Lowe's Companies Inc (LOW)

“We are seeing a pretty immediate impact from the oil prices. It's pressuring fuel, commodity-based products like resin and plastics. Q1 [ net impact ], Simeon, has been pretty manageable. Q2. We are starting to see some of that pressure.”

“This results in first half sales and adjusted diluted earnings per share essentially in line with our expectations from the start of the year.”

“Additionally, we expect adjusted diluted earnings per share in the second quarter to be approximately 2% below prior year adjusted diluted earnings per share.”

“and we expect second quarter adjusted operating margins to be pressured from: the impact of acquisitions, which we will begin to anniversary in the second half of the year; investments in our sales driving actions, which are more focused in the second quarter due to our mix into the spring season and key holidays; and near-term pressure from higher transportation costs that we are actively working to offset through productivity initiatives in the back half of the year.”

“Based on this, we expect second quarter comp sales to be roughly in line with the midpoint of our full year guide,”

“So we're going to continue to drive that, continue to work through that. and that gives us confidence again to our ability to deliver the $1 billion for this year.”

“we plan to take share this quarter, we plan to take share for the back half of the year.”

“And we believe at the beginning of the year that we would see sales growth more so in the back half of the year than in the front part of the year, and that's just based on the cadence of our year-over-year comparisons and based on some of the initiatives and when they're going to be kicking in.”

“I think as we look ahead and cycle some of the noise from tariffs from last year, we're expecting some of that to moderate. That's in our outlook around more moderating average ticket and an acceleration in transactions.”

“I think we look at the first half, it still is largely going to be skewed towards ticket. But as we look at the second half and expectations, we do expect transactions to continue to improve.”

“And we're forecasting that Pro will continue to outperform DIY not only in the second half but for the balance of the year, and we think the Pro Extended Aisle initiative is tied directly to that outcome.”

“We also expect capital expenditures of up to $2.5 billion.”

“We expect adjusted operating margin in a range of 11.6% to 11.8% and full year adjusted diluted earnings per share of approximately $12.25 and to $12.75.”

“We continue to expect sales in the range of $92 billion to $94 billion, with comparable sales in a range of flat to up 2%.”

“We remain on track to complete the national rollout of workwear and pet to all of our stores by the end of the year.”

“It is going to be centered in those repair maintenance categories, but anything we can get with the macro or any consumer engagement on these big-ticket discretionary categories is going to be upside to that.”

“So in terms of spending, we do believe we could still see some benefits in Q2, in particular from higher income consumers, and we've contemplated that in our outlook here for Q2 and the balance of the year.”

“I think when we look at 26 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 26, and that's primarily as we, as we wrap the tariff price increases that we've been implementing.”

“As it 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.”

“Given severe winter storm activity in February, we are now expecting Q1 comp sales to be below the midpoint of our full-year guide.”

“What I will tell you is that we remain confident in our full year guide regarding the top and bottom line.”

“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.”

“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.”

“As we move into the second half, we do expect to see transaction trends to improve.”

“Kate, there's really no major change coming to our strategy relative to price or promotion.”

“we think it will help to drive our Pro business for the balance of this 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 includes the impact from FBM and ADG, which is expected to be accretive to adjusted EPS for the year.”

“These assumptions result in expected full-year diluted earnings per share of $11.75 to $12.25.”

“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.”

“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.”

“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.”

“This includes 30 basis points of dilution related to the wrap of FBM and ADG in 2026.”

“We expect operating margin in a range of 11.2% to 11.4% and adjusted operating margin in a range of 11.6% to 11.8%.”

“We anticipate that ADG and FBM will contribute approximately $8 billion to sales.”

“With that, we are expecting 2026 sales ranging from $92 billion to $94 billion, with comparable sales in a range of flat to up 2%.”

“Given the solid results from these new assortments, we'll be expanding them to the remainder of our stores in 2026.”

“our outlook for 2026 remains cautious given the persistent volatility in housing macro.”

“I think when we look ahead to Q4, a lot of those same drivers are expected lift from Pro appliances. There will be some modest like-for-like inflation.”

“And then the last thing I'll mention, just as we continue to look at tariffs, those ramp here in Q3, we're expecting that also to continue ramping in Q4 and the wrap to affect the first half of the year.”

“we expect capital expenditures of up to $2.5 billion for the year.”

