What changed in this filing

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Item 1. Business

2024-03-25 compared with 2023-03-27 · 96 added, 94 removed, 130 unchanged (59% of the section changed)

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and subsidiaries (the Company or Lowe’s) is a Fortune ® 50 company and the world’s second largest home improvement retailer.

As of February 3, 2023, Lowe’s operated 1,738 home improvement stores in the United States, representing approximately 195 million square feet of retail selling space.

On February 3, 2023, Lowe’s completed the sale of its Canadian retail business, which operated 232 stores in Canada, as well as serviced 210 dealer-owned stores.

The Canadian retail business included a number of complementary formats under the banners of RONA, Lowe’s Canada, Réno-Dépôt, and Dick’s Lumber.

See Note 7 of the Notes to Consolidated Financial Statements included in Item 8 , “Financial Statements and Supplementary Data”, of this Annual Report for information on this divestiture.

As of February 2, 2024, Lowe’s operated 1,746 home improvement stores and outlets in the United States, representing approximately 195 million square feet of retail selling space.

Lowe’s was founded in 1921 with the opening of its first hardware store in North Wilkesboro, North Carolina.

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Lowe’s is an omnichannel retailer whose core priorities are to provide an excellent customer experience, create a great place to work for our associates, and improve our communities, which we believe will create long-term, sustainable value for our shareholders.

In 2020, we implemented our Total Home strategy, which reflects our commitment to provide a full complement of products and services for professional customers (Pro customers) and consumers alike, enabling a Total Home solution for every project across the home.

In fiscal 2020, we implemented our Total Home strategy, which reflects our commitment to provide a full complement of products and services for professional customers (Pro customers) and consumers alike, enabling a Total Home solution for every project across the home.

Our Total Home strategy has the following five pillars:

online business

We continue to transform our Pro offerings to drive Pro penetration by expanding our Pro brands and product assortments, resetting the footprint of our stores to better serve Pro customers, and introducing our new MVPs Pro Rewards & Partnership Program TM this year, which further enhances our relationship with our Pro customers.

We continue to transform our Pro offerings to drive Pro penetration by expanding our Pro brands, tailoring our product assortments to local building codes and preferences, and increasing loyalty through our MVPs Pro Rewards & Partnership Program TM , which further enhances our relationship with our Pro customers.

We are investing in our omnichannel retail capabilities to expand our online business.

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tradespeople, repair and remodelers, and property managers.

market is our predominant market, accounting for approximately 95% of consolidated sales for the fiscal year ended February 3, 2023.

As of February 3, 2023, we completed the sale of our Canadian retail business and no longer operate in the Canada market, which accounted for approximately 5% of consolidated sales for the fiscal year ended February 3, 2023.

There are many variables that affect consumer demand for the home improvement products and services Lowe’s offers.

There are many variables that affect consumer demand for the home improvement products and services we offer.

Key indicators we monitor include home price appreciation, age of the housing stock, real disposable personal income, and housing turnover.

We also monitor demographic and societal trends that shape home improvement industry growth, notably strong millennial household formation, consumer mobility, and the widespread adoption of remote work.

We also monitor demographic and societal trends that shape home improvement industry growth, notably strong millennial household formation, and the persistence of remote work.

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Our Competition

The home improvement industry includes a broad competitive landscape that continues to evolve.

Lowe’s competes with national and regional home improvement warehouse chains and lumber yards in most of the markets we serve.

We also compete with traditional hardware, plumbing, electrical, home supply retailers, paint stores, lumber yards and garden centers, as well as maintenance and repair organizations.

In addition, we compete with general merchandise retailers, home goods specialty stores, warehouse clubs, online retailers, other specialty retailers, providers of equipment and tool rental, service providers that install home improvement products, and wholesalers that provide home-related products and services to homeowners, renters, business, and the government.

Location of stores, product assortment, product pricing, and customer service continue to be key competitive factors in our industry, while the evolution of technology and customer expectations also underscores the importance of omnichannel capabilities as a competitive factor.

We compete with national and regional home improvement warehouse chains and lumber yards in most of the markets we serve.

We also compete with traditional hardware, plumbing, electrical, and home supply retailers, as well as paint stores, lumber yards, garden centers, and maintenance and repair organizations.

Location of stores, product assortment, product pricing, and customer service continue to be key competitive factors in our industry, while the evolution of technology, including artificial intelligence and machine learning technologies, expansion of fulfillment capabilities, and customer expectations also underscore the importance of omnichannel capabilities as a competitive factor.

