Financial Data and Key Metrics Changes - In Q2 2025, the company reported sales of $24 billion, with comparable sales increasing by 1.1% [7][26] - Adjusted diluted earnings per share reached $4.33, marking a 5.6% increase compared to the previous year [7][25] - Adjusted gross margin improved to 33.8%, up 37 basis points from the prior year [26] - Inventory at the end of Q2 was $16.3 billion, down $499 million year-over-year [27] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in nine out of fourteen merchandise divisions, particularly in pro and online segments [12] - Strong performance was noted in seasonal categories, especially in lawn and garden, tools, and building products [12][14] - The flooring category showed strength across carpet, tile, and adhesives, with the introduction of Dal Tile expected to enhance offerings [65] Market Data and Key Metrics Changes - The macro environment remains supportive for homeowners, with strong balance sheets and low unemployment contributing to a positive outlook for the home improvement industry [10] - Analysts estimate approximately $50 billion in deferred project demand due to delayed discretionary projects over recent years [10] - The need for an estimated 18 million new homes by 2033 indicates a healthy pipeline for home improvement and new construction [11] 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 diversify revenue streams [5][6] - The company aims to leverage FBM's capabilities to serve larger professional customers within a $250 billion total addressable market [5][42] - The strategy focuses on integrating acquisitions to create a comprehensive interior solutions platform for large pro customers [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the uncertain environment while providing value to customers [28] - The outlook for the home improvement market remains flat, with expectations for gradual improvements in the underlying business [29][77] - Management highlighted the importance of continuous improvement initiatives and the positive sentiment among professional customers regarding their job prospects [21][64] Other Important Information - The company generated $3.7 billion in free cash flow during Q2, with $1.3 billion allocated for the acquisition of ADG [28] - The acquisition of FBM is expected to close in 2025, with a purchase price of $8.8 billion [44] - The company plans to maintain its investment-grade credit ratings while focusing on growth and shareholder returns [45] 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 [50] Question: What percentage of the 33,000 SKUs will be net new to Lowe's offering? - Management indicated it is too early to provide specifics but sees significant opportunities for complementary products [51] Question: Can you provide insights from the pro sentiment survey? - Pros reported stable backlogs and confidence in job prospects, although labor costs are rising [63][64] Question: What is happening in the flooring category? - Strength was noted in both DIY and pro segments, with the introduction of Dal Tile expected to enhance offerings [65] Question: Can you provide customer numbers or makeup for FBM? - FBM has about 40,000 customers, with a balanced mix of residential and commercial clients [72] Question: How much of the guidance for the back half is due to pricing? - Management indicated that pricing strategies are dynamic and will continue to be competitive [78] Question: Is there a secondary investment cycle emerging in the core Lowe's supply chain? - Management acknowledged the need for continuous investment in the platform but does not foresee another large acquisition soon [86]

Core Viewpoint - American Securities LLC and CD&R have entered into a definitive agreement to sell Foundation Building Materials, Inc. (FBM) to Lowe's Companies, Inc. for $8.8 billion [1] Company Overview - FBM is a leading North American distributor of interior building products, including drywall, metal framing, ceiling systems, commercial doors and hardware, insulation, and complementary products, serving large residential and commercial professionals [2] - Founded in 2011 and headquartered in Santa Ana, California, FBM operates over 370 locations across the U.S. and Canada, catering to 40,000 professional customers [5] Financial Performance - Under the ownership of American Securities and CD&R, FBM has achieved 27% annual revenue growth and 31% annual EBITDA growth [3] - The growth has been driven by both organic expansion and strategic acquisitions, including the purchase of Beacon Roofing Supply's interior products business and others [3] Strategic Initiatives - FBM has launched a new e-commerce platform and digital application to enhance customer service and has invested in expanding its commercial capabilities [3] - The company has focused on strengthening its capabilities and enhancing its customer value proposition through organic growth initiatives and strategic acquisitions [4][3] Transaction Details - The transaction is expected to close in the fourth quarter of 2025, pending customary closing conditions and regulatory approvals [4]

--Enhances offering for Pro customers—--Increases Pro Penetration1----Positions Company for Long-Term Sustainable Sales Growth and Profit Expansion--MOORESVILLE, N.C., Aug. 20, 2025 /PRNewswire/ -- Lowe's Companies, Inc. ("Lowe's" or the "Company") (NYSE: LOW) today announced it has entered into a definitive agreement (the "Agreement") to acquire Foundation Building Materials ("FBM") for approximately $8.8 billion.FBM is a leading North American distributor of interior building products, including drywall, ...

Core Viewpoint - Bank of America Securities analyst Robert F. Ohmes maintains a Buy rating on Home Depot with a price target of $450, highlighting the strategic acquisition of GMS Inc for approximately $4.3 billion [1][2]. Group 1: Acquisition Details - Home Depot plans for SRS Distribution to acquire GMS Inc at $110 per share, totaling around $4.3 billion, with an implied enterprise value of approximately $5.5 billion [1][2]. - GMS reported 2024 sales of $5.5 billion and adjusted EBITDA of $615 million, with the transaction expected to close by the end of 2025 [2]. - The acquisition is anticipated to close ahead of schedule, similar to Home Depot's previous acquisition of SRS, which closed in 82 days [2][3]. Group 2: Strategic Fit and Growth Potential - The acquisition of GMS introduces a new vertical in wallboard, ceilings, and steel framing, complementing SRS's existing business in roofing, landscaping, and pools [3]. - GMS is expected to grow both organically and through targeted acquisitions under Home Depot's ownership, with the transaction projected to be accretive to adjusted EPS in the first year post-close [4]. Group 3: Financial Implications and Market Position - Home Depot will finance the acquisition through cash on hand and debt, aiming to return to a 2.0x leverage ratio by the end of fiscal 2026, after which share repurchases are expected to resume [5]. - Despite a challenging macroeconomic environment, Home Depot is expected to continue gaining market share as it enhances its capabilities in serving complex projects [6].

Core Insights - Home Depot has announced that SRS Distribution is acquiring GMS, a specialty building products distributor, to enhance its professional contractor customer base [2][4]. Group 1: Acquisition Details - SRS Distribution, which was acquired by Home Depot for $18.2 billion in March 2024, is now acquiring GMS to expand its service offerings [6]. - The merger of GMS and SRS will create a network of over 1,200 locations and a fleet of more than 8,000 trucks, enabling tens of thousands of jobsite deliveries daily [3]. Group 2: Strategic Importance - The acquisition is aimed at broadening SRS's distribution footprint across the U.S. and Canada, enhancing its capabilities and customer relationships [4]. - Home Depot's strategy to grow its Pro customer segment is crucial, as these customers have historically driven sales even during downturns in consumer spending [4]. Group 3: Pro-Focused Strategy - Home Depot is investing in improving the shopping experience for Pro customers through digital upgrades, job site deliveries, bulk pricing, and personalized accounts [5]. - Trade finance initiatives are part of Home Depot's Pro offerings, addressing the financial challenges faced by contractors [6].