Lowe's Companies (LOW) Earnings Call Transcript & Summary

Okay. Hi, everyone. I'm Simeon Gutman, Morgan Stanley's hardline and food retail analyst. Welcome to day 1 of our Global Consumer and Retail Conference. I'm pleased to be joined by Lowe's, represented by Marvin Ellison, Chairman, President and CEO. First, quick disclosure, and then I'm going to sit down. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

Quick intro, one question, and I'll sit. Lowe's has been one of the best transformation stories in retail over almost a decade, not quite yet from, I would call a triaging operational execution, financial execution to being one of the better operators across all of retail. And now we're watching the beginning of a strategic pivot, slight pivot and watching that in action. So it's been a pleasure to do that. Thank you for being here as the architect, Marvin. First question, looking back at 2025, the housing backdrop has been more stagnant than we and the market anticipated. How has the backdrop compared to your expectations as you came into the year?

Well, first, great to be here this morning. Simeon, I would say, honestly, 2025 has played out basically the way we forecasted it when we were looking forward in 2024. We believe that 2025 from a macro perspective would look a lot like 2024. However, we are a bit surprised that mortgage rates remain as elevated as they are in the second half of the year. But candidly, we forecasted that in our bear case of the macro. So we're not really surprised that we're dealing with a relatively stagnant macro environment. And we basically set our business plan, our perpetual productivity improvement initiatives really based on that hypothesis. Having said that, we look at the overall home improvement consumer, and we think the consumer is healthy. You have record equity, I mean, estimating anywhere between $35 trillion to $36 trillion with $11 trillion being available for HELOCs. You have really good employment for the consumers that shop in our stores. But you still have a degree of consumer sentiment that's a little repressed based on concerns about the macro and candidly, about the overall job market for the future. And so those consumers have, as a result of that, pulled back on discretionary big-ticket spending. And so most of what we're seeing as a headwind from our business perspective is that DIY customer being very cautious on big ticket discretionary. And as a result of that, it's created a bit of headwind. But we're pleased that we delivered positive comps for 2 consecutive quarters, and we're pleased to see that we're taking share in areas like the small to medium Pro category and also in our home services insulation business where we had double-digit comps in the third quarter. So even within this more difficult macro backdrop, our business is performing well, and we feel really good about the short-term and the long-term prospects of the consumer and also our Total Home strategy.

Ever since top line peaked coming out of COVID, the market has been looking forward to the turn of the cycle. And that optimism has held for better part of the last 3 or 4 years. Finally, this year, the irony is that the market itself seems to be giving up a little bit of that hope and being resigned to a flatter home improvement market. Your call was distinct in the space. There was more green shooty optimism from it, my impression. So how do you look at that? And then how do you take that as you head into 2026?

