The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

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WMA 2024-Lowe's

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WMAC 2023-Lowes

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-039-Lowes

The home improvement retailer reported revenue of $97.1 billion in fiscal 2022, a roughly 1% increase from the prior year, as the COVID-era boom in home repairs eased. 
<ul> 
 	<li>Overall transactions at the company declined 7.4% in 2022 compared with the year prior, another sign of the slowdown in home improvement projects.</li> 
 	<li>In July 2022 Lowe’s adopted a four-day workweek for full-time store staff. Frontline employees had complained for years that Lowe’s old scheduling system was unpredictable and afforded few consecutive days off.</li> 
 	<li>In February 2023 Lowe’s completed the sale of its 450-store Canadian business to private equity firm Sycamore Partners for $400 million.</li> 
 	<li>Lowe’s is led by Marvin Ellison, one of only eight Black CEOs in the Fortune 500.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

WMAC-2022-44-Lowes

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Lowes

The big-box home-improvement retailer has enjoyed several strong years, as the pandemic and the rise of remote work encouraged many people to either update their existing homes or buy and fix up new ones. The company reported more than $96 billion in sales in 2021, a bump of 6.9% compared with 2020, and an impressive 33% leap from 2019, the last pre-pandemic year. A tight housing market and rising real estate values are expected to continue to fuel new home projects—good news for Lowe’s and its competitors.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

WMAC 2021-47-Lowe's

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500 80 Lowes

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Housebound Americans lavished billions on their homes last year at stores such as Lowe’s, setting up home offices and getting around to the small projects they suddenly had ample time for. Lowe’s sales rose 24.2% to just under $90 billion on that macro tailwind, narrowing its performance gap with rival Home Depot. The home improvement giant also helped itself with a vastly improved e-commerce site and savvy merchandising moves, such as stocking a wider assortment of holiday season goods like exercise bikes. While the home spending boom could ease this year, Lowe’s is redoubling its efforts to win more business from contractors who do larger projects.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Arial&quot;,&quot;16&quot;:11}">Housebound Americans lavished billions on their homes last year at stores such as Lowe’s, setting up home offices and getting around to the small projects they suddenly had ample time for. Lowe’s sales rose 24.2% to just under $90 billion on that macro tailwind, narrowing its performance gap with rival Home Depot. The home improvement giant also helped itself with a vastly improved e-commerce site and savvy merchandising moves, such as stocking a wider assortment of holiday season goods like exercise bikes. While the home spending boom could ease this year, Lowe’s is redoubling its efforts to win more business from contractors who do larger projects.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-31-Lowe's

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-137-Lowes

Lowe’s has played second fiddle to Home Depot for years now, lagging its bigger rival by sales growth and e-commerce prowess. But Lowe’s is making big strides with its store brands, and it has made major technical changes to rev up its e-commerce site. Additionally, the company's big appliance business is booming. The economic downturn is likely to cool a housing market that has allowed Lowe’s to thrive despite some weaknesses, which include meager online growth. But it seems, for now, Lowe’s has begun to address those competitive disadvantages.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-044-Lowes

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This year's Fortune 500 marks the 64th running of the list.

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The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

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The home improvement retailer Lowe’s was founded in 1921. The brand operates 1,750 home improvement stores and employs approximately 200,000 associates. Its big-box stores, website, and app complete some 16 million customer transactions a week in the United States. Lowe’s sells DIY products, decor, tools, and gardening supplies, as well as raw materials for builders and contractors. It also sells appliances and electrical items, and offers installation services through independent contractors. Founded as a general store, Lowe’s pivoted to focusing entirely on home improvement in the 1940s, ahead of the postwar building boom, and is now the world’s second-largest home improvement retailer. It became a publicly traded company in 1961.

Q2 2027

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Lowe's (LOW): Company Profile, Stock Price, News, Rankings

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Lowe's

lowe's

Good morning, everyone. Welcome to Loews Company's Fourth Quarter twenty twenty four Earnings Conference Call. My name is Rob, and I'll be your operator for today's call. As a reminder, this conference is being recorded. I'll now turn the call over to Kate Perlman, Vice President of Investor Relations and Treasurer.

Thank you, and good morning. Here with me today are Marvin Ellison, Chairman and Chief Executive Officer Bill Boltz, our Executive Vice President, Merchandising Joe McFarlane, our Executive Vice President, Stores and Brandon Sink, our Executive Vice President and Chief Financial Officer. I would like to remind you that our notice regarding forward looking statements is included in our press release this morning, which can be found on Loews' Investor Relations website. During this call, we will be making comments that are forward looking, including our expectations for fiscal twenty twenty five. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the Risk Factors, MD and A and other sections of our annual report on Form 10 K and our other SEC filings.