“I think as we look ahead to Q4, a lot of those same drivers are expected lift from pro up appliances. There will be some modest like for like inflation.”

“And we expect capital expenditures of up to $2.5 billion for the year.”

“We also now expect full year adjusted operating margin of approximately 12.1% which includes 20 basis points of dilution from FBM and ADG.”

“By the 2025, we're set to achieve our multiyear goal of reducing our in-store SKU count by 15%.”

“I think as we look ahead into 2026, a few things I would highlight we're continuing to look at FBM and ADG what we think housing and commercial markets are going to be looking like in the business performance there in '26. I mentioned earlier, new home starts both single-family and multifamily remain under pressure, but confident with these businesses that we can gain share in a down market.”

“And I think as we start to look ahead into 2026, we're not anticipating meaningful near-term improvement there.”

“On an annualized basis, we expect FBM and ADG to negatively impact consolidated adjusted operating margin by approximately 50 basis points.”

“The structure of this financing in conjunction with the timing of our existing bond maturities will allow for steady deleverage to our 2.75x target, which is expected by mid-2027.”

“And I think as we start to look ahead into 2026, we're not anticipating meaningful near term improvement there.”

“On an annualized basis, we expect FBM and ADG to negatively impact consolidated adjusted operating margin by approximately 50 basis points.”

“The structure of this financing in conjunction with the timing of our existing bond maturities will allow for steady deleverage to our 2.75 times target, which is expected by mid-2027.”

“We will continue to invest first in growth to support our 35% dividend payout target and return excess capital to shareholders through share repurchases.”

“Intend to maintain our solid investment-grade credit ratings of triple B plus and Baa1.”

“On an annualized basis, we expect ADG to negatively impact consolidated adjusted operating margin by approximately 15 basis points.”

“As it relates to the second part of the question on the long-term targets, right now we're sticking with and on '25 and delivering on those commitments.”

“Again, second half, we always had a bit of a gradual improvement baked in and then we also expect to see momentum and expect to take share in the second half as we scale our total home strategy initiative.”

“We feel good about our promotional strategy as well.... And, again, you could look at that and say it was a great value-oriented environment, and we think that's gonna be more of the same for us. For the back half of the year.”

“And then we continue to expect to see benefits from our total home initiatives, total home strategy as that ramps across the back half of the year and that's both in the pro space and the DIY space.”

“We expect third-quarter comp sales to be approximately 125 basis points above the bottom end of our full-year guide”

“we continue to expect capital expenditures of approximately $2.5 billion as we invest in the business and open new stores.”

“The outlook assumes current consumer and home improvement trends persist and our strategic initiatives continue to drive momentum, especially in pro and online.”

“That over the next two years, twenty-five, twenty-six, we do expect to temporarily pause our share repurchases and we expect that to resume in 2027 once we get back to that leverage target.”

“It's expected to be accretive to adjusted diluted earnings per share in the first full year after closing excluding synergies.”

“Based on the current tariff environment, we feel very comfortable that we'll be able to deliver the financial guidance to brand and update.”

“We think we can do that and still deliver on the financial commitments that Brandon outlined in his prepared comments.”

“Just important to remember, early innings and says we onboard incremental suppliers throughout 2025 in scale. We're going to continue to see this business grow.”

“The actual cost will be flowing through in the second half, but all of our mitigation actions and everything that Marvin and Bill have outlined, we expect to manage and we expect to offset the majority of that.”

“We do expect any incremental impact that we see to be more concentrated in the second half of our year, and that's baked into the expectation.”

“For us, as we look out, we're looking for sustained increase in discretionary projects and DIY traffic for the inflection point. We don't have that necessarily expected or baked into '25. It's sort of expected it's going to be more of the same at this point.”

“We got $500 million roughly in OpEx offsetting there across a number of pressures that we're seeing.”

“As it relates to margin, we're expecting gross margins to hold roughly flat for the full year.”

“And then implied in the second half is roughly a plus 1. We expect to continue to see momentum with our Total Home sales initiatives offsetting hurricane pressure.”

“Taking this into account, we expect second quarter comp sales to be approximately 150 basis points above the bottom end of our full year guide.”

“We continue to expect comp sales in the first half to be roughly flat with approximately $400 million in spring demand shifting into Q2 and where we are cycling particularly poor weather.”