Well, I think for us, we've tried to be very conscious. And the one thing that I will constantly remind the team is we have to accept the current reality, build a strategy around that, but really think about what the market and our business will look like when housing recovers because over the annals of time, you know that this is a cyclical environment. It goes down and it comes up. The question is, at what rate are we going to see the recovery in the housing market in the home improvement segment. And so we'll speak a lot about 2026. in our February earnings call, but just a perspective. So the way we're thinking about it is in the short run, we're going to be very, very focused on providing our DIY consumers with a value. We're going to be really, really focused on creating differentiation in things like our DIY loyalty program where we have 30 million active members. And what's interesting is within that program, those loyalty members shop 50% more and they spend twice as much. And so we look at that, and that gives us a degree of optimism that when we see a full recovery in the DIY, that the rich data that we are gathering from these 30 million-plus members is going to be very informative on how we continue to communicate with them. But also, we spent hundreds of millions of dollars to improve our store environment. And if you walk and enter our stores versus our competition and you look at areas like our kitchen and bath showroom, our appliance showroom, our flooring showroom, our millwork, which is windows and doors, that environment is cleaner, brighter, more refreshed and also from a technology standpoint, a lot more innovative than anyone in the marketplace because we're building a strategy for the future. And it's not a coincidence that we made these investments and we're now seeing double-digit positive comps in home installation when it is in a repressed environment, that means we're taking share in a down market. So the question is, if we're able to take share in a down market, then what will that performance look like when you start to see recovery. And so that's the short-term view. But in the long term, we're thinking about it a couple of ways. Number one, if the -- or when the consumer starts to recover big ticket discretionary spend, then we leverage things like our market delivery network, where we're the only retailer and install an appliance same day and next day in virtually every ZIP code is unmatched across any other retailer. In addition to that, we can take that same delivery network, and we can start to now inject other big and bulky categories like vanities, grills, patio furniture because the network is built and has been transformed. So now how do you leverage it to just push more volume to it. So we see that in the future as the market recovers. And then all of these showrooms, all of the digital investments we've made will now allow us to really percent of that DIY spend when it comes back. So that's one side of it. The second side of it is our small to medium Pro business has consistently grown quarter-over-quarter. And we were very specific and very surgical in saying small and medium Pro is our target segment because of 2 reasons. Number one, we felt like that customer was being ignored in the marketplace by our competitor. And number two, we candidly believe that we have the capabilities with our fulfillment, with our loyalty program and our go-to-market strategy to serve that customer exceptionally well, and that's bared out. But now as we think about what else can happen with single-family construction, multifamily construction housing turnover, which is at its lowest rate since the early 1990s, we know that has to come back. How do we get a piece of that? And so our acquisitions of ADG and FBM now positions us not only can we do the things I just outlined for the DIY and the small to medium customers in our stores and our digital platform, now we have the ability to get a percent of that $250 billion total addressable market in an area that we literally had 0 revenue opportunity at the beginning of this year, and that's single-family and multifamily construction. Now obviously, that segment is under pressure today. But we acquired these companies for the future. And even in the short run, FBM, 55% of their revenue is driven from a commercial space. And so we're seeing things like data center development and construction, medical facilities, residential facilities where we're shifting that focus of FBM into that. And so we've tried to create a strategy that can allow us to grow short term in quite a bit of macro headwind. But when the recovery happens for DIY, we are perfectly positioned. And when the housing recovers, whether remodel, whether renovation, whether new home construction, we now can play in all segments. And so to me, that's the investment thesis for Lowe's long term because we now have a much more diversified portfolio.

If I can put some words back in your mouth, if you let me. The multiple delivery network, big ticket, some of the showrooms, technology, Pro, you mentioned the small to medium Pro. Those are what will allow you to take outsized market share now and into the cycle. your ticket actually starting to outpace the industries. Is that part of the strategy? Or is there some price or it's the mix of product that's helping drive that?

It candidly, it's a combination of both, but it's more category-driven. If you think about categories like appliances, I mean, it is major appliances is obviously a big ticket category. I mean we're continuing to have market share dominance in our performance as recent as the third quarter where appliances was one of our highest performing categories of our entire merchandising portfolio. And that is almost exclusively due to the fact that we have the most space and brands dedicated to it in the store, but our online experience is exceptional as well as this whole market delivery network. I mean we've gone -- if you think about online for a second, I mean, we had over 11% growth in the third quarter. And even as recent as this weekend, the App Store named our app, the #1 selling app in the App Store and the #4 overall app from a consumer rating and performance standpoint. I mean we've gone from that incredible recognition this weekend to when I arrived in 2018, the site crashed on Black Friday. And so you think about the transformation, to your point earlier that we've been through with wonderful leadership and just investments in making sure that we are modernizing our business. And so we think that these investments obviously allow us to perform well in the short run, a really difficult macro environment. But we're building a platform for the future because when the DIY comes back, when the small and medium Pro continues to resonate, I mean, we have built an IT infrastructure that takes friction points out that we think is going to give us a lot of opportunity to your point, we're taking now in a repressed market, but we think we can take share when the market grows, and I couldn't say that to you as recent as 2 years ago. But now I feel like we're in a much better position.

You've mostly undone some prior acquisitions and ventures that Lowe's had been involved with. And then you started to rebuild the muscle, the capabilities through technology and execution. Now you bought a couple of businesses. And we've debated the merits of this for the last couple of years, and we're not sure about it. Can you talk -- can you clarify the market's perception of this new strategy with FBM and ADG, FBM and ADG? What's the vision? What's the synergy potential over time?

