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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AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

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

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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WMA 2024-Lowe's

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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 Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

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

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Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

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. 

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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.

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

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Lowe's

lowe's

I'll now turn the call over to Kate Pearlman, Vice President of Investor Relations and Treasurer.

Thank you. Good morning. Here with me today are Marvin Ellison, Chairman and Chief Executive Officer, Bill Boltz, our Executive Vice President, Merchandising, Joe McFarland, 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 Lowe's Investor Relations website.

During this call, we will be making comments that are forward-looking, including our expectations for fiscal 2026. 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&A, and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we'll 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. Before turning the call over to Marvin, I'd like to ask that you please hold December 9th for our 2026 Analyst and Investor Conference, which will take place in New York City. I'll turn the call over to Marvin.

Thank you, Kate. Good morning, everyone, and thank you for joining us today. In the fourth quarter, sales were $20.6 billion and comparable sales increased 1.3%. For fiscal year 2025, we delivered sales of $86.3 billion, positive comparable sales of 0.2%, and adjusted operating margin of 12.1%. This led to adjusted earnings per share of $12.28, a 2% increase over last year. Despite a challenging industry backdrop, our relentless focus on expense management allowed us to hold adjusted operating margins flat to the prior year when excluding the impact of our recent acquisitions. Our outperformance in the fourth quarter demonstrates our team's disciplined execution, our outlook for 2026 remains cautious, given the persistent volatility in the housing macro.

This uncertainty continues to pressure big-ticket, discretionary DIY projects, as many consumers are reluctant to make significant investments in their homes. Within this challenging macro environment, it is imperative that we remain focused on our perpetual productivity improvement or PPI initiatives. This commitment to PPI is at the center of the announcement we made recently to eliminate approximately 600 corporate and support roles.

Although these are difficult decisions to make, this workforce reduction will help us create greater financial agility within our dynamic industry while continuing to invest in customer-facing areas of the company. We will continue to manage what is within our control, which is reflected in the strength we delivered across Pro, Online, and Home Services, as our Total Home strategic initiatives are resonating with our small and medium Pro and DIY customers alike.

Starting with our Pro results, we delivered another quarter of growth as we continue to gain traction with our transformed offering. Our Pro customers are responding to our compelling brand and product assortment, investments in inventory, job site delivery, enhanced service levels, and a tailored digital experience. We're further enhancing our Pro brand offering by extending our assortment of the number one power tool brand, DEWALT, the tool of choice for pros for over 100 years. We are excited that we now carry the largest selection of DEWALT power tools and accessories in our stores and online. Moving to online, we delivered a 10.5% growth this quarter and set new sales records this holiday season on both Black Friday and Cyber Monday.

Both DIY and Pro customers continue to shift their shopping online as our enhanced user experience and fulfillment options offer the ease and convenience that they are seeking. In fact, on Black Friday, our Lowe's app was so popular that it was the number one free app in the shopping category on Apple's App Store in the U.S. This level of engagement reflects the investments we've made to create a seamless omnichannel shopping experience. As customers continue to integrate AI into their shopping habits, we are collaborating with leading digital platforms so that we are well-positioned to participate in agentic commerce. Now, turning to Home Services, where we delivered high single-digit growth.

This is another example of a customer experience that we have overhauled at Lowe's by removing the friction from what was a time-consuming process through digital tools and enhanced service to create an intuitive installation solution for our Do It For Me customers. Let me now shift to our view of the broader macro environment. Consumer confidence remains subdued given inflationary pressures and overall economic uncertainty. Despite modest relief in short-term interest rates and market expectations for additional Fed cuts, mortgage rates remain elevated.

As a result, a persistent lock-in effect remains in place, keeping housing turnover and new home starts under pressure, leading us to expect improvement in both the housing and home improvement markets to be gradual. That said, the structural demand drivers of the home improvement industry remain strong, with home equity setting new record levels and homes continuing to age, averaging 44 years old.