“We also expect capital expenditures of approximately $2.5 billion as we invest in our Total Home strategic priorities and begin to ramp up new store builds.”

“We expect operating margin in a range of 12.3% to 12.4% and full year diluted earnings per share of approximately $12.15 to $12.40.”

“We continue to expect sales ranging from $83.5 billion to $84.5 billion with comparable sales in a range of flat to up 1%.”

“With the program that's easier to use and understand, we're expecting greater utilization, driving repurchases and higher spend.”

“And we're on track to open five to 10 new stores later this year, in line with what we shared at our analyst and investor conference.”

“The transaction is expected to close in Q2, and it's expected to be accretive to diluted earnings per share in the first full fiscal year after closing.”

“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.”

“We are not planning nor have we seen any inflection point change in promotional cadence for DIY, nor are we anticipating doing anything to create any change in our cadence.”

“Yep. I think it's spot on, Greg. We still have that framework in place, 10 on the upside, 15 on the down.”

“As we look at the balance of 2025, commodity inflation is 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.”

“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.”

“We expect that to continue to sort of ramp as we move through the year.”

“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 2025.”

“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.”

“Taking this into account, we expect first-quarter comp sales to be approximately 200 basis points below the bottom end of our full-year guide.”

“In 2025, we plan to open five to ten new stores.”

“Additionally, we expect net interest expense of approximately $1.3 billion as we plan to repay $2.5 billion in debt maturities this year but will also have less interest income due to lower short-term investment rates.”

“This productivity will offset pressure from merit increases and 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 million over prior year as we lean into our tech-driven strategic investments.”

“This should drive greater engagement with our pro customers and incentivize repeat purchases and more trips to Lowe's.”

“We are expecting some level of additional engagement and some acceleration as we move from smaller repairs into some of the larger projects, but really the timing of that and into '25.”

“So, we do see that pressure sort of continuing as we transition from '24 and into '25.”

“We're committed to growing Pro at 2x to market because we think that there's market share, we can continue to gain in the small to medium-sized Pro, we believe is up for grabs and also it's a very fragmented marketplace.”

“We're going to continue to invest in Pro and online, and we're incredibly pleased with what we've seen thus far.”

“Additionally, we expect full year net interest expense of approximately $1.3 billion, capital expenditures of approximately $2 billion and adjusted effective income tax rate of approximately 24.5%.”

“As we look at potential impact, certainly would add product costs, but timing and details remain uncertain at this point.”

“We will continue to invest in the business to drive long-term growth while maintaining a 35% targeted dividend payout ratio and then use the remaining cash flows to fund share repurchases.”

“Yeah. I would say, Scot, we expect our kind of rule of thumb in the algorithm. We expect that, that still holds. And it's directional, and it applies mainly to the fiscal year. We still see plus 10 basis points on the upside for every incremental point of comp and then 15 basis points on the downside.”

“And then credit and shrink, expect those to be roughly flat for the full year, and a great job by the teams managing pressures in those two lines.”

“Transportation cost continues to be a good guy for us as we leverage our scale.”

“The clawback is going to continue to benefit. And it really starts to accelerate in Q3, Q4.”

“And then, I would say, as it relates to your question on August, very much playing out through here the first two-plus weeks very much in line with what we've guided to Q3.”

“And then, we expect to see the transactions as the offset. That's where the pressure is at, and we continue to expect that to be challenged as the homeowners less engaged with home improvement activity in the second half.”

“And we're continuing to manage through the DIY challenges in the big-ticket discretionary, but we are still seeing strength, especially in the small to medium Pro, and that's reflected. Just as a reminder, we're cycling a pretty big DIY pullback, which started in Q3 of last year, again, as it relates to the big-ticket discretionary. So, the breakdown as it relates to comp, we are expecting, just like we've seen here in the first half, roughly flat average ticket in the second half as the Pro growth is offsetting some appliance pricing pressure that we're seeing.”

“Gross margins for the year, as we've said consistently, we expect roughly flat for the full year, and that's what's embedded in the operating margin outlook.”

“We are expecting third and fourth quarter comp sales to be roughly 200 basis points better than our second quarter results, given the easier prior-year compares.”

“We also expect capital expenditures of approximately $2 billion and an adjusted effective income tax rate of approximately 24.5%.”