Yes. It's a great question. And so to be very transparent, we were not ready to make any acquisition until this year because I felt strongly along with the executive team at Lowe's that we had to create an incredible stable foundation of our core business. I've seen so many companies of you to become distracted with other subsidiaries and other growth initiatives while ignoring the core business, and that's what happened with the previous management team at Lowe's. And so we very conscious that we had to get our core business running really well, and we had to make some incredibly long-term expensive investments in things like IT infrastructure, digital infrastructure, pricing systems, labor management systems, e-commerce, et cetera. These are complex multiyear initiatives that are not easy to do what they were required for us to really modernize our company. And so we felt coming out of 2024 that we had finally created not only a stable foundation, but best-in-class performance in some of these categories. And so over the holiday season, we started to evaluate what would the recovery look like. And we came to the realization that when single-family, multifamily construction started to recover, and if you think about some of the data that says that you're going to need roughly 16 million to 19 million new homes by 2033, we realized that we had no market presence in that total addressable market. And so we're going to be only outside looking in what could be a renaissance in housing just based on supply-demand issues in the U.S. And so we made a decision, and we felt like that our strategy in the store was performing really well for the DIY customer. We talked about loyalty programs. We talked about our private brand strategy. We talked about our portfolio and our digital making great progress with the smart program for the great opportunities for us to grow that. And so we took a step back and said, now we believe that we can have a broader portfolio to serve a customer that's not just the DIY and small to medium Pro. And so we decided to identify potential targets that will give us an opportunity to address this single-family, multifamily construction supply-demand that will have to occur within the next 5 to 10 years. And we think FBM and ADG gives us an incredible opportunity to do that when you combine it with some of the unique capabilities we have at Lowe's, specifically our ability to deliver appliances and also the private brand of STAINMASTER that we -- that is proprietary to us that we can leverage across a single-family home platform that nobody else can. So that was really the emphasis behind it, and we felt like it was a perfect opportunity to make those acquisitions.

So you said the housing -- you said renaissance in housing, I'll say the housing renaissance. To clarify, these businesses, the supply chain, they're totally disconnected from Lowe's. How does that look like? Is this the platform? Do these businesses consolidate over time into one platform and you branch off from there? How do you keep it separate from Lowe's to not harm the DIY or the customer experience?

Well, to your point, the first requirement is our internal version of the Hippo-critical altnet is do no harm to our business or to their business. And so we put together an integration management office so that we can have a very disciplined process to not allow the core management team of Lowe's and functional leaders to get distracted with these acquisitions. And so this integration management office basically creates guardrails and a liaison to make sure that we stay really focused on the key priorities, which for now is getting the EBITDA synergies that we know are available, and we're working to do that, and we're making really progress -- good progress in that area. But to answer your question directly, one of the things that attracted us to FBM is that they have a common IT platform across all of their businesses. So they have a common ERP. ADG is in the process of rolling out an ERP, and we're putting it on the same ERP platform as FBM. And those 2 companies will be on the same ERP platform as our Lowe's Pro supply business. So we will have a common -- what we'll call a common IT platform across FBM, ADG and our Pro supply business at Lowe's, which gives us a unique opportunity to have project visibility across those 3 entities. So over time, the view is to create what we call an interior solutions process for single-family, multifamily and commercial construction. What do I mean by that? I mean that today, FBM provides drywall, insulation, steel framing and ceiling systems. ADG provides floors, countertops, cabinets and Lowe's provides appliances and everything else in the house, including window coverings, fixtures, light fixtures, ceiling fans. And so imagine for a second, single-family construction company or single-family entity or multifamily and have a one-stop shop to provide everything inside of that structure with one invoice. The simplicity of that, the cycle time improvement within that is something that doesn't exist in the marketplace. That's what we're working toward. We're definitely not there yet. We're now just in the early stages of the integration, again, addressing the EBITDA synergies that we have on our road map, and we're making progress in that area. But that is the vision in the future is to create an interior product solution for single-family, multifamily and commercial construction, and that's what we're building towards.

You mentioned the housing market at the bottom, both the new and existing. -- this business could arguably add more cyclicality even though we're at the bottom. Is that a fair statement that you're a more cyclical business because you have this exposure to the segment?