To ensure ongoing competitiveness, Lowe’s focuses on delivering the right home improvement products, with the best service and value, across every channel and community we serve.

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In addition, flexible fulfillment options are available for in-store purchases and those made through the contact center.

Regardless of the channels through which customers choose to engage with us, we strive to provide them with a seamless experience across channels and an endless aisle of products, enabled by our flexible fulfillment capabilities.

Regardless of the channels through which customers choose to engage with us, we strive to provide them with a seamless experience across channels and an extended aisle of products, enabled by our flexible fulfillment capabilities.

Our ability to sell products in-store, online, on-site, or through our contact centers speaks to our leverage of our existing infrastructure with the omnichannel capabilities we continue to introduce.

Our 1,738 Lowe’s-branded home improvement stores in the United States are generally open seven days per week and average approximately 112,000 square feet of retail selling space, plus approximately 32,000 square feet of outdoor garden center selling space.

Our home improvement stores offer similar products and services, with certain variations based on localization, along with a dedicated team of knowledgeable and friendly front-line associates available to assist our customers.

We continue to develop and implement productivity tools to enhance the efficiency of our sales associates and to integrate our order management and fulfillment processes.

Our 1,746 Lowe’s-branded home improvement stores and outlet stores are generally open seven days per week and average approximately 112,000 square feet of retail selling space, plus approximately 32,000 square feet of outdoor garden center selling space.

We continue to develop and implement productivity tools to enhance the efficiency of our sales associates and to integrate our order management, inventory management, and fulfillment processes.

Our home improvement stores have Wi-Fi capabilities that provide customers with Internet access, making information available quickly to further simplify the shopping experience.

Our Lowe’s Outlet stores have a smaller format and offer value to our customers through incremental savings on big and bulky scratch and dent items.

Through our websites and mobile applications, we seek to empower consumers by providing a 24/7 shopping experience, product information, customer ratings and reviews, buying guides, how-to videos, and other information.

These tools help consumers make more informed purchasing decisions and give them increased confidence to undertake home improvement projects.

We enable customers to choose from a variety of fulfillment options, including buying online and picking up in-store, curbside pick-up, truck delivery, and parcel shipment to their homes or businesses.

We also offer new virtual design services for paints, blinds, and flooring for our customers.

We enable customers to choose from a variety of fulfillment options, including buying online and picking up in-store, curbside pick-up, same-day delivery through our gig network, and shipment to their homes or businesses.

Further, we also offer digital inspiration, design, and project management tools across our destination home improvement categories.

We have on-site specialists available for retail and Pro customers to assist them in selecting products and services for their projects.

Our Pro sales managers meet with Pro customers at their place of business or on a job site and leverage nearby stores and our distribution network to ensure we meet customer needs for products and resources.

In addition, our In-Home Sales program is available in the majority of our stores to discuss various exterior projects such as windows, doors, roofing, siding, and deck projects, whose characteristics lend themselves to an in-home consultative sales approach.

In addition, our In-Home Sales program is available in the majority of our stores to discuss various exterior projects such as windows, doors, and fencing, whose characteristics lend themselves to an in-home consultative sales approach.

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Contact Centers

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We offer home improvement products in the following categories:

Appliances, Seasonal & Outdoor Living, Lawn & Garden, Lumber, Kitchens & Bath, Tools, Paint, Millwork, Hardware, Flooring, Rough Plumbing, Building Materials, Décor, and Electrical.

A typical Lowe’s-branded home improvement store stocks approximately 40,000 items, with over two million additional items available through our online selling channels.

Our product assortments offered in-store are tailored to meet the needs of the local market.

Appliances, Seasonal & Outdoor Living, Lumber, Lawn & Garden, Kitchens & Bath, Hardware, Building Materials, Millwork, Paint, Rough Plumbing, Tools, Electrical, Flooring, and Décor.

A typical Lowe’s-branded home improvement store stocks approximately 40,000 items, with additional items available through our online selling channels.

Our product assortments offered in-store strive to meet the needs of the local market.

See Note 1 6 of the Notes to Consolidated Financial Statements included in Item 8 , “Financial Statements and Supplementary Data”, of this Annual Report for historical revenues by product category for each of the last three fiscal years.

We are committed to offering a wide selection of national brand-name merchandise complemented by our selection of high-value private brands.

In fiscal 2022, we extended our STAINMASTER ® brand to include additional flooring categories outside of carpet like laminate, vinyl, and tile.

At the end of the fiscal year, we introduced STAINMASTER ® paint as our first private paint brand.