“Additionally, we expect full year net interest expense of approximately $1.4 billion and to repay a $450 million bond maturity in September.”

“You mentioned we do expect some of these gross margin pressures to start to tail off as we move through the year in PPI to start to accelerate. So we're committed to delivering both the top line and the bottom line in line with our guide.”

“From an absolute standpoint across these categories, we're expecting similar performance as we move through the year, but the comps should improve significantly in these categories just again based on what we're cycling and when we started to see the downturn in the second half of last year.”

“Again, Jonathan, I think just on an absolute dollar performance standpoint, we're expecting more of the same in terms of what we saw second half. We don't have any macro improvement sort of embedded in.”

“we're going to see again, a much more historical relationship between ticket and transaction over the course of the second half of the year.”

“Yes, Greg, this is Brandon. The majority of that's going to be traffic related.”

“So we expect that to smooth out as well.”

“But for sure, as we get into the second half, we're seeing the improved -- the acceleration of PPI flow through with some of the supplier clawback cost out.”

“We expect that average ticket for the full year to continue to be roughly flat, but definitely continuing to work through some of the DIY pressures that we're experiencing.”

“So we also mentioned credit is some first half pressure there related to higher borrowing costs and delinquencies as it relates to our private label credit portfolio, but we expect to be able to manage that roughly flat to the year and then great performance on the shrink side. We continue to expect roughly flat on the year there.”

“there's going to be a bit of a lag defect as the new cost turn through inventory here over the next 3 quarters”

“So as it relates to gross margins, and we look out for the full year, we are still expecting gross margins to be flat.”

“In 2024, we plan to use our free cash flow to repay a $450 million bond maturity and then return the remaining cash to shareholders through share repurchases.”

“We continue to expect second half comp sales to improve as we cycle over easier compares from the DIY pullback that intensified in the third quarter of 2023.”

“First, based on the trends we are seeing in the business, we expect second quarter comparable sales to be roughly in line with the first quarter.”

“We expect operating margin in the range of 12.6% to 12.7% and full year earnings per share of approximately $12 to $12.30.”

“We continue to expect sales ranging from $84 billion to $85 billion and comparable sales in a range of down 2% to down 3% with Pro sales outpacing DIY.”

“We completed over 450 front-end rollouts this year with over 500 planned for 2024.”

“our base case guide assumes no change in macro conditions versus what we've experienced here the last couple of quarters.”

“So we're expecting gross margins for '24 to be roughly flat.”

“as we cycle into the second half of the year, we are expecting a more normal historical relationship between average ticket and transactions.”

“We don't expect any significant improvement off of that second half 2023 run rate.”

“I think the second part of your question, just as we think about ticket into 2024, we are expecting that to hold up, and that's largely what we saw in 2023.”

“If our sales do exceed the top end of our guide, we do expect about 10 basis points for every 1% of incremental comp sales on the high side. And then on the low side, sales fall below the bottom end. We're looking at about 15 basis points of margin contraction for every point of comp decline.”

“we continue to target a 35% dividend payout ratio.”

“Our first priority is to reinvest in the business with capital expenditures of approximately $2 billion.”

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

“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.”

“we aim to grow Pro at 2x the market rate.”

“We expect this to drive traffic and return visits while also enabling us to personalize offers and experiences for our loyalty members, creating a flywheel effect that increases DIY loyalty and demand over time, both in-store and online.”

“even when we start to see some green shoots there, it's going to be -- the trends are going to improve. There is an expected lag before the macro drivers we believe are going to translate into spending.”

“And Seth, this is Brandon. I would just add the adjustments that Bill is talking about that we're making as the consumers changing as we're moving through the year, our go-to-market strategy, all of that's fully embedded and reflected in our updated outlook and confidence that we're able to achieve our flat gross margins for the year.”

“This item has been so popular that we are now doubling our sales expectations.”

“Overall, we built a competitive pro sales and service model, which is creating a flywheel effect that will enable us to grow Pro sales at 2x the pace of the market.”

“We do expect a light or a slight impact from lumber deflation as we transition into Q4. ... We do expect some light pressure from cycling Hurricane Ian.”

“We do expect funding and share repurchases through operating cash flow here in the near term and expect modest if any share repo in Q4 also expect to be in line with our stated leverage target at the end of the year.”