With the chronic supply-demand imbalance in housing, analysts continue to expect that approximately 16 million new homes will be needed in the United States over the next decade. Despite near-term industry headwinds, we're pleased that our investments in our Total Home strategy and operational excellence are paying dividends. Our compelling product assortments, flexible fulfillment options, innovative installation solutions, and best-in-class digital experiences are appealing to both the value-conscious homeowner and the busy pro.

We're confident that these investments position the company to outperform the market, regardless of macro conditions. With the recent acquisitions of Foundation Building Materials, or FBM, and Artisan Design Group, or ADG, we are well-positioned to participate in the expected recovery in housing. As we start the year with these two companies, our integration efforts are on track, and we're focused on capturing cost synergies by leveraging our combined scale.

We're also developing solutions to support cross-selling opportunities that will enhance our offering to our respective pro customers by capitalizing on complementary product offerings. While FBM and ADG are navigating a challenging residential construction market, we expect them to build on their leadership position this year, leveraging their reputation for exceptional customer service while maintaining operational discipline.

In addition, we're pleased with FBM's commercial business, which represents roughly half of its revenue, as they continue to win new data center contracts, which reflects the benefits of a diverse customer base. Before I close, I want to take a moment to recognize our frontline associates who continue to show up every day with a strong sense of ownership and commitment to serving our customers and communities.

As a demonstration of our appreciation for their efforts, we awarded a discretionary bonus of $125 million to our dedicated frontline associates for their outstanding performance in the fourth quarter. This includes our assistant store managers, department supervisors, and hourly associates in our stores and distribution centers. It's an honor for me to continue to support these hardworking men and women. Our dedicated frontline associates are the primary reason Lowe's was recently recognized as Fortune's number one most admired specialty retailer. This honor truly belongs to them. I'd like to congratulate our team for delivering another year of outstanding customer service. With that, I'll turn it over to Bill.

Thanks, Marvin. Good morning. We're pleased with our sales performance this quarter as we delivered positive comps in 9 of our 14 merchandising divisions. Our teams remain focused on offering value and innovation to consumers who continue to be mindful about their home improvement spending. This holiday season, we helped our customers celebrate with exciting offers and deals on appliances, tools, Trim-a-Tree, and more, making Lowe's a popular destination for holiday shoppers, both in-store and online.

Starting with building products, we delivered broad-based growth, driven by solid performance in both pro and home services. Rough plumbing was a standout, with continued strength in water heaters, water treatment, and HVAC, along with strength in other pro-focused areas within our plumbing assortments. This includes a new merchandising display for SharkBite PEX pipe and fittings.

It showcases straight pipes stacked upright, which pros prefer over coiled product, as it makes it easier for them to use on the job site. We delivered positive comps in millwork with strong performance, especially in windows and doors, supported by leading brands such as Pella, Therma-Tru, and LARSON, which are exclusive to Lowe's in the Home Center channel. Our convenient installation solutions, combined with our affordable credit offers, are helping customers manage these larger replacement projects. Turning to home decor, where we delivered positive comps across kitchens and bath, paint, and in appliances, where we continue to build on our market leadership position. With the widest assortment of leading brands, competitive pricing, and rapid delivery, consumers are turning to Lowe's more often for their appliance needs, whether urgent or planned.

As a reminder, Lowe's remains the only retailer that can deliver and install major appliances next day in virtually every zip code in the U.S. In kitchens and bath, our recent reset in bathroom vanities continues to drive results as customers appreciate the improved shopping experience and the easier access to big and bulky products. Within our bath program, we're pleased that we've been selected by TOTO to be the first big box retailer to offer their innovative toilets as we leverage our larger showrooms to feature their premium product, which will be exclusive to Lowe's in the Home Center channel.

This quarter, we were also encouraged by our results in paint, where we delivered positive comps with broad-based growth across interior and exterior paint, primers, stain, and attachments, as customers took advantage of milder weather earlier in the quarter to work on outdoor projects. We're off to a great start with the new Sherwin-Williams ProBlock Quick Dry Primers, which we introduced in Q3. Pros are responding to the superior quality and performance versus the competition, helping to drive double-digit pro comps in primers in Q4. Looking now at hard lines.