In addition, we are dedicated to ensuring the products we sell are sourced in a socially responsible, efficient, and cost-effective manner.

In fiscal 2023, Klein Tools ® returned to Lowe’s, expanding our hand tools, storage, safety, and electrical product offerings both in-store and online.

This addition, along with other recognized national brands added to our assortment during the fiscal year, position us to better serve our customers with the products they need.

In addition, we are dedicated to selling products sourced in a socially responsible, efficient, and cost-effective manner.

We source our products from vendors worldwide and believe that alternative and competitive suppliers are available for virtually all of our products.

Whenever possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.

To efficiently serve our stores and meet our customers’ expectations for fast fulfillment and delivery, we own and operate more than 100 supply chain facilities in our network.

These facilities include regional distribution centers (RDCs), flatbed distribution centers (FDCs), import distribution centers (IDCs), bulk distribution centers (BDCs), and cross-dock terminals (XDTs).

We also operate standalone fulfillment centers, which along with many of our stores, ship product directly to our customers.

In addition, we are establishing a Pro fulfillment network across the country which will leverage a combination of our existing supply chain as well as new facilities, including our first Pro fulfillment center that opened this year.

To efficiently replenish our stores and meet our customers’ expectations for fast fulfillment and delivery, we own and operate more than 120 supply chain facilities in our network.

Fulfillment centers, which along with many of our stores, ship product directly to our customers.

In addition, we are establishing a Pro fulfillment network which will leverage a combination of our existing supply chain as well as new facilities.

Each one of these distribution nodes plays a critical role in our Total Home strategy and collectively enable our products to get to their destination as efficiently as possible.

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As part of the continued rollout of our market-based delivery model, we expanded to additional geographic areas and enhanced our distribution capacity for big and bulky product.

To date, we have 11 geographic areas converted to our market-based delivery model.

As of fiscal year 2023, we have 16 geographic areas converted to our market-based delivery model.

We have also been focused on improving the speed of our delivery capabilities for our customers.

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We are building an omnichannel supply chain that operates with greater network capacity, better flow management and optimization.

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Installed Sales

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Seasonality and Working Capital

The retail business in general is subject to seasonal influences, and our business is, to some extent, seasonal.

The home improvement business in general is subject to seasonal influences, particularly related to the spring selling season.

Historically, we have realized the highest volume of sales during our second fiscal quarter (May, June, and July) and the lowest volume of sales during our fourth fiscal quarter (November, December, and January).

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At Lowe’s we are committed to creating valuable career opportunities for our associates, supporting them and the communities where they live, and cultivating a culture that invites and encourages diverse opinions and ideas.

We are focused on ensuring our associates see Lowe’s as a “Home to Possibility” with good jobs, a sense of belonging, and a promising future.

As a testament to our commitments, in 2022 we received more than 15 notable employer of choice awards including being named:

a Disability:IN National Best Place to Work for Disability Inclusion, a Forbes America’s Best Large Employers, a Best of the Best 2022 Top Employer by Black EOE Journal, HISPANIC Network Magazine, and Professional Woman’s Magazine, and a Best Corporation for Veteran’s Business Enterprises of the Year.

We would like our associates to see Lowe’s as a “Home to Possibility” with good jobs, a sense of belonging, and a promising future.

As a testament to our commitments, in fiscal 2023 we received more than 15 notable employer of choice awards including being named on the Disability:IN National Best Places to Work for Disability Inclusion, Fortune’s World’s Most Admired Companies Specialty Retailer, DiversityInc.’s Top 50 Noteworthy Companies, 2023 American Opportunity Index, and a Best Corporation for Veteran’s Business Enterprises of the Year.

We were also awarded the Center for Workforce Inclusion 2023 Workforce Equity Award.

As of February 2, 2024, Lowe’s employed approximately 168,000 full-time associates and 116,000 part-time associates, primarily in the United States and India.

During the spring season, we temporarily expand our workforce by hiring associates in part-time and full-time positions to meet the elevated levels of demand.

At Lowe’s, we continue to listen carefully to our associates, most notably through our annual engagement survey.

In 2022, more than 90% of our associates participated in our survey and that data is used to improve our associate experience.

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At Lowe’s, we have a proactive associate listening strategy, most notably through our annual engagement survey.

In fiscal 2023, more than 90% of our associates participated in our survey and our people leaders use the feedback to improve our associate experience.

Creating Good Jobs

We have a strong track record of investing in our workforce by offering locally competitive salaries and wages.