“Finally, we are reconfirming our capital allocation priorities. We will continue to invest in the business to take market share, target a 35% dividend payout ratio and then return excess cash to shareholders through share repurchase, which will be funded in the near term through free cash flow.”

“Additionally, we expect full year interest expense of approximately $1.4 billion, capital expenditures of up to $2 billion and an adjusted effective income tax rate of approximately 25%.”

“With this in mind, we are now forecasting Q4 comp sales to be fairly consistent with Q3 results.”

“In fact, our front-end transformation is well underway, with approximately 450 stores planned by the end of this year.”

“We are on track to complete the initial rollout by the end of the year.”

“Yes. I would say, Steven, still expect 40 to 60 basis points of expansion.”

“So taking all that into account, our outlook assumes more pressure overall on transactions, and we look at ticket and expect that to really hold over the back half of the year.”

“Yes, sure. Simeon, the good news too, when we look more in the short term around the back half of '23, we actually are expecting PPI to get more momentum in the second half than what we saw in the first half.”

“And then we expect continued benefits across the back half of the year from private brand penetration, supplier clawbacks, lower transportation costs and initiatives that we're seeing across the pricing portfolio.”

“So all in, as we look at the full year, we still expect roughly gross margins flat across the year.”

“And then on the flip side, continued growth and momentum from the Pro business as we expect to outpace DIY.”

“And finally, we continue to expect capital expenditures of up to $2 billion this year.”

“And we are reaffirming our outlook for adjusted diluted earnings per share of $13.20 to $13.60.”

“We continue to expect full year adjusted operating margin in a range of 13.4% to 13.6%, with disciplined expense management and ongoing PPI initiatives, partly offsetting the impact of lower sales volumes.”

“Given these difficult comps, we are expecting Q3 sales towards the lower end of our full year guide.”

“This includes a 150 basis point impact from lumber deflation for the full year.”

“We continue to expect 2023 sales in a range of $87 million to $89 billion for the year, representing comparable sales of down 2% to down 4%.”

“These trends are consistent with our expectations and reinforced our outlook for our relevant market to be down mid-single digits in the second half of the year with our sales continuing to outpace the market by 100 to 200 basis points.”

“confident in what we're seeing. And it gives us confidence when we look at the broader market and our ability to grow 100 to 200 basis points above the market and growing Pro 2x when we look at 2023 and beyond.”

“And we remain on schedule to have market delivery rolled out by the end of 2023.”

“we expect the average ticket number to hold up.”

“we're not anticipating any meaningful deflationary pressure as we move through the year.”

“that's where we're going to see the bulk of the leverage, 40 to 60 basis points reflected in the new guide.”

“Simeon, largely the same, roughly flat is what we've spoken to as it relates to gross margin over the course of the year.”

“when we look at the second half, we're looking at that in line with the full year guide.”

“The lumber inflation is -- or deflation is going to moderate as we start to look at second half and we cycle over more normal pricing over the balance of the year”

“Taking all of this into account, we are expecting Q2 sales towards the higher end of our full year guide.”

“with our planned share repurchases, we expect to reach our 2.75x leverage target by the end of the year while maintaining our BBB+ credit rating.”

“We expect capital expenditures of up to $2 billion this year”

“We continue to expect Pro to outpace DIY for the year as Pro backlogs are healthy, and demand for Pro services remain strong.”

“This creates an incremental 50 basis points of pressure on full year sales as compared to our original expectations.”

“we are now expecting our relevant market, which reflects our 75% DIY, 25% Pro mix to be down mid-single digits this year.”

“we are already seeing better-than-expected adoption rate and sales growth and expect results to accelerate as more Pros discover the new features.”

“we now expect that these stores will be a key component of our operating profit growth over the next 3 to 5 years.”

“Yes. And Michael, I'll just add that the weak scenario that we called out still very much sort of off the table for us. I think we called out at that point, it would require significant economic shock, and we don't see that playing out.”

“And so although it's ratable, we're very confident in our ability to deliver upon that in a variety of macro scenarios.”

“Yes. Second half, Greg, very much in line.”

“But again, as we turn and look at '23, that pressure largely absorbed in 2022. We feel like we got great efforts within the team and the organization in terms of what we're doing to protect against shrink, and I'll maybe let Joe call that out.”