We delivered growth in hardware, seasonal and outdoor living, and lawn and garden, driven by strong holiday and gift-giving assortments, along with storm-related demand. It was exciting to see customers line up at our stores early on Black Friday, inspired by our creator network, to take advantage of our My Lowe's Rewards Blue Bucket giveaway, including a chance to win a golden ticket for a free appliance priced at $2,000 or less.

Our holiday Trim-a-Tree assortment was also a hit, driven by our strength in animatronics, and customers also responded to great deals in the Tools Gift Center with values from Klein, DEWALT, Bosch, and Kobalt. We also had compelling member-only deals online as well, where we delivered yet another record for the Black Friday/Cyber Monday weekend, along with several viral moments that centered around our bucket giveaway and trending products like mini buckets, teeny totes, and mini toolboxes. In January, we helped customers prepare for winter storms Fern and Gianna with generators, snowblowers, ice melt, flashlights, and gas cans, which contributed to positive comps in seasonal and outdoor living and lawn and garden.

In the quarter, we also completed the rollout of pet and workwear to more than 1,000 stores as we continue to expand our offering of convenience items that help our busy customers make the most of their shopping trips. Given the solid results from these new assortments, we'll be expanding them to the remainder of our stores in 2026. Shifting gears, our teams are delivering against our ongoing perpetual productivity improvement, or PPI initiatives, which I outlined at our last Analyst and Investor Conference.

These include disciplined product cost management, improving inventory productivity, maintaining a disciplined approach to pricing and promotions, and expanding Lowe's Media Network. This year, our supply chain, merchandising, and finance teams drove inventory productivity and completed our multiyear SKU rationalization initiative, while also effectively navigating an unprecedented volume of tariffs and ensuring strong in-stocks to drive sales.

We are growing our Lowe's Media Network as we help our suppliers better connect with our shared customers, leveraging insights gained through our loyalty programs. As we look ahead into 2026, we'll empower our merchants with new AI tools that make their workday more efficient, freeing up time for them to focus on driving sales and optimizing our product assortments.

We will also introduce new tools to our merchandising services team, or MST associates, that will direct them to service the right base at the right time based on the sales trends of their store. Looking ahead to spring, we're ready to capitalize on the demand driven by our biggest season of the year with great values, the best products and brands, and strong in-stocks to help our customers tackle all their spring projects.

We have an unmatched outdoor power equipment lineup in the home center channel, the only one to offer Toro, the leading gas-powered brand, and EGO, the leading battery-powered brand. We have a wide array of grills to choose from across Weber, Char-Broil, Blackstone, Pit Boss, along with our own private brand, Master Forge. Our new patio lineup is stronger than ever, designed to help our customers enjoy their outdoor living spaces in style.

We will also continue to earn customer loyalty through our DIY loyalty program, My Lowe's Rewards. We recently introduced a new perk for members, My Lowe's Rewards Kids Club, featuring in-store workshops, family engagement events, and giveaways for young DIYers, helping us connect with the next generation of homeowners. As part of these efforts, we are also excited to expand our relationship with the number one influencer in the world, MrBeast.

Later this spring, you'll see us activate this partnership across family experiences, merchandise, and more. As I close, I want to thank our merchants, MST associates, and vendor partners for their hard work and partnership this year. Their focus on delivering the best for our customers really sets the bar, and we value the important role that all of them play in helping to drive our success. With that, I'll now turn the call over to Joe.

Thank you, Bill. Good morning, everyone. I'd like to begin by thanking our frontline associates and store leaders for their outstanding work, supporting our customers impacted by Winter Storms Fern and Gianna, reflecting the critical role our stores play during hard-hitting weather events. Their commitment matters. It is just one example of the ongoing focus on customer service that our associates deliver day in and day out.

Once again, this quarter, we drove improved customer satisfaction for both DIY and pro customers, including during another busy Black Friday and Cyber Monday weekend. Customers appreciated our flexible fulfillment options during the busy holiday season, as they relied especially on same-day gig delivery to meet last-minute shopping needs. Turning to our fourth quarter performance, I'm pleased that we delivered another quarter of growth in pro.