Since 2018, we have invested more than $3 billion in incremental wages and share-based compensation for our front-line associates, which included creating many new roles for our associates to grow into, inclusive of 1,600 new assistant manager positions and 10,000 department supervisor positions.

This fiscal year, we implemented $170 million in annual wage increases, effective December 2022, in addition to the profit-sharing and discretionary bonuses we awarded throughout the year.

In addition, we offer an array of health, welfare, and financial benefits to our full-time and part-time associates, including health care and insurance benefits, retirement plans, an employee stock purchase plan, paid time off, and leave programs, among many others.

These investments include incremental wages and share-based compensation for our frontline associates, which included creating many new roles for our associates to grow into as they advance along their career path.

We offer an array of health, welfare, and financial benefits to our full-time and part-time associates, including health care and insurance benefits, retirement plans, an employee stock purchase plan, paid time off, and leave programs, among many others.

We have implemented workforce management tools that enable us to offer various scheduling options to our full-time associates to foster an improved experience in balancing their work and life responsibilities.

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The implementation of improved technology in the hiring process has simplified the experience for those looking to join Lowe’s and helped to drive the experience overall.

In 2023, we added Spanish language capabilities to promote bilingual hiring by guiding candidates through the full application process in Spanish.

Once hired, associates now experience an improved onboarding to help them quickly learn the knowledge and skills required to be successful in their new roles.

This onboarding includes assigning dedicated mentors to help new hires through the learning process.

Providing a safe environment for both working and shopping is our highest priority at Lowe’s.

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Sense of Belonging

We believe that, by building diverse and inclusive teams, we drive better ideas, positive business results, and improve service through a deeper connection with our customers.

We believe that by building diverse and inclusive teams with a range of perspectives, backgrounds, and experiences, and equal opportunity for all, we drive better ideas, positive business results, and improve service through a deeper connection with the diverse communities we serve.

We continue to execute on our multi-year program to integrate diversity and inclusion initiatives into our corporate strategy across three areas:

talent, culture, and business.

We continue to strive to attract diverse talent for leadership positions across our company.

In 2022, we held our tenth annual Women’s Leadership Summit, focused on developing women leaders across our corporate and field locations.

In our efforts to foster an inclusive culture, we have eight business resource groups that are sponsored by our executive team.

We also strive to attract diverse talent for leadership positions across our company.

In 2023, we held our eleventh annual Women’s Leadership Summit, focused on developing women leaders across our corporate and field locations.

In our efforts to foster an inclusive culture, we have eight business resource groups that are sponsored by members of our officer team.

These groups provide our associates with opportunities to collaborate, network, and learn together, and offer additional spaces where associates feel heard and can engage with other colleagues across the organization.

We also recognize the importance of strengthening our bonds with the diverse communities we serve.

We are one of the founding partners of the OneTen coalition, which committed to hiring one million Black Americans in the next ten years.

Promising Future

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We offer a variety of role-specific leadership and development programs that build and reinforce functional-technical/professional skills, business acumen, and leadership skills to prepare high-performing leaders for their next role.

Our focus on leadership development enables us to grow talent internally and has resulted in more than 80% of leadership positions being filled internally in the last year.

Additionally, nearly 90% of our store leaders have advanced to their current positions from hourly roles.

This year we expanded Lowe's University offerings to include the District Manager and Store Manager immersive week-long leadership experience programs, delivered from the Lowe’s University training center;

the virtual-delivered store department supervisor fundamentals series;

the virtual-delivered field supply chain leadership director, manager, and supervisor experience programs;

Our focus on leadership development enables us to grow talent internally and has resulted in more than 80% of store leadership positions being filled internally in the last year.

Our Lowe's University offerings include the District Manager and Store Manager immersive week-long leadership experience programs, delivered from the Lowe’s University training center;

the virtually-delivered store department supervisor fundamentals series;

the virtually-delivered field supply chain leadership director, manager, and supervisor experience programs;

and the certification programs for store and technology associates that further develop their skills and knowledge base.

In 2023, we expanded our in-person Lowe’s University offerings to include an Assistant Store Manager leadership training to further develop our store leaders.

Additionally, through Lowe’s Track to the Trades program, we offer all Lowe’s associates the opportunity to enroll in programs to complete apprentice certifications in electrical, plumbing, HVAC, appliance repair, or multi-family maintenance.

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The Track to the Trades program demonstrates Lowe’s commitment to our industry and the communities we serve.

This combined with our tuition-free education program are further examples of how we are investing in the future of our associates.

