Lowe's Companies Inc. Goldman Sachs Global Consumer and Retail Conference

No, Casey, it's a good question. I would say for us, we really expect the second half of the year to look a lot like the first half of the year. Again, that's not based on our view that things will get better or things will get worse. We just believe that the year is going to look a lot similar, both front and second half. Having said that, we still believe that we can grow in any macro environment. I'm really pleased by the fact that in spite of the fact that over 60%, 60%, of our sales is driven by the DIY consumer, we've delivered five consecutive quarters of positive comps. In addition to that, we've seen really strong growth in our digital channels. For two consecutive quarters, we've had growth over 15%.

Even in what you could debate and argue is one of the toughest housing macros we have seen in a very long time, we are finding ways to grow, we are finding ways to take share, but we think the broader macro is going to look similar front and second half, but we think we can grow irrespective of that.

Yeah. Specifically to that point, we are seeing homeowners take what we will call smaller, more deliberate projects versus these larger discretionary projects. Let me take a step back and provide some context to that. If you take a look at our consumer, meaning the Lowe's consumer, it is a homeowner with an average household income north of $100,000 a year, average equity of roughly $400,000 of personal disposable income growth, wage growth, and someone who has a really good personal balance sheet. The caveat to that is that consumer is a bit cautious based on all the things you talked about, elevated interest rates and also some of the geopolitical uncertainty that they are seeing that is causing them to just be cautious relative to discretionary larger ticket spend. One of the largest discretionary tickets you can spend is a kitchen renovation, to your point.

Because we have done a really nice job in our Total Home strategy of making capital investments in our physical infrastructure in our stores, meaning kitchen showrooms, bath showrooms, appliance showrooms, flooring showrooms. We are able to get that customer to come in to buy countertops and cabinets, but on certain occasions, we are also seeing the customers come in and do kitchen renovations, but not on the same degree that we had seen in past before this really difficult housing cycle. But we are really, really optimistic that our pro customers are incredibly resilient and our core pro customer in the store is a small to medium pro, and because they are resilient, they are finding ways to keep their book of business open, and if they cannot do a full kitchen, then they will do countertops. If they cannot do a full kitchen, then they will do cabinets.

We are seeing a resilient consumer, we are seeing a resilient customer. Overall, we feel like that we can manage in any environment.

Yeah. I will go back again to our Total Home strategy, which for us is not only a business strategy but an investment thesis on how we run our business. We are investing in the small to medium pro. We are investing in our digital channels. We are investing in loyalty. We are investing in key categories like appliances. As we look at the broader total addressable market for home improvement, there is a large belief that we operate in a duopoly. But as you know, this is a really large total addressable market. If you look at our view of it is roughly $1 trillion. If you combine Lowe's and our largest competitor, we are roughly a quarter of the total addressable market. When we think about competitors, it is more than just one company, it is a broader spectrum. Many of those competitors are small regional players.

As we think about where we have been able to take share, we have been able to take share in categories like appliances. We remain the only Retailer in the U.S. that can deliver and install a major appliance same day and next day in virtually every zip code in the U.S. No one else can do that, and that is the result of a very deliberate action to build a big and bulky fulfillment network that does not exist anywhere in the marketplace. Because of that, we have the ability to really grow share in a really important category for us. Specifically, if you think about appliances, the number one area of appliances that is growing is what we call the duress category. In other words, if your refrigerator breaks, it needs to be replaced.

We are in a position that when a customer has an emergency need, our fulfillment network gives us a great opportunity to take share because we can deliver same day and next day. When you are a smaller player in the space, you don't have the ability to invest capital in a network like we did. We're incredibly blessed to have a strong balance sheet. We're incredibly blessed to have a disciplined approach to how we're thinking about the business, not just quarter by quarter, but we're thinking about what we will look like when the housing recovery happens because it will have to recover. Right now, in many estimations, we're at 1 million homes short of current demand. There's credible data that shows by the next decade, you're going to need as many as 14 million new homes.

We know that this market is going to recover. It may recover gradually, but we have built a strategy that we can compete aggressively real time, but we also believe we've built a strategy that when the market recovers, we're going to be in a great position to grow disproportionately.