We are building on our momentum by expanding our pro sales force, which allows us to reach new customers while also growing share of wallet with existing pros, including in their planned spend. With the recent rollout of our new AI-enabled Pro Companion, we're giving our pro sales team even more opportunities for success. This new capability helps sales associates quickly prepare for conversations with pros by enabling rapid access to relevant information so they can walk in with recommendations already in hand, leading to more effective customer interactions. We're helping the sales associates at the pro desk serve complex orders through the Pro Extended Aisle, which is a direct interface to our suppliers' catalogs.

We've just introduced a new feature that allows us to stage job site delivery, so pros can get what they need immediately and then deliver the rest of the order at a later date based on their schedule. This new capability not only improves the customer experience, it replaces what was a time-consuming process for our associates with a single click. I'm also excited to share that Lowe's is now the exclusive national home improvement partner to the National Association of Home Builders, or NAHB.

This allows us to connect with their 140,000+ pros and offer member-only savings. Looking ahead, in our recent survey, our core pro customer indicate they continue to work on smaller-ticket repair projects and that their backlogs remain stable. Now, let me discuss the progress we've made this year against our perpetual productivity improvement initiatives or PPI.

As a reminder, each year, our store operations teams tackle a number of productivity initiatives. Let me give you a couple of highlights from 2025. In the fourth quarter, we completed the rollout of our front-end transformation across our store portfolio. This multiyear effort meaningfully improves the checkout experience for customers while freeing up labor hours, so associates can spend more time serving customers in the aisle.

The transformed front end includes an expanded buy online, pickup in store area that makes it faster and easier for our customers to grab their online orders, helping us better serve the continued shift to omni-channel shopping. We've also enhanced our freight flow as part of our PPI work. By redesigning the process and leveraging tech-driven solutions, we've made meaningful gains in labor productivity as we more efficiently move product from the truck to the sales floor.

Looking ahead to fiscal 2026, we're already working on our next set of PPI initiatives. One priority is to even further enhance our stocking through an initiative we're calling Freight Flow 3.0, which allows us to better sequence inbound inventory from our distribution centers. Overnight teams will focus on stocking the highest priority product immediately, while early morning teams arrive earlier to manage the remaining product flow.

This approach means more associates are available to help our pro customers when they arrive early to shop before heading to their job sites. These changes are already yielding better inventory accuracy and in-stocks, while also supporting customer service. Another PPI goal this year is our new full shelf replenishment initiative, which launched across all stores last month.

Using real-time data to identify out-of-stocks, this AI-enabled technology sends stores a prioritized list of the most critical items to restock, which helps ensure that products are available where and when customers need them. These enhancements are improving both the associate and customer experience. With better visibility, smarter prioritization, and more product on the shelf when it's needed, our stores are becoming easier to shop every day.

As Marvin mentioned, we are recognizing our frontline teams in our stores and supply chains for their critical contributions to our results in the fourth quarter and this year with a discretionary bonus. Assistant store managers will receive $5,000, and hourly associates will receive bonuses ranging from $150 to $700. These bonuses are on top of their normal incentive plans.

These associates show up every day with a relentless focus on customers and eagerness to embrace new technology and a commitment to helping one another succeed. This bonus is a reflection of a culture of winning together that we have created. That's what sets Lowe's apart. With that, I will turn the call over to Brandon.

Thank you, Joe. Good morning. Starting with our fourth quarter results, we generated GAAP diluted earnings per share of $1.78. In the quarter, we recognized $149 million in non-GAAP charges associated with the acquisitions of Foundation Building Materials, or FBM, and Artisan Design Group, or ADG.

Keep in mind, in the fourth quarter of last year, we also recorded a pre-tax gain of $80 million associated with the 2022 sale of our Canadian retail business. Excluding these impacts, we delivered strong results for the quarter with adjusted diluted earnings per share of $1.98. My comments from this point forward will include certain non-GAAP comparisons that exclude these impacts, where applicable.