This combined with our tuition-free education program are further examples of how we are investing in the development of our associates.

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Corporate Responsibility

We take our role as a Fortune ® 50 retailer seriously by managing our business responsibly and focusing on serving our associates and the communities where we live and work.

We strive to integrate sustainability objectives into our business, particularly by focusing on the three pillars of our sustainability strategy:

We take our role as a Fortune ® 50 retailer seriously by managing our business responsibly and focusing on serving our associates and improving the communities where we live and work.

Sustainability objectives are integrated into our business operations, particularly by focusing on the three pillars of our sustainability strategy:

our people and communities, product sustainability, and reducing the environmental footprint of our operations, which we believe will help drive long-term shareholder value.

In addition to oversight by the full Board of Directors, the Board has also delegated primary responsibility for more frequent and in-depth oversight of Lowe’s sustainability strategies and initiatives and reviewing our position on significant environmental and social issues to the sustainability committee of the Board of Directors.

In fiscal 2022, for the fourth consecutive year, Lowe’s was included in the Dow Jones Sustainability North America Index based on our ESG practices.

In fiscal 2023, for the fifth consecutive year, Lowe’s was included in the Dow Jones Sustainability North America Index based on our environmental and social practices.

Investing in our Communities

We understand the important role Lowe’s plays in providing products, services, and support to our communities.

Through our community engagement initiatives and our continued partnerships with nonprofits across the nation, we are mending neighborhoods, revitalizing community spaces, supporting communities when disaster strikes, and preparing the next generation of skilled tradespeople to continue those efforts for years to come.

We carry out these initiatives with a special focus on our nation’s veterans and active military community, first-responders, and under-resourced communities.

In fiscal 2022, Lowe's announced a five-year, $100 million investment in the communities we serve through a new program called Lowe's Hometowns.

Each year from 2022 through 2026, Lowe's Hometowns will complete nearly 1,800 community impact projects, including 100 signature projects chosen from consumer nominations, and nearly 1,700 projects selected through Lowe's stores, supply chain facilities, and store support centers across the country.

Through this effort, Lowe’s is helping restore and revitalize spaces that serve as the hubs and heartbeats of communities, including neighborhood services, parks, and community centers.

In addition, throughout the year we partnered with dozens of nonprofit organizations to identify and respond to critical needs in local communities, including Building Homes for Heroes, Rebuilding Together, and Local Initiatives Support Corporation.

Lowe’s also continues to support our communities as they respond to and recover from natural disasters by providing tools and supplies, access to tool rental trailers, and volunteering with clean-up efforts.

In fiscal 2022, our associates across the U.S.

contributed nearly 170,000 volunteer hours through Lowe’s-sponsored community engagement activities as well as in their personal time.

In addition, through funding from our own associate donations and Company matching, we are able to support associates in times of significant, unforeseen financial hardship through the Lowe’s Employee Relief Fund.

We understand the important role Lowe’s plays in supporting our communities through our philanthropic efforts.

With our community engagement initiatives and continued partnerships with nonprofits across the nation, we are revitalizing neighborhoods, improving community spaces, responding when natural disasters strike, and preparing the next generation of skilled tradespeople.

We carry out these initiatives with a special focus on veterans, the active military community, and first responders.

In 2023, the Lowe’s Foundation established the Gable Grants program, which is a five-year, $50 million commitment to recruit, train, and prepare 50,000 people for skilled trades careers through grants to community and technical colleges and community-based nonprofits.

Product Sustainability

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Through collaboration and established management systems, we monitor our suppliers’ practices to secure high-quality products from suppliers who support worker rights and protect the environment.

Lowe’s human rights policy supports the fundamental principles of human rights, as defined by the “Universal Declaration of Human Rights.” We continue to hold all suppliers to our rigorous standards through our human rights policy, our conflict minerals policy, and our Vendor Code of Conduct which includes enhanced environmental standards for all suppliers.

In addition, we have a wood sourcing policy that specifies that all wood products sold in our stores originate from well-managed, non-endangered forests.

As part of our commitment to reducing the environmental impact of our products, we continue to increase our offering of independently certified products that have validated environmental claims, reduce the usage of natural resources, and help customers decrease energy and water consumption.

In addition, we have a wood sourcing policy with principles that we expect our vendors to follow, including no illegal logging;

no deforestation;

no sourcing of endangered species;

the protection and preservation of biodiversity;

and undergoing and securing Free, Prior and Informed Consent, as defined by the United Nations, wherever applicable.