Additionally, we will be discussing certain non GAAP financial measures. A reconciliation of these items to U. S. GAAP can be found on the quarterly earnings section of our Investor Relations website. Now, I'll turn the call over to Marvin.

Thank you, Kate, and good morning, everyone, and thank you for joining us today. In the fourth quarter, we delivered sales of $18,600,000,000 and positive comparable sales of 0.2%. Looking at the full fiscal year 2024, we delivered sales of $83,700,000,000 adjusted operating margin of 12.3% and adjusted earnings per share of $11.99 We're very pleased with our performance in 2024 in a very difficult home improvement macro environment. And we're also pleased to deliver positive comparable sales this quarter with results that exceeded our expectations and were driven by continued momentum in pro and online, strong seasonal DIY performance and rebuilding efforts in the wake of recent hurricanes. Despite these better than expected fourth quarter results, we're still seeing a cautious consumer leading to continued near term pressure on DIY discretionary spending, particularly in bigger ticket projects.

And with this challenging backdrop, we remain focused on delivering strong operating performance, while continuing to make the right long term investments for growth. Turning to our Pro results in the fourth quarter, where we delivered high single digit comps for the second consecutive quarter. We're gaining momentum with our Pro customer through a flywheel effect that we've created with a transform Pro offering with the right brands and products, greater inventory depth, improved job site delivery, dedicated service levels and a best in class digital experience. Last week, we took the next steps in tailoring our offering for the small to medium Pro with the nationwide launch of our redesigned Pro loyalty program, Milo's Pro Rewards. Later in the call, Joe will share more detail about how we updated the program to drive greater engagement with our pros.

Shifting to online, we drove strong sales growth of 9.5% in Q4, reflected in broad based improvement across all merchandising divisions, which included record breaking sales during the Black Friday and Cyber Monday holiday. Through our new free DIY loyalty program, MyLowe's Rewards, we're generating excitement and driving more traffic to lowes.com. These results give us confidence that our online and omni channel investments are paying off. These investments include a more intuitive user experience in the app and online, more same day delivery options combined with enhanced AI user experiences. And our digital enhancements are earning outside recognition as Forrester just rated the Lowe's mobile app as the overall digital experience leader in U.

S. Retail mobile apps, highlighting not just the table stake functionalities and omni channel features, but also innovative AI enabled solutions like style your space that helps customers reimagine rooms that they want to refresh through the touch of a button. Next month in collaboration with OpenAI, we will launch the first AI powered home improvement virtual advisor on lowes.com, leveraging the same technology that our associates are using on their store companion app to give our customers helpful advice as they tackle their home improvement projects. This new virtual advisor will provide Lowe's customers with both project know how and product recommendations with direct links to specific Loews products for a seamless checkout. This is another example of how we're leaning into emerging technology to enhance the customer experience, saving them both time and money.

Now allow me to transition to our view of the macro. Even though short term interest rates have started to come down, this remains a challenging home improvement market. Mortgage rates are higher than they've been in more than two decades, creating a significant gap between today's rates for homebuyers and the lower rates many homeowners currently enjoy. This has led to a lock in effect and the lowest pace of existing home sales in The U. S.

In nearly thirty years. Although it's difficult to predict the timing of when we'll see lower rates and increased home improvement demand, we remain confident in the medium to long term outlook of our business. As I've stated before, the key drivers of our business are still supportive: home price appreciation, disposable personal income growing faster than inflation and the oldest existing housing stock in U. S. History.

These drivers will sustain long term demand as homeowners invest in repairs and upgrades. And we anticipate that some homeowners will begin to tap into record levels of equity in their homes to fund larger renovation projects. Beyond these factors, structural trends such as millennial household formation, baby boomers aging in place and the persistence of remote work reinforce our confidence in the medium to long term strength of the home improvement industry. In the meantime, we've refined our Toll Home strategy and are making investments that are closely aligned with the long term drivers of home improvement demand. We unveiled our updated strategy at the December Analyst and Investor Conference.