Fourth quarter sales were $20.6 billion, with comparable sales up 1.3%, driven by growth in pro, online, and home services, as well as winter storm activity. We estimate that the demand related to Winter Storms Fern and Gianna positively impacted Q4 comp sales by approximately 50 basis points. With a strong start to the holiday season, we delivered positive comps of 0.4% in November. Comps were down 1% in December, then accelerated to 5.8% in January, lifted by storm-related demand. Comparable average ticket increased 3.6%, driven by price increases and a mix into pro and appliances, while comparable transactions declined 2.3%.

For the fourth quarter, adjusted gross margin was 32.7%, down 18 basis points as the dilutive impact of FBM and ADG was nearly offset by higher credit revenue, multiple PPI initiatives, and favorable product mix. Adjusted SG&A was 21.4% of sales, deleveraging 37 basis points as higher frontline discretionary bonuses and annual incentive payouts, as well as sales-driving actions, were partly offset by the accretive impact from the acquisitions.

Adjusted operating margin rate of 9% was down 41 basis points versus prior year, and the adjusted effective tax rate of 23.6% was consistent with the prior year rate. Consistent with our expectations, FBM and ADG operating results were accretive to adjusted EPS for the fourth quarter, while diluting operating margin by approximately 30 basis points.

Inventory ended Q4 at $17.3 billion, in line with prior year, despite the inclusion of approximately $500 million in inventory from acquisitions as well as higher tariffs. We continue to execute on multiple inventory productivity initiatives through AI-enabled solutions while also benefiting from SKU rationalization. These outstanding results demonstrate the strategic alignment and collaboration we're driving across the organization.

Shifting gears to capital allocation. In 2025, we generated $7.7 billion in free cash flow and returned $2.6 billion to shareholders through dividends, which includes a dividend of $1.20 per share in the fourth quarter, totaling $673 million. We invested approximately $3 billion in cash for the acquisitions of ADG and FBM, and borrowed $7 billion to finance the remainder of the purchase price of FBM.

During the year, we also repaid $2.5 billion in bond maturities. Capital expenditures totaled $2.2 billion for the year, driven by investments in our Total Home strategic initiatives. Adjusted debt to EBITDA was 3.31x at the end of the quarter. We ended the quarter with $982 million of cash and cash equivalents and delivered return on invested capital of 26.1% for the year. I would like to discuss our 2026 financial outlook. While short-term interest rates have been coming down, affordability and the lock-in effect continue to pressure demand. Consumers are still cautious about discretionary big-ticket purchases. While many homeowners will receive larger refunds this year, it is unclear how much of that will be spent on home improvement.

It is also unclear when mortgage rates will ease, which will continue to exert pressure on existing home sales and new home construction. Taking all of this into account, we forecast the home improvement market to be roughly flat this year in a range of down 1% to up 1%. We remain confident in the continued execution of our Total Home strategy, which will enable us to grow faster than the market and take share.

With that, we are expecting 2026 sales ranging from $92 billion-$94 billion, with comparable sales in a range of flat to up 2%. We anticipate that ADG and FBM will contribute approximately $8 billion to sales. We expect operating margin in a range of 11.2%-11.4% and adjusted operating margin in a range of 11.6%-11.8%.

This includes 30 basis points of dilution related to the wrap of FBM and ADG in 2026. As a reminder, the acquisitions drive approximately 50 basis points of dilution on an annualized basis. We expect gross margin to decline approximately 75 basis points compared to the prior year when we factor in the dilution related to the acquisitions. However, the acquisitions are accretive to consolidated SG&A as a percentage of sales. We will continue to drive our perpetual productivity improvement, or PPI initiatives, across the enterprise with a target of roughly $1 billion of productivity again this year. This includes the impact from the workforce reduction that Marvin mentioned earlier. This productivity will offset pressure from merit increases and general operating cost inflation and continued investments in our Total Home strategic initiatives.

Additionally, we expect net interest expense of approximately $1.6 billion as we absorb incremental expense related to the FBM acquisition, partly offset by planned repayment of $2.3 billion of bond maturities in the first quarter. These assumptions result in expected full-year diluted earnings per share of $11.75-$12.25. We expect adjusted diluted earnings per share of approximately $12.25-$12.75. This includes the impact from FBM and ADG, which is expected to be accretive to adjusted EPS for the year. We also expect capital expenditures of approximately $2.5 billion for the year as we invest in our strategic imperatives to drive growth. This will be heavily concentrated in our retail business.