To me, I look at it as the opposite. So as an example, I talked about FBM as an example, being roughly 55% commercial. And so that gives us the opposite of cyclicality. It gives us a little bit of balance because now that single-family construction is under pressure, commercial construction is actually doing really well when you think about categories I listed with data centers. And I mean, we're participating in a multi -- very large high-rise in South Florida that FBM is providing drywall and metal framing. It's one of the largest projects that they have on their books. And again, the data construction revolution is upon us. And I think it's unlike anything we've ever seen before in this country and really around the world. And so we're trying to get as much of the share of that business as we can. So the commercial aspect of FBM and takes away the cyclicality. And also, we think because Lowe's is such a predominant DIY company from a sales penetration in small to medium Pro, it gives us a really balanced portfolio to have a DIY focused, small to medium Pro focus in the store and online. And now we have this separate platform that will allow us to have revenue-driving opportunities in single-family, multifamily and commercial construction that we currently don't have. So we think it's more of a balanced portfolio than adding to the cyclicality of our overall business platform.

How do you see Pro versus DIY shaping up in the medium term? Maybe we overcomplicated looking for signs of life in one of these segments as a precursor to saying, hey, the cycle is coming through. So talk about the drivers and then if anything, you're adapting in either segment.

So we think that Pro will continue to outperform DIY in the short run. And when I say Pro, I'm speaking specifically to our Pro customer, which is the small to medium Pro. And the reason why I emphasize that is because the small to medium Pro is basically a small business owner. And that small business owner has to be incredibly agile. So if their core business is remodel, but the remodel market is down, they have enough agility to shift to repair and maintenance, but they stay busy. So when we highlight the results of our annual quarterly survey on the third quarter and our Pro customers said they're confident about their book of business. They look at their overall project pipeline and they feel really good about it. That is what our customers are saying to us because these customers are agile. They can shift and they can modify their focus based on the needs to keep their crews busy and to continue to keep revenue going. So as we look at that, we think that, that small to medium Pro will, in the short run, outperform DIY. Having said that, we still look at the DIY customer, and that customer remains a bit cautious, as I mentioned. And that is specific to big ticket discretionary. I mean they're still just kind of waiting to see if mortgage rates will go down. They're waiting to understand what the tariff environment will look like. They're waiting to understand the overall job market. So they're kind of on the sidelines. And so that customer is looking for value and they're looking for a reason to transact. And so we owe it to ourselves to give them that. But we feel good about the medium- to long-term outlook for that DIY customer, while we think Pro will continue to perform well within the short and the long run. As I said before, -- we delivered positive comps 2 consecutive quarters. We delivered double-digit comps in our home installation business, we call it the home services business. And what that's telling me is even in a rather depressed market, we are taking share from others. And so one of the questions that someone asked me is that Marvin, when you look at your double-digit comps in your installation business, do you see that as a precursor of the customer returning? Is that a green shoot? And my answer is not entirely. How we see it is that we have dramatically improved capabilities, and we've taken a lot of friction out of this installation process. I mean we've gone from literally binders and whiteboards is what I inherited to what we think is a best-in-class technology platform with great visibility for the project, for the associate, the customer and the installer. In addition to -- while I talked about the improvement in our showrooms and people may say, well, isn't this a digital-driven category? The reality is we have to remember that almost all of these transactions start online. But if you're going to spend $50,000 for a kitchen, you're going to walk into a physical facility, touch it, see it and speak to someone before you make that transaction. So having a showroom environment provides you with differentiation and modernization is really important. And so we think that our ability to drive double-digit comps is almost exclusively driven by the fact that we have a better environment for customers to shop. We have a much improved digital platform. We have a great go-to-market strategy and a credit partnership that provides another degree of differentiation. And so we're taking share in a down market. And again, I'll just repeat what I've said a couple of times. We think that, that is an informative result because what will happen when the market recovers and we maintain these capabilities, we think that our ability to take share in the down market is only expands when we are in a market with a little bit of tailwind, and we think it only bodes well for our future.

Jumping off of demand, maybe a little on productivity and margin. And after that, a little AI. One of the hallmarks of the last -- since 2018 has been the crispness of the execution quarter-on-quarter very favorable sales environment to start and then a tough one in the last 4 years. Can you talk about opportunities to drive productivity expansion? PPI has been a high point of it. What is the potential to unlock further gains in even a subdued environment?