It includes driving pro penetration, accelerating our online sales, expanding our home services, creating a loyalty ecosystem and increasing our space productivity. In addition to the investments we're making in our Total Home strategy, we're also continuing to take cost out of our operating model through our perpetual productivity initiatives or PPI. Together, our Total Home strategy coupled with our disciplined focus on productivity ensure that we are well positioned to capitalize on the home improvement recovery and take share when

influx. When we look ahead to 2025, we're confident that the three market scenarios that we outlined at our December conference captured a range of potential outcomes we could see in the home improvement industry this year. And we are very confident in our strategic agility and our ability to execute in any economic environment. So we are prepared to outperform the market in each macro scenario that we outlined in December. Before I close, I'd like to take a minute to thank our teams who stepped up to support our customers across Southern California, who were impacted by the devastating wildfires.

Although this is not an area where we have significant store presence, we felt it was important to help these communities recover. As a reflection of this commitment, Lowe's donated $2,000,000 for relief efforts in the impacted areas. And please join me in continuing to keep those impacted by the wildfires in our thoughts and our prayers. I continue to visit stores across the country every week, which gives me a great opportunity to personally thank our frontline associates for their dedication and to learn how we can remove friction for them and improve the customer experience. To demonstrate our appreciation for our hardworking frontline associates, we awarded year end discretionary bonuses of $80,000,000 including our store managers and assistant managers across the company.

This bonus reflects our appreciation for their leadership and commitment to customer service. And with that, I turn things over to Bill.

Thanks, Marvin, and good morning, everyone. As Marvin mentioned, we are pleased with our sales performance in the fourth quarter. We are encouraged by the broad based strength we delivered in pro with positive pro comps across all merchandising divisions for the fourth quarter and the full year, as well as the continued momentum in our online sales. In addition, it's clear that our seasonal offers for the DIY customer hit the mark in categories like appliances, tools, storage and holiday gifts as Lowe's was the go to destination for many holiday shoppers. Starting with home decor, we delivered strong positive comps across all of our major appliance categories.

We're pleased that we took share in a challenging market, especially when homeowners continue to exercise caution around spending on big ticket discretionary items. Our results were driven by our investments in providing a seamless omni channel customer experience, including the widest selection of the leading brands that offer innovation and value, whether consumers choose to shop online or in store or a combination of the two. We have built a best in class market delivery model to deliver big and bulky products like appliances, patio furniture and grills, allowing us to double the number of next day deliveries over the past few years. And as a reminder, instead of going through our stores, these products now flow from our supply chain directly to a customer's home or job site. In fact, we are the only retailer that can now deliver and install a major appliance the next day in almost every zip code.

This is critical for customers who need to replace a broken appliance immediately as this type of purchase accounts for more than 70% of the industry's appliance sales. Our enhanced customer experience along with the expanded capacity for rapid delivery helps further strengthen our leadership position in appliances. We also continue to innovate and enhance our private brand lineup as consumers continue to look for more value across categories. For example, we're expanding our selection of large format Stainmaster luxury vinyl flooring nationwide, giving customers the on trend look they want and the performance that they need. We're excited to have the Stainmaster brand within our portfolio to now bring the most trusted brand in carpet to new flooring categories like luxury vinyl and tile.

We recently launched our Lowe's Essentials brand, which promises low prices on a range of home basics for value conscious customers. We're starting with a handful of products priced at $10 and below and special launch items under $5 including clothes hangers, gardening tools and water cans positioned in the cart start area at the front of the store. And because our private brands typically have higher margins than their national brand counterparts, these products will help increase our private brand sales and support our margin goals. Turning now to building products, where we delivered positive comps in building materials and lumber, driven by the continued strength in pro as well as storm recovery and rebuilding across the Southeast. We were pleased with the continued growth in outdoor categories like roofing, siding and decking, driven by our investment in pro inventory and our improved in stocks.

In hard lines, we saw a strong trim and tree sell through and an improved margin performance in the fourth quarter. These results were supported by great execution from our merchandising services team or MST. Our seasonal offering, including live holiday nursery, tools and pre lit trees resonated with consumers during the holidays. We also saw customers get excited about our 10 foot tall animatronic Yeti named Bumble, which we sold through almost as fast as we could get them in stock. In addition, we delivered solid growth in apparel where our expanded workwear lineup, including the extension of our Carhartt assortment to more than 1,000 stores was popular amongst our holiday shoppers.

