offering a comprehensive interior solutions platform [10][41] Q&A Session Summary Question: Can you expand on Foundation's year-to-date performance in 2025? - Management refrained from providing specific details until after the transaction closes but expressed excitement about FBM's historical performance [46] Question: What percentage of the 33,000 SKUs will be net new to Lowe's? - Management indicated it is too early to provide specifics but sees significant opportunities for complementary products [47] Question: Can you elaborate on the pro sentiment survey results? - Pros reported stable backlogs and confidence in job prospects, although labor costs are rising [58][60] Question: What is the customer makeup of FBM? - FBM serves about 40,000 customers with a balanced mix of 45% residential and 55% commercial, minimizing concentration risk [68] Question: How does the company plan to leverage the acquisitions? - The combination of FBM and ADG is expected to create differentiation and allow the company to capture a larger share of the pro market [95]