“Yes. Got it, Michael. So -- yes, drag in Q4 mainly given the interest rate environment that we're seeing. But as we turn into 2023, again, a number of puts and takes, but we feel like the bulk of that for the most part has been absorbed, and we have that factored into '23.”

“As it relates to promotional activity, we want to continue to offer the customers value, but we're not adding new promotions for 2023.”

“As you mentioned, the gross margin we are expecting that to be roughly flat in '23.”

“But again, right now, we're expecting and have considered at the midpoint of our guide, just more normalized pricing and a slight rebound in units in the next year.”

“Yes, Brian, I'll take that and, again, kind of connect it to the guide. So our guide at the midpoint for lumber, in particular, assumes a normalized pricing environment, certainly considered to what we've seen for the last [ 30 ] years.”

“And we're looking back half of the year and then into 2024 a more traditional balance between ticket and transaction.”

“We're expecting that inflation to continue to slow, and we're seeing minimal activity in terms of new pipeline requests coming in from our supplier base.”

“So as we look at '23, we are expecting a modest inflation lift across the portfolio. Most of that is going to be wrap of inflation that we're seeing in 2022 lapping into 2023.”

“For 2023, we are expecting to invest $350 million in incremental wages for our frontline associates, which includes the 2023 portion of the $170 million permanent wage investment that went into effect in December.”

“We are expecting operating margin in the range of 13.6% to 13.8% as we continue to drive productivity through our PPI initiatives across the organization in part to offset our planned wage investments.”

“Pro sales growth is expected to exceed DIY again in 2023 as we expect to continue to outpace the broader Pro market growth by 2x.”

“We are also really excited to announce that Lowe's will offer the widest selection of client products anywhere in the home improvement retail channel, which will be available in the second half of 2023.”

“We'll have our investor conference next month, and I can just give you a little bit of a precursor. That's what the number is going to be for next year.”

“in reference to Q4, we do expect the inventory to build over Q4 with early ordering, I think for springs consistent compared to pre-pandemic levels.”

“I think in 2023 will be a transformative year for us from an IT system standpoint and the ease of what we're doing.”

“for Q4, that's the forecast is that the inflation is going to continue to lift our ticket, which is going to be the primary driver of our comp and it's going to be offset by transactions being down in Q4.”

“I would say that the short answer is, yes, there are elements of the supply chain that definitely will give us some cost advantages next year.”

“the Pro comp momentum is expected to continue and the DIY trends that Bill mentioned are expected to continue through Q4.”

“we have no expectation to go above our current capital allocation dollar amount of roughly $2 billion per year.”

“We expect capital expenditures of up to $2 billion this year.”

“Given our disciplined focus on expense management, we now expect adjusted operating margin of approximately 13% for the full year.”

“We continue to expect gross margin rate to be up slightly as compared to the prior year.”

“And so we have proven that we have levers that we can pull so that we can ensure that as revenue goes down, then we can, at the same point, bring our rate of expense down. And that's something that we feel very confident in our ability to deliver upon.”

“We're very focused on delivering what the most likely scenario that we have with the business, which is updated in our outlook. So we're looking at top line being down 1%. We're really confident given the ability to manage gross margin, the step-up that we're seeing with SG&A leverage and how that's translating to profit expansion and EPS.”

“We're not going to experience the seasonality of the business in the second half of the year, and we're not going to experience that unprecedented overlap in those 2 highly seasonal discretionary categories.”

“On operating margin, I mean, we said consistently that 12% was not a plateau. It was a baseline. Now we're going to say the same thing about 13%. We think when we hit that plateau, it's just going to be another baseline that we can continue to grow from.”

“Finally, we are affirming our outlook of return on invested capital above 36% for the year.”

“And we think as we get into the back half of the year with our new Pro loyalty program, with improved job-like quantity in stocks with some of the brands that Bill outlined that we're going to see this momentum continue.”

“And as raw materials down, we're positioned and prepared to renegotiate prices with our suppliers.”

“So, yes, Chris, I would say, just given rate tightening that we're seeing from the Fed, monitoring the commodity markets, we're definitely expecting some normalization as we move across the second half and into next year.”

“Eric, this is Marvin. Short answer is no plans to change any of our philosophical approach to promotions and pricing.”

“Shrink credit, fairly neutral as we look across the second half as it relates to other contributors to margin.”

“We expect modest product margin improvement, as you mentioned, offset by higher supply chain costs.”