And once again, customers couldn't get enough of the more unique items like our mini Loews buckets and mini cobalt toolboxes, which drove engaging viral moments on social media. Looking ahead, we're excited for spring, our biggest season of the year. We are ready with a strong in stock position in the best product and brand lineup in home improvement, like an outdoor power equipment, where we are the only home center with both Toro, the leading gas powered brand, and Ego, the leading battery powered brand, truly an unmatched offering in retail. And in our garden centers, we're inspiring our customers to take on new projects this spring with vignettes that showcase all the products they need for vertical gardens, mailbox displays, tree rings and more. As they shop, customers can rely on interactive signage to help them select the right plants for their space and local growing zone, ensuring they get everything they need to complete their outdoor projects.

We've also expanded our assortment of Stay Green products, our own lawn and garden brand. The updated packaging and product make the extra performance and value easy for our customers to find. This year, we're in an even stronger position to meet the customers' backyard needs, and we're seeing some early momentum in patio and grills in areas where the weather has already started to turn. Our patio assortments are localized for the market and we have a great lineup of grills across Weber, Charboro, Blackstone and Pit Boss, including new Loews exclusive products like the Weber Stealth family of grills. Overall, we're pleased that where the weather has cooperated, spring is already off to a good start.

Finally, we're excited to build on the great progress that we've made with our DIY loyalty program since we launched it last year. We have built a base of 30,000,000 members who are now outspending non members by nearly 50%. It's clear that these customers see the value in this free program, which now gives them even more incentive to choose Lowe's. This spring, we'll lean into loyalty by offering exclusive member deals and doorbusters featuring some of our best selling products and will support these offers with tech enabled marketing designed to drive traffic and sales during this important season. We took the learnings from the successful launch of Milo's Rewards and we've applied them as we redesigned our Pro Loyalty program, which Joe will discuss in detail in just a few minutes.

In closing, I'd like to thank our vendor partners, our merchants and our inventory and supply chain teams for all their effort and hard work to continue to serve our customers, provide innovation and value and drive results. With that, Joe, I'll now turn the call over

Thanks, Bill, and good morning, everyone. As Marvin mentioned, we're continuing to support communities impacted by the wildfires in California as they begin the rebuilding process. Our teams delivered truckloads of water and provided supplies like N95 masks, air purifiers, and aft shifters to firefighters, evacuation centers, and local communities in need. I'd like to recognize our store and supply chain associates in these areas who help customers and routed supplies, while tending to their own families, homes and communities.

We're grateful for their dedication and commitment to assist with the recovery over the long haul. Turning to our Q4 performance, I'm pleased that we continue to deliver strong customer satisfaction scores, including improved satisfaction with our BOPIS or buy online, pickup in store process, which we enhanced through our front end transformation. Now it's easier than ever for customers to get in and out quickly while they're picking up their online orders. We've earned these strong customer satisfaction scores while we set Black Friday and Cyber Monday sales records, which you heard about from Marvin. And since roughly half of our online orders are picked up in the store, the strong customer endorsement is particularly meaningful.

It tells us the investments we've been making in our front end transformation are paying off. At our Analyst Investor Conference in December, we discussed a number of ways we're driving productivity through our Perpetual Productivity Improvement or PPI initiatives. Let me give you some more insight into our efforts in this area as we continue to improve the freight flow process. Driven by new technology as well as redesigned labels and carts, we've dramatically streamlined the process, removed friction for our associates and improved our speed to shelf. The trucks that bring products to our stores are now organized in a way that makes unloading easier.

The labels include the aisle and bay location and there are specific directions for how to load carts efficiently. This reduces the number of touches by associates, so products can go straight from the truck to a cart to the specific bay without any unnecessary reloading. And to make the process even more efficient, these improvements give associates more detailed visibility to what's coming before it arrives. We are very pleased with the overall enhancements we continue to make in the operational performance of our stores. Transitioning now to our Pro performance.

We continue to see broad based growth across our geographies, driven by our Pro focused investments, resulting in high single digit comps again this quarter. In our recent survey, PROs indicated they are confident in their near term prospects with stable backlogs. Now let me give you an update on our revamped PRO loyalty program, MyLow's Pro Rewards, which we launched nationwide just last week. With our new program, we've tailored our offerings specifically for our target customer, small to medium pros, who can start earning rewards immediately and can achieve higher rewards with lower levels of spending compared to the program offered by our largest competitor. This program is easier than ever to use, offering an intuitive customer experience and prioritizing features and functions Pros use most.

As members, Pros have access to exclusive perks in store and in the Lowe's app and online, including member only deals, volume discounts, and a suite of business solutions. All of this is designed to help pros save time and money. Now both our DIY and Pro Loyalty programs run on the same tech platform and use the same currency, myLowe's money. This not only simplifies the customer experience, it's already making it easier for associates to explain and support the program. This should drive greater engagement with our pro customers and incentivize repeat purchases and more trips to Lowe's.

