“we expect comp sales to be consistent with our fourth quarter results approximately 300 basis points below the bottom of our full year guide.”

In context

“lback in DIY demand, which intensified in the third quarter of 2023 sets us up for different compares in the first and second half of this year. Given this, we expect first half comp sales to remain under pressure as the current DIY demand trends continue. But as we move into the second half, we expect comp sales to improve as we begin to cycle over the pullback in the third quarter. To be clear, we are not forecasting an improvement in demand trends this year. Rather, the compares are easier in the second half. And while we are planning for a normal spring season, the timing of spring is unpredictable and always brings some variability to our first half performance. Given our customer mix, these DIY drivers disproportionately impact our business. Now more specific to our first quarter, we expect comp sales to be consistent with our fourth quarter results approximately 300 basis points below the bottom of our full year guide. The combination of lower sales volumes as well as cycling a sizable legal settlement is expected to result in a Q1 operating margin rate approximately 200 basis points below the prior year adjusted rate. Before I close, let me remind you of our capital allocation strategy, which remains unchanged. Our first priority is to reinvest in the business with capital expenditures of approximately $2 billion. Next, we continue to target a 35% dividend payout ratio. We also plan to use our free cash flow to repay a $450 million bond maturity and then return excess cash to shareholders through share repurchases. In closing, we are confident in our ability to execute through the near-term market uncertainty and remain focused on realizing the benefits of our total home strategy while continuing t”