We think it absolutely exists. I mean we're now finalizing the 2026 PPI initiatives that we're going to start to execute, and we'll be talking in February about the I mean I think we talked about a $1 billion commitment in 2025, and we've delivered on it. And we're going to lay out our commitments for '26 in February, and we have amount of confidence to be able to deliver on those. And it's not -- it's for no other reason than the fact that we have created in our Lowe's culture, a culture of operational discipline. It started in the stores because we had the amount of opportunity. And now that whole perpetual productivity improvement philosophy has now expanded into merchandising, global sourcing, supply chain. And now your point about AI. AI will only expand and enhance this philosophy. And so we're very fortunate that we have the philosophy now embedded in our culture. And now with AI and generative AI, we have opportunities to continue to unlock this in a way that we think we can drive sustainable productivity. I mean, one case in point is we have our companion tool, we call it Mylow, which over the weekend was really interesting because with Cyber Monday and all of the online activity, we had an opportunity to just determine how many customers would use this virtual companion tool. And it was interesting of some of the questions that were being asked of Mylow. I mean, things like promotion questions, things like -- and this was really interesting. We had a couple of questions like on Thanksgiving, my stove is not working. It will not heat. What are some of the things I can do, which is I would not want to be that customer. But luckily, we were able to give them some really good advice on things they can do to check, to determine how they can repair. And that's the purpose of Mylow. We basically built it on an OpenAI platform where we take all the training data we have inside of our company relative to product knowledge, and we load it in the system. And so we basically are educating every customer with the same information that an associate would have to train them to work in a certain area. And so the uptick on that over the weekend was really interesting. We're looking at that data. And that's part of what we believe will help to unlock productivity because the most expensive initiative we have on an ongoing basis is training costs. I mean, because in a home improvement environment, you want an associate that can answer a technical question. So it's a lot more difficult than asking what aisle the shampoo was on than a traditional retailer and you have an employee on the sales floor. And so Mylow and our focus on AI and generative AI is giving us the ability to quickly train associates, give them incredible knowledge. And where we roll this out in our stores, we're seeing measurable increase in customer service. And this is customer service from customers who have no idea anything has changed. They're just telling us that the service is much better. And so we think we're on to something.

So you run one of the largest retailers in the world. AI, I don't want to say there's an overhype, but what is your assessment of how impactful it will be? And do you think it has a bigger top line inflational impact in the next 3 years or more from a middle of the P&L impact?

No, it's a great question. And my honest answer is it's too early to make a full assessment. Here's what I'll tell you based on what I believe today. I think for us, and I can speak specifically for the Lowe's environment, I think AI is going to do a couple of things. Number one, I think it's absolutely going to unlock productivity based on some of the examples I gave with how quickly we can train an associate and get them ready to serve a customer. I feel like some of the things we're doing specifically in AI from an AI architect standpoint and the ability to write and approve code, we're seeing -- we're seeing measurable returns on the efficiency in that area. But what we're also determining the -- this is the yet to be answered question is how can the injection of AI free up an associate to do other things to create revenue. So rather than thinking about it solely as a job replacement tool, how do you think about it reducing someone's workload by 50%? And then what do you do with that other 50%? Can we now free a merchant up who's spending 50% of their time building spreadsheets, responding to e-mails, communicating with suppliers. If AI can take that task away, can you now take 50% of that merchant's time and they can focus on sales-driving initiatives. That is yet to be determined, but we think the hypothesis is that, that is something that we believe is viable, and that's what we're trying to understand. We're excited about it. We -- I would say we have some of the best partnerships of any large retailers. You name the tech company, and we have a firm working relationship with them because we're trying to learn and we're trying to be a first mover in a lot of these areas, and we think we have been. And we're going to be on the forefront of this, and we're going to make sure we learn quick and we adopt as quickly as we can as well.

Pricing tariffs, we touched on it a teeny bit in terms of ticket. Do you think the U.S. consumer has seen I would say, the worst, the highest point of inflation collectively. And obviously, your business has a gauge because there's still some tariff residuals coming through late this year, early into next year. So do we really know how the consumer will handle the peak level of inflation when we get there?