With both loyalty programs now in one platform, our marketing team is able to better leverage the unique data the programs generate to tailor offers for our pro and DIY customers. This is an exciting time for Lowe's as we continue to evolve our loyalty ecosystem and enhance the technology that powers it. We're making our programs stronger every day and more valuable to our customers. And we're now the only home improvement retailer to offer distinct programs for both DIY and pro customers. These programs are an important way we're bringing our value commitment to life for our customers by helping them save time and money.

And as we look ahead to spring, we're ready to serve customers with improved staffing levels and strong cross functional coordination across the organization. From store operations to merchandising to marketing, we're working together to provide our customers with unparalleled shopping experience, right on time to capture demand during our biggest selling season of the year. Before I close, I'd like to thank our hardworking frontline teams for their contribution to our results this year. Their expertise and commitment to excellent service are what differentiates Lowe's. In particular, I want to recognize our store managers and assistant managers who hold some of the most critical frontline leadership roles in the company.

In appreciation for their efforts, we're awarding them a discretionary year end bonus, dollars 10,000 for our store managers and $5,000 for our assistant managers. We're grateful for their incredible support and guidance they provide to their teams. And now, let me turn the call over to Brandon.

Thank you, Joe, and good morning, everyone. Starting with our fourth quarter results, we generated GAAP diluted earnings per share of $1.99 In the quarter, we recognized a pre tax gain of $80,000,000 on contingent consideration associated with the 2022 sale of our Canadian retail business. Excluding this benefit, we delivered adjusted diluted earnings per share of 1.93 My comments from this point forward will include certain non GAAP comparisons that exclude this benefit where applicable. Fourth quarter sales were $18,600,000,000 with comparable sales up 0.2%. Strong growth in pro and online as well as storm related demand from hurricanes Helene and Milton drove better than expected results.

We estimate the hurricane related demand positively impacted Q4 comp sales by roughly 100 basis points as homeowners began the shift from securing their properties and cleanup towards recovery and rebuilding. Comparable average ticket was up 1.5, driven by strong positive comps in appliances, continued momentum in pro and storm recovery project spend. Comparable transactions declined

with DIY discretionary pressure persisting, especially in larger ticket interior projects. Our monthly comp sales were down 2.5% in November, up 4.8 in December and down 2.2% in January. The calendar shift of Black Friday weekend and Cyber Monday from November in 2023 into December in 2024 shifted some demand between periods. Additionally, January was negatively impacted by unfavorable winter weather in the final two weeks of the month, especially in Southern markets. Gross margin was 32.9% of sales in the fourth quarter, up 46 basis points from last year, driven by the benefits of our ongoing perpetual productivity improvement or PPI initiatives, partly offset by supply chain investment costs.

Adjusted SG and A of 21% of sales delevered eight basis points versus prior year, driven by increased compensation and healthcare expenses, largely offset by benefits of multiple PPI initiatives. Adjusted operating margin rate of 9.4% of sales improved 36 basis points versus prior year. And the adjusted effective tax rate was 23.5% slightly below prior year. Inventory finished the year up $515,000,000 versus prior year as we accelerated targeted spring seasonal builds ahead of this critical period. Turning now to capital allocation.

In 2024, we generated $7,700,000,000 in free cash flow and returned $6,500,000,000 to shareholders through share repurchases and dividends. In the fourth quarter, we paid $650,000,000 in dividends at $1.15 per share and repurchased 5,500,000.0 shares for $1,400,000,000 returning $2,100,000,000 to our shareholders. Capital expenditures totaled $548,000,000 in the quarter as we continue to invest in tech driven productivity projects and key growth initiatives. Adjusted debt to EBITDAR ended the year at 3.01x, and we delivered a return on invested capital of 32% for the year. Now, I would like to take a few minutes to discuss our 2025 outlook.

In December, we laid out three scenarios detailing a range of potential outcomes based on the performance of the home improvement market. Core demand drivers remain supportive, real incomes are forecast to grow again in 2025, home prices are near record highs, and we have the oldest housing stock in U. S. History. But there is still a good deal of near term market uncertainty around the timing of an inflection in the home improvement market, especially for larger ticket discretionary spend.