Finally, to assist you with your modeling for the first quarter, here are a few points to keep in mind. Given severe winter storm activity in February, we are now expecting Q1 comp sales to be below the midpoint of our full-year guide. Adjusted operating margin rate is expected to be approximately 20 basis points below the bottom end of our full-year guide due to the dilutive impact of the acquisitions.

In closing, we're pleased with our track record of disciplined execution and that our DIY and Pro initiatives are gaining momentum. Looking ahead, we are confident that we're making the right investments to deliver long-term sales growth and sustainable shareholder value. With that, we will open it up for your questions.

Thank you. We're now ready for questions. If you'd like to ask a question, press star one on your telephone keypad. To withdraw your question, press star two. In order to allow questions from as many individuals as possible, please limit yourself to one question and one follow-up. Our first question is from the line of Peter Benedict with Baird. Please proceed with your question.

Oh, hey, guys. Thanks for... Thanks for taking the question. I guess my first one is just on the Pro Extended Aisle efforts that you guys started to kind of roll out last year. Just maybe give us a sense for where you are with that. It got a brief mention in the prepared marks, but I'm just curious kind of where you sit with that, what the opportunity is going forward. That's my first question.

Hey, Peter. Good morning. This is Marvin. look, we continue a multiyear build-out for 2026. we're very pleased. It's actually exceeding all expectations. We're adding new suppliers, new markets every single week, and we'll do that throughout 2026. You know, this is helping us create more traction with planned Pro spend. That's something that has been on our playbook for quite a while. We're excited to get new products like vinyl siding, building materials, doors, flooring, electrical wiring.

Overall, we feel really good about this. We're not yet providing specific financial results other than to say, this is exceeding expectations, assisting with the planned Pro spin, and something we're excited about, and we think it will help to drive our Pro business for the balance of this year.

Thanks for that, Marvin. I guess my follow-up would be maybe for Brandon, just how should we think about the incremental margins here once we get past, you know, integrating the acquisitions and the noise that's kind of related with that? I think there's a question out there in terms of, you know, as sales eventually start to recover, you know, what the flow through is gonna look like. Any updates to your thoughts there? Just level set us on what your view is there. Thanks so much.

Sure, Peter. I'll start with the fact that, you know, we're very pleased here with our Q4 performance progression of the year. We had positive comps here for the last three quarters. Marvin announced a payout to our frontline associates of $125 million in discretionary bonuses, delivered another $1 billion in productivity, delivered flat operating margin on the core business for the year. That all being said, as we look ahead to operating margin for 2026, as we've referenced, and as I said in my earlier comments, FBM and ADG is creating an additional 30 basis points of dilution related to the RAP, 50 basis points on an annualized basis. We are generating $1 billion incrementally in productivity for 2026, as we outlined at our AIC last year.

We are seeing some modest incremental cost pressures that we haven't previously anticipated that are also embedded within that. I also mentioned that we're continuing to invest in a number of sales-driving initiatives that are tailored to, you know, value-conscious consumer, investing in fulfillment options, member benefit. All that's reflected in our updated expectations for 2026. The last thing I'll say, Peter, you know, I think this team's demonstrated a history of disciplined execution. We believe it's a hallmark differentiator for us and expect that to continue here in 2026 as we focus on landing that number.

Our next question is in the line of Christopher Horvers with JPMorgan. Please proceed with your question.

Thanks. Good morning. My first question is just thinking about demand. I know you said Fern and Gianna were 50 basis points benefit to the quarter. You know, that would still suggest like a two or three in January. If you look at the two-year run rate, you know, that also improved in both December and January. For the quarter, and you were lapping, I think, a 70 basis point headwind relative to the hurricane recovery last year.