“For 2022, we continue to expect approximately $2 billion in capital expenditures and $12 billion in share repurchases.”

“We continue to expect gross margin rate to be up slightly as compared to the prior year.”

“We continue to expect Pro to outperform DIY for the remainder of the year.”

“In fact, as we continue rolling out Project Simple, we expect that it will eliminate over 80 nonproductive hours per store per week in the second half.”

“After 2 years of outsized growth in home-related sales, we plan for sales to slow in certain categories this year.”

“Not only did PPI support our first half operating margin improvement, it will also help to drive operating leverage for the balance of the year and for the next several years.”

“it gives us a lot of confidence that our Pro growth is sustainable.”

“we have a very good line of sight to getting us to that 13% and beyond just based on executing our Total Home strategy, focusing on Pro, online and all the work that Bill's team is doing on private brands and how we're continuing to grow that business.”

“Finally, we are affirming our outlook of return on invested capital above 36% for the year.”

“Pro is absolutely going to be expected to outpace DIY, grow 2x that of market, which will translate to our guide of down 1% to up 1%.”

“So net-net, mid to high single-digit positive ticket expected over the balance of the year, offset by down transactions is the formula that will get us to the flat comp, and we expect that dynamic to narrow ticket and transactions as we move through the balance of the year.”

“We do believe Q1 will be our low watermark on transactions for 2022 and that, that transaction decrease should moderate as we cycle through the balance of the year.”

“we're just anticipating that, that's going to give us some headwind in Q2.”

“the supply chain, inclusive of market delivery build-out, higher transportation costs are going to be a slight drag, which is consistent with what we've guided and what we've messaged.”

“we have some other variables, such as shrink in credit. We expect that to largely be neutral over the back half.”

“Brian, that's correct. It's fair to assume that the $350 million would shift in fall of Q2.”

“In 2022, we still expect capital expenditures of approximately $2 billion, and we remain committed to our disciplined capital allocation strategy with approximately $12 billion in share repurchases this year while also supporting our 35% target dividend payout ratio.”

“We are also confirming our outlook for diluted earnings per share in a range of $13.10 to $13.60.”

“We also continue to expect operating margin in the range of 12.8% to 13% for the full year, driven by a slightly higher gross margin rate and continued execution of our PPI initiatives.”

“We continue to expect gross margin rate for the full year to be up slightly as compared to prior year.”

“We continue to expect 2022 sales in a range of $97 billion to $99 billion for the year, representing comparable sales of down 1% to up 1%.”

“improving our fulfillment capabilities will allow us to accelerate this growth and continue to gain market share.”

“we expect to build on this momentum with the Pros as we launch enhanced features to the loyalty program in the coming months.”

“These enhanced capabilities will allow us to continue to take market share while expanding our operating margin.”

“We're on track to convert our full portfolio of stores to market delivery by the end of 2023.”

“Do we think we'll continue to take market share in 2022? As Dave said earlier, we absolutely believe we will. And we think we'll take it across Pro and on -- and DIY, both in-store and online.”

“So we have a -- we feel like our plan for 2022, we have a very good line of sight to performance being driven out of those 2 programs.”

“And we are also confident that we will continue to drive productivity in our operations through our perpetual productivity improvement or PPI initiatives.”

“Eric, I think they're going to be fairly consistent. Our plan is fairly consistent in '22 versus '21.”

“Our shrink and credit programs, think about that was largely neutral to our performance versus '22 versus '21. And then we'll have a little bit of headwind as we think about both rates and supply chain and our continued build out in the supply chain ecosystem.”

“Secondly, we are seeing higher levels of commodity inflation than what we planned back in December, largely in lumber. So that is ticking our sales progression up slightly in the first half of the year.”

“And so Pro is going to be a significant part of our growth this year, and we still feel very encouraged by the progress.”

“As we think about next year, if you look at our guide of down 1 to up 1, we would expect units to be modestly down and our average ticket offsetting that almost dollar for dollar.”

“We now expect gross margin rate in 2022 to be up slightly as compared to the prior year.”

“We continue to expect Pro to outpace DIY in 2022.”

“While these 2 initiatives are just a few of the PPI deliverables planned for this year, we expect that these 2 initiatives alone will drive $100 million in productivity this year.”

“Heading into spring, we anticipate being even better positioned than last year from a hiring perspective.”