We also expect mortgage rates to remain elevated, continuing to put pressure on existing home sales and some of the larger projects that are linked to those occasions. Based on these factors, we are forecasting the home improvement market to be roughly flat this year with Pro outpacing DIY driven by the repair and maintenance occasion. However, the investments we have made to drive growth are resonating, which is reflected in our strong Pro and online results this quarter. And we are confident that the new initiatives we laid out as part of our updated Total Home strategy will enable us to grow faster than the market and take share. Taking all of this into account, for 2025, we are expecting sales ranging from $83,500,000,000 to $84,500,000,000 with comparable sales in a range of flat to up 1%.

We expect operating margin in a range of 12.3% to 12.4% with PPI initiatives across store operations, merchandising and supply chain driving approximately $1,000,000,000 in productivity this year. This productivity will offset pressure from merit increases in general operating cost inflation, elevated healthcare expenses, investments in our Total Home strategic priorities and higher depreciation expense, which is forecasted to increase approximately $100,000,000 over prior year as we lean into our tech driven strategic investments. Additionally, we expect net interest expense of approximately $1,300,000,000 as we plan to repay $2,500,000,000 in debt maturities this year, but will also have less interest income due to lower short term investment rates. These assumptions result in expected full year diluted earnings per share of approximately $12.15 to $12.4 We also expect capital expenditures of approximately $2,500,000,000 as we invest in our Total Home strategic priorities and begin to ramp up new store builds. In 2025, we plan to open five to 10 new stores.

To assist with your modeling, here are a few items to keep in mind for the cadence of the year. We expect comp sales in the first half to be roughly flat with some spring demand moving from the first quarter into the second quarter where we are cycling particularly poor weather. Taking this into account, we expect first quarter comp sales approximately 200 basis points below the bottom end of our full year guide. We also expect first quarter operating margin rate to be approximately 50 basis points below the bottom end of our full year guide, driven by deleverage on the lower sales volume, the wrap of incremental wage actions for our frontline associates and the prioritization of investments in our total home strategic initiatives, including category accelerators to capture the spring selling season. In closing, we remain focused on executing at a high level through the near term market pressures by driving productivity, diligently managing cost and investing in our total home strategy, all while continuing to drive sustainable long term shareholder value.

And with that, we will open it up for your questions.

Thank you. We are now ready for questions. Our first question comes from the line of Christopher Horvers with JPMorgan. Please proceed with your questions.

Thanks and good morning everybody. I want to talk a little bit about the strength that you saw in the fourth quarter and how you're putting that into context. You had maybe did you see election deferral? Was there any weather benefit sort of or weather benefit that maybe helped November and December? Obviously, you had the hurricane and the storms.

Do you think there was tariff pull forward? Putting that in the context of that comp in the context of how you guided the year, you're really not expecting much improvement even though we're another year out from the COVID pull forward dynamics?

Hey, Chris, this is Marvin. I'll take the first part and I'll let Brandon give some specifics. Look, my main point is overall, we're really pleased with how we performed in the quarter. This, as we said in the prepared comments, remains a very difficult home improvement macro backdrop and we're pleased across the board with the execution of the merchants to store supply chain and in our stores. As a result of that, we delivered the positive comp and we still have confidence in 2025 in spite of the fact that we don't expect the market to have any growth.

I'll let Brandon give you more specifics relative to Q4 and how we feel that relates to 2025.

Yes. Thanks, Marvin. Chris, I'd just echo, really pleased with the execution in Q4 beats top and bottom line positive comps and EPS growth here for the first time in a couple of years, high single digit growth in pro and online, gave us the ability to share in that success with our associates paying $80,000,000 in discretionary bonuses back. You mentioned the weather, was a drag, in particular for January, impacted the month, just north of about 150 basis points. That is pressing into here the month of February, which is, we've seen particularly poor weather here over the course of the first three weeks.

That is factoring in to how we're thinking about Q1 and the full year just from a company specific standpoint. But from an overall macro standpoint, we expect the conditions to remain challenging in 2025. And as we talked about in the prepared remarks and all that's been taken into consideration as we looked at a flat home improvement market. And then where we fall relative to that, we expect to drive about 100 basis points from our total home initiatives. And that's how we get to our guide as we start thinking about '25.

Got it. And then as a follow-up, you talked about the investment pressures here in the first quarter along with obviously the deleverage. But can you talk about the on the other side of it, can you talk about the shape of gross margin over there? You are still expecting, I think, the vendor clawbacks do cycle into the first half of the year and I think they should be decent in terms of tailwinds. So do you expect gross margin up and then roughly flattish over the year?