You know, at a big picture level, do you think the demand in the category is just starting to elevate at the margin? Could you maybe try to put together the narrative around the winter storms versus lapping polar vortexes versus lapping also hurricanes last year? You know, some detail there on sort of the net weather, and elevate to a high level, how you think about whether or not maybe the demand's just getting better at the margin?

Yeah, sure, Chris, this is Brandon. A lot to unpack, as you mentioned here for Q4. I'll start with... You know, you referenced we had 100 basis points of headwind from Hurricane Helene and Milton last year. That has been in part offset by the benefits. I called out 50 basis points for Fern and Gianna here in Q4. We also referenced on the call last year an easier lap from the ice storms that played out over the course of January. As it's specific to the month of January, the 50 basis points on the quarter for Fern and Gianna was about 200 basis points on the month.

Sorta cutting through all of that noise, we're still very pleased with the underlying demand trends, and traction that we're seeing across all areas of the business, Pro, DIY, DIFM. As that translates, looking at Q1, we do expect the demand drivers that we've seen, the underlying consistency, to be again consistent with what we've seen in Q4. We are seeing some level of disruption here out of the gates with the aftereffects of Fern and Gianna to start the month of February and now Hernando up in the northeast, here to end the month. You know, we're managing spring over the course of the first half, looking at it as a first-half event. Excited about everything we have locked and loaded.

We have the biggest weeks ahead of us, and for the first half of the year, focused on, you know, delivering at the midpoint of the guide. Bill, you may wanna reference just some underlying strength across categories that are separate from sort of the weather demand that we've seen.

Yeah. Thanks, Brandon. I think, you know, when you look at January and you set the weather aside, you know, we saw strength across, you know, as was called out in our prepared remarks, these pro-related categories, millwork, lumber, building materials, electrical. Then we continued to see strength in paint, garden businesses outside of ice melt, hardware, soft surface flooring, which is carpet, kitchens and bath, rough plumbing. You know, those are all built around the foundation, and, you know, we're gonna leverage those as we go into the first half of the year and continue to drive those.

My follow-up question is as you think about sort of the post-storm and post-tough winter recovery and lawn and landscape and even exterior of homes, we haven't had a winter like this in perhaps a decade. You also have a larger relative, you know, outdoor business relative to your peers. Is there an analog? How are you thinking about the potential pickup in sales in the first half of the year as it relates to the tough winter that we've had? Thanks so much.

Chris, this is Marvin. Look, we're optimistic, and we've tried to build all of that into our guidance. Candidly, we've also tried to take a conservative approach. I think, it's pretty obvious, and I'll state the obvious, that this is a pretty unique environment with unpredictable tariffs, high interest rates, and a consumer demand that is not as sustained as we would like it on the DIY side. We feel really good about our plan for spring. We feel great about our plan for 2026, and part of that is the fact that we have the best in-stock that we've had in my tenure here going into spring. We have the best garden strategy that we've had in my tenure here going into spring.

We have a lot of things working in our favor, not to mention that we have, you know, 30 million and growing members of our MyLowe's Rewards loyalty program that gives us a unique opportunity to message to those members. We are optimistic, but we're also cautiously optimistic just because there's lots of uncertainty out there. But we are very confident that whatever the macro environment provides, we will outperform the macro. We will take share. We took share in the fourth quarter. We took share in the third quarter. We'll take share in 2026.

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 wanted to drill down on the comment that you'll be investing in sales, driving initiatives for the cost-cautious customer in 2026. What could that look like? Are you looking at price investment, promotion, some combination of both? How does that compare to how you managed through that in 2025?

Hey, Kate, this is Marvin. Thank you for the question. Kate, there's really no major change coming to our strategy relative to price or promotion. We manage price on a portfolio basis in this really volatile tariff environment. We'll continue to do that. We will be very specific on what we call Tier 1 promotional events. You know, think the launch of spring, you know, think Labor Day, Memorial Day, Fourth of July. You'll see us leaning hard on some of those time frames, but other than that, we don't plan to be more promotional than any years past.

What I will tell you, and I hand it over to Bill, is that we're really excited about offering the customer value and making sure that the cost-conscious homeowner can look to Lowe's, both in-store and online, to find anything they want at a value and also find anything they want that could be more of a premium item. I'll let Bill talk about some of the things we have in store for spring in 2026.