Look, it's a fair question. I would say I can speak only for Lowe's. And I would say we've been very transparent from the very beginning. When some competitors were saying things like we're not going to raise prices, we instead said we're going to be price competitive because the math didn't work out in a relevant fashion to make a definitive statement, we're not going to raise prices. And we felt like that when that was put out there that it was something that we didn't feel like it was a plausible or a realistic statement. So for us, we've been really focused on being price competitive, being relevantly promotional. You look at our, you look at areas like Labor Day, 4th of July, Memorial Day, which in home improvement, as you know, our big promotional periods. We year-over-year, were equally as promotional as we have always been because we know that matters to the customer in this environment looking for a value. So I will say for us, we're going to continue to manage this across the portfolio. We have incredibly rich data to understand the price sensitivity and the elasticity of our consumer. We're going to continue to offer a value. We're going to continue to have a really consistent promotional cadence. And we believe that we can continue to manage this in a way that we can limit the price burden or the inflationary burden to our consumers while still giving them a reason to get out the couch to shop in-store, online because we can offer a value based on the cross-functional work that we're currently doing and also the work we're doing with our suppliers to share some of the cost burden.

Two more questions. One on capital allocation and then one, I don't know, more fun one. So you've stated the goal to get leverage back down to, I think, 2, 7.5 over time. You've made the acquisition, so it will take some time to grow out of that. Does that preclude your flexibility in any way? And could any of those capital priorities change in the meantime?

No. I mean look, our capital priorities remain the same, that is invest in the business, continue to pay out a dividend and to buy back shares to return capital to our investors. And so that hasn't changed. Now to your point, we did increase our leverage in order to make these acquisitions, but we've committed that we will get back down to the 2.75x, and we'll try to get that done in 2027. And at that point, we'll start to get back on a more robust share repurchase schedule that we traditionally have been on. We believe that we can use cash flow to make the necessary tuck-ins and smaller acquisitions required for ADG and FBM to continue to really grow and to take market share. And we believe that can be done without going back to increase our leverage. And we think that keeps us on that same time horizon to get back down to the 2.75x again, in that 2027 time period. We don't today see any large acquisition out there that we think that we will go after. We believe that the 2 platforms that we've acquired can be sustained and they can grow and we can continue to take share and get geographic breadth, again, with existing cash flow with a series of tuck-ins. And we think that allows us to stay committed to those 3 capital allocation priorities.

I wish I'd ask you this after the day of meetings. But what do you think the market is still underappreciating or missing with the Lowe's story?

I think for me, when I look at the investment thesis for Lowe's, it comes down to just a couple of basic factors. So short run and long term. So in the short run, in arguably one of the most difficult housing markets we've seen since early 1990s, we've been able to be very consistent in our overall performance from an operational perspective with consistency around our earnings per share performance and our operating profit and being very disciplined and very diligent. But we've also leveraged our balance sheet to make great investments in the business so that we are now taking market share in a down market, and that's allowed us to deliver 2 consecutive quarters of positive comps and average ticket growth because customers are leveraging us for investments in their homes like appliances, kitchen, bath, flooring, et cetera. And so in the short run, we've been able to run in a very effective business in a really difficult market and in a market where the DIY has been under the most pressure that I can ever remember in home improvement. And so we've proven in a really difficult market, in a difficult macro, we can grow sales, we can maintain discipline from a productivity standpoint and a profitability standpoint, and we are making the right investments in the business. And long term, we now position ourselves where we can serve the DIY customer. Again, we are the only home improvement retailer with a DIY loyalty program with over 30 million active members. In addition to that, we're the only home improvement retailer with a product marketplace. And if you look at omnichannel retail across this globe, one of the common denominators of great online growth and sustainable growth is the existence of a marketplace. So we have that in the early stages. And we've made these investments in our store environment. So this home installation business in these showrooms, we have the best store environment and the best digital platform. That's the short run. In the long run, you need 16 million to 19 million new homes by 2033. So single-family, multifamily construction has to come back. And you have this boom in commercial construction areas like data centers. And so not only are we positioned in the short run to manage the DIY with some of the differentiation we have and the small and medium Pro, now we are positioning ourselves to go beyond remodel and renovation in the store, we now can go to a more complex Pro, and we can broaden our portfolio to another $250 billion plus total addressable market, and we can get a piece of this new home construction when it starts because, again, it's just a supply-demand issue. It has to come back. It's not an if, it's a win. And so we're positioned in the short run in the store for the DIY, the small and medium Pro, and we're positioned in the long term with the more complex Pro, single-family, multifamily construction. And we're doing it all with incredible discipline and with a very, very sustained execution in our stores, and we have created investments that we think will pay off in the future. And so I think that's the investment thesis for Lowe's.

Thank you. Appreciate you sharing the story. Good luck in the holiday season and good luck in 2026.

Great. Thank you. Pleasure to be here.