Yes. Chris, you cited the Q1 '50 basis points that we highlighted on the operating margin. Majority of that is from the sales deleverage. We have about $400,000,000 that we expect to shift from Q1 to Q2. So that's going to put a little bit of pressure on Q1.

There's also a few other unique items with the wage investment that we made in the second half of the year that we're cycling in some upfront investments in particular in the category accelerators that we're rolling out. We're expecting the PPI to continue to ramp as we move through the year. Your question on gross margin, we are expecting that to be overall flat for the year. As we look at that, again, the PPI initiatives are offsetting pressure that we're seeing as we invest in the Pro business and in our supply chain. I will also say, we're very focused on continuing to invest in value for our customers.

We're investing in sales and traffic driving actions, especially as we look at first half seasonal promotions, marketing and price action to ensure that we maintain leadership. And we really like the model. We've created a model that allows us to make investments in the associates, improve our value proposition with our customers and still hit our rule of thumb as we start to see sales increase over the course of the year.

Our next question is from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.

Good morning, everyone. Just to clarify, the sales guidance for the year, is this roughly the same framework from two months ago? Or did it move slightly because of either backdrop or even the slower start or some of the volatility that you saw? Because it sounds roughly the same. And if you are going to take market share, I think it would still lean closer to the one.

So I'm just trying to put that out to understand if anything changed at all in the last couple of months?

Sure, Simeon. This is Brandon. Roughly the same, I would say, from an overall macro, as I mentioned, the weather pressure in January, we're factoring that in as we've seen a slower start here to February. Also mentioned, we're lapping the expected hurricane benefit that actually outpaced our expectations in terms of what we saw in 2024. We saw about 100 basis points of benefit each in both Q3 and Q4 and that's going to create a slight drag for us as we look at 2025.

But the conditions still remain challenging, elevated rates, cautious consumer, particularly around the big ticket discretionary, those are all things that we cited back in December. And again, relative market still roughly flat. So overall the framework we're trying to take into account some near term company specific items, but I would say overall still the same framework.

Simeon, this is Marvin. Just two additional points. So specific to February, where the weather has cooperated, spring is off to a good start in February. But overall, February is pressured because of the weather specifically in parts of the South and that's again not a surprise to anyone. Relative to the scenarios we laid out in December, in all three of those scenarios, as a reminder, it included outperformance.

And so even though we look at the home improvement market or our relevant home improvement market in 2025 being roughly flat, we plan to outperform that. And so if the market is better than what we anticipate, we anticipate our performance is going to be better than the market. So irrespective of what the market gives us, we believe we have the initiatives, the agility and the strategic plan to outperform it.

Fair enough. My follow-up, it's about the relationship with PPI and then how the business performs. So let's just say the market ends up being a little lighter. You have a specific plan on what you're going to spend and invest in for this year. Does that change at all?

And then if it doesn't change, do you have toggles in PPI to help offset it to basically land the margin in a certain place? So could you just give us a sense of the flex that you have in both of those areas and how you approach them?

Yes, Simeon, I would say definitely some flex in that, but right now we've built the plan. We highlighted in December, we have one twenty five. That's split roughly evenly across the portfolio about $500,000,000 in margin consisting of the merchant supply chain efforts and other $500,000,000 on the expense side, mainly through the stores teams. We expect that to continue to sort of ramp as we move through the year. And as we've referenced, we're confident in the flywheel that we've created with PPI and believe we have the right opportunity here for 2025 as well as the multi year opportunity.

So look, as things soften, as they get better, certainly can ramp up, ramp down in terms of near term factors as well as some of the larger initiatives, but really confident with the plan that we have in the operating margin that's been included in our outlook.

Our next question is from the line of Peter Benedict with Baird. Please proceed with your questions.

Hi, guys. Thanks for taking the question. First, just on just the outlook for the hurricane rebuild. I understand you start to cycle in the back half of the year. Any reason you wouldn't expect kind of a similar dollar lift, I guess, over the first half

year versus what you've seen? Is there anything unique or different about the rebuild or the cadence of the rebuild you're seeing versus maybe what your expectations were? That's my first question.

Yes. So, Peter, I think definitely have some benefit that we baked in here in the first half. But as you know, especially in some of these hurricane markets, the timing of the insurance proceeds, when that's going to get awarded, how that's going to be re spent. So we've tried to take a

more of a conservative approach. And as we think about the benefit that we do have baked in, as I mentioned, slightly lower than what we saw in the back half of the year. And that's how we cadenced it in. But we're ready to support in these markets. We've loaded in inventory from a pro standpoint, ready to support across the Carolinas and Florida.