Yeah, thanks, Marvin. You know, Kate, I think as we look at 2026, it's, you know, largely reflective of what we tried to do in Q4. That was, you know, meet the customer where they want to be met. Both online and in-store, offering these values for both a DIY and a pro customer, be out there, be relevant, with seasonally relevant products, which is very similar to what we've been doing and working on over the last few years. We're excited about what we've got planned in our lawn and garden business. We're excited about the new that we have, the innovation that we have across the store. The merchant teams have done just a really nice job of bringing new, exclusive and innovative values that we can put in front of the consumer.

We've got great brands, we've got great partners with our vendors. You know, we're starting from deep south to north, and we'll take it as the season comes and as spring starts to, you know, come alive. We want to be there and meet the customer where they're at. We'll just have great offers out there, throughout the spring season.

Yeah, Kate, I'll just add, in addition to that, you know, we mentioned the Pro Extended Aisle, and we continue to make the investments. This is a multi-year build-out, and so as we think about that, meaningful growth opportunity is still ahead of us. The investments that we have made, with our transform offerings in our home services business, and so, and continuing to make the investments in the Total Home strategy.

Thank you. Then I just wondered if we could follow up with Brandon, how we should be thinking about the cadence of transaction versus ticket throughout 2026?

Yeah, sure, Kate. I think when we look at 2026 and what's embedded with the guide, similar to the second half of 2025 that we saw, we do expect the growth to be more weighted towards ticket in the first half of 2026, and that's primarily as we, as we wrap the tariff price increases that we've been implementing. As we move into the second half, we do expect to see transaction trends to improve. We're gonna start cycling that over the second half of the year and expect that to move more in line with neutral again as we, as we start looking at the second half of the year.

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

Hi, this is Zach on for Simeon. Thanks for taking our question. What are the strategic priorities for the wholesale distribution business? Can you give us an update on the integration of FBM and ADG with the core Lowe's business? Thanks.

Yeah, well, this is Marvin. I'll take the first part, and then I'll let Brandon jump in. First, what I would say is that we're really excited about the integration activities and the progress that we're making with both FBM and ADG. When you think about the future of acquisitions, we've already made a few tuck-in acquisitions for both FBM and ADG, and we feel as though we'll continue to do that to ensure that we're building out this interior solutions platform that we talked about.

Our objective is to have the ability, when you combine Lowe's, ADG, and FBM, to provide the home builder with virtually everything they need for the interior space of the home. You know, think doors, windows, ceiling systems, insulation, appliances, cabinets, countertops. That is the strategic vision that we're building out for both.

As we think about, you know, future tuck-ins, they will be more than likely in that direction to ensure we're building out that portfolio of companies and products and services so we can serve that larger home builder. I'll let Brandon provide some additional context.

Yeah, sure, Zach. As we put some financials to this, as we look ahead to 2026, I mentioned we're gonna have revenue, we're guiding revenue of about $8 billion combined for ADG and FBM. That does represent organically low single-digit positive growth, solidly accretive to adjusted EPS as we look at 2026. We like what we're seeing on the commercial side with FBM, as we manage through sort of the cyclicality of what we're seeing, some of the near-term pressure we're seeing on the home building side. As Marvin mentioned, we've activated our integration teams.

We continue to work together with both FBM and ADG on our strategies and plans to realize synergies. We're making really nice early progress, specifically, you know, work that we've done with vendors on product costs, looking at SG&A, logistics, back office, and then at the same time, really looking go forward at the cross-selling opportunities that exist across all three of these businesses. Really nice progress. Excited about what's ahead for 2026. We'll continue to manage this and continue to get after it.

That's helpful. Thank you. Then just as a quick follow-up, if we adjust for the mix impact of these acquisitions, can you speak to what you're expecting for the core on core EBIT margin in 2026, both at the low end and the high end of the range, and how that relates to the rule of thumb, if you will? Thank you.

Lowe's (LOW) Q4 2026 Earnings Call Transcript

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