But just in terms of financially what we baked in, that's the assumption.

Okay. That seems prudent. That leads me to my next question around the pro, really good to see the performance there. Can you maybe talk about the broadening of the engagement or the demand that you're seeing within the Pro segment? Give us a sense for or remind us how you define kind of small versus medium versus larger Pro.

And then any categories in particular that are kind of resonating as you continue to put these good growth rates with your pro business? Thank you.

Yes. So, Peter, I'll take the first part of that and I'll let Bill talk about the category performance. We define the Pro based on the Pro shopping pattern and their annual spend. And again, we do quarterly surveys, so we really engage with these customers. We understand the business that they're in.

We understand what their annual spend and we basically understand what their overall financial position is. And so we define it in that regard. Now the thing that we've been able to do is to really see the benefits of our Toll Home investments really taking hold on things like responding to product load in, improved service levels, a more flexible and agile delivery. And we saw double digit pro growth online. And again, we just think we have a best in class online offering.

And as you think about the overall engagement of the pro, we think it has a lot to do with some of the brands that merchant teams have brought to bear in addition to the fact that we have made a commitment to have inventory where it needs to be and to have the delivery flexibility that we really never had before. And we're excited about the relaunch of our loyalty program, My Loyalist Pro Rewards based on the fact that the data that we receive from those customers is that they wanted something that was more simplistic, but also something that they could earn and achieve higher rewards at lower spend levels because again they are more of a smaller to medium sized small business. Overall, we feel great. We think that momentum is going to continue and I'll let Bill be specific about some of the categories that we've seen take out as a result of these efforts.

Yes. Thanks, Marvin. And Peter, as I said in my prepared remarks, we're really pleased with the Pro business, both for the quarter and for the year as we saw positive growth across every merchandising category for the quarter and for the year. And so largely led by what you would think is those pro centric areas, but building materials, lumber, millwork, some of those key categories, but also strength across appliances, paint and some other businesses across store tools, hardware. So it's really encouraging for us to see the strength both in the quarter and for the year across those merchandising categories in Pro.

Our next question is from the line of Kate McShane with Goldman Sachs. Please proceed with your question.

Hi, good morning. Thanks for taking our question. We wondered if you could talk to us about how you're thinking about transaction versus ticket throughout 2025? How much inflation do you think can be in the space during the year? And specific to Q1, when you're going through why the margin would be slightly below the range for the year, you mentioned category accelerators as one of the drags.

Is that just something that's happening more in Q1 than the other quarters? And can you remind us what that looks like?

Sure, Kate. This is Brandon. I'll hit the ticket transaction assumption for 2025. We are expecting slight ticket growth and that's mainly driven by the continued strength that we're expecting to see in Pro. The offset is that we also expect DIY traffic pressures to persist as we look at the balance of 2025.

Commodity inflation, not really a part of that formula. We expect that to be muted just as we've seen for the majority of 2024 and that's as it relates to lumber and copper. As it relates to the Q1 pressure, I mentioned the main item just being the shift in sales due to the season that we're cycling last year. So you have the sales deleverage, the wage investment. And I would say from a total home strategy standpoint, in the initiatives, a little bit of unique pressure in Q1, just given the timing of the rollout, in particular, the category accelerators where we're going out and resetting and touching our stores, as we look at the rural initiative rollout and some of the other things that we're doing there.

So, I would say that's the uniqueness there as it relates to Q1, in particular with that initiative.

The next question is from the line of Gregg Malek with Evercore ISI. Please proceed with your questions.

Hi, thanks. I wanted to just follow-up a little bit there on inflation. What was it in the quarter? Was it anything as part of that ticket growth? And are tariffs contemplated in your guide?

Greg, I would say like for like inflation, pretty muted when we look at Q4. And then your question on tariffs, it's not explicitly included or incorporated in our guide in terms of what's recently been enacted. But I would say there the situation very fluid. Our teams are already activating against the tariffs that have been enacted. We're running the play.

We're keeping a close watch on other potential policy changes or announcements that may be coming and prepared to respond. We're confident our merchant and finance teams across my team and Bill's team have the right tools and processes in place and we continue to run that and respond in an effective manner.

Got it. And on the leverage, you've talked about at the Analyst Day that sort of 10 bps of leverage on the upside and potentially 15 on the downside. Is that still a good framework to think about given the demand levels here?

Lowe's (LOW) Q4 2025 Earnings Call Transcript

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