In 2023, we updated our wood sourcing policy with new wood sourcing risk levels by country, enhanced monitoring practices, and a new forestry grievance process.

As part of our commitment to reducing the environmental impact of our products, we continue to increase our offering of independently certified products that have validated environmental claims, preserve and protect natural resources, and help customers decrease energy and water consumption.

We work with local and regional utilities to offer customers assorted rebates for a variety of environmentally efficient products including ENERGY STAR ® and WaterSense ® .

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We are committed to mitigating climate change by reducing the environmental impact of our operations and supply chain through reducing carbon emissions with investments in energy efficiency, use of renewable energy, environmentally friendly transportation practices, and innovative water and waste management systems.

Greenhouse Gas Emissions

In December 2022, we announced our goal to reach net-zero emissions across the Company’s scope 1, 2, and 3 greenhouse gas emissions by 2050, in accordance with guidelines from the Science Based Targets initiative (SBTi), the global body enabling businesses to set emissions reduction targets in line with climate science.

To meet interim SBTi targets, Lowe’s has also committed to decreasing its scope 1 and scope 2 emissions by 40% and reducing scope 3 emissions by 22.5% below 2021 levels by 2030.

Greenhouse Gas (GHG) Emissions

In December 2022, Lowe’s established a goal to reach net-zero emissions across the Company’s scope 1, 2, and 3 GHG emissions by 2050.

To meet interim targets, Lowe’s has also committed to decreasing its scope 1 and 2 emissions by 40% and reducing scope 3 emissions by 22.5% below 2021 levels by 2030.

We report our progress annually in Lowe’s Corporate Responsibility Report, to CDP, and via lowes.com/net-zero .

The contents of these reports are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the Securities and Exchange Commission (SEC).

To reach these targets, Lowe’s will focus on increasing operational efficiency and working to reduce emissions across Lowe's entire value chain.

We are making further investments in energy efficiency and renewable energy within our operations, while exploring emerging technologies to reduce emissions associated with our vehicle fleet and facilities.

Over the past three years, we have spent nearly $500 million across multiple projects including indoor LED lighting upgrades, replacing stores’ aging HVAC units with high efficiency models, installing and updating building management systems, and installing pallet grinders.

Lowe’s is also focused on partnering with suppliers to help reduce upstream emissions.

We are working closely with suppliers to increase their operational efficiency and reduce their emissions through the use of renewable energy and low-carbon innovations.

Continuing to procure renewable energy is one way Lowe’s is working to reduce our emissions footprint.

In 2020, we secured our first renewable power purchase agreement, the Mesquite Star wind farm in Texas, now in its third year of operation.

That same year, we partnered with Swift Current Energy to source additional renewable energy from the Black Diamond Solar Project in Illinois, which is expected to become operational in the next few years.

We continue to establish a pipeline of other offsite renewable projects planned to become active over several years.

Lowe’s continues to be a member of the Clean Energy Buyers Association to evaluate and explore new opportunities and technologies across renewable energy markets (e.g., community solar, power purchase agreements), as well as implementing on-site solar generation in multiple states.

We are dedicated to promoting sustainable practices in the transportation industry, and we collaborate with the Environmental Protection Agency’s (EPA’s) SmartWay program to reduce transportation emissions by managing and reducing fuel usage by creating incentives for freight contractors to improve efficiency.

Over the past three years, we have spent more than $400 million across multiple projects including replacing stores’ aging HVAC units with high efficiency models, installing and updating building management systems, installing pallet grinders, and completing indoor LED

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lighting upgrades.

Lowe’s continues to partner with our suppliers to decrease our scope 3 GHG emissions.

We encourage suppliers to report their emissions to CDP, giving suppliers more insight into how they generate emissions, which is the first step toward helping them reduce upstream emissions.

This collaboration can help suppliers increase their operational efficiency and reduce their emissions through the use of renewable energy and low-carbon innovations.

When our suppliers mitigate their impacts on the climate, Lowe’s own scope 3 emissions can be reduced.

Procuring renewable energy is another lever to reduce our emissions footprint.

Our first renewable power purchase agreement, the Mesquite Star wind farm in Texas, went live in fiscal 2020 and is now in its fourth year of operation.

As we strive to establish a pipeline of other offsite renewable projects, several projects are planned to become active over the next few years.

Lowe’s is a member of the Clean Energy Buyers Association to evaluate and explore new opportunities and technologies across renewable energy markets (e.g., community solar, power purchase agreements), as well as implementing on-site solar generation in multiple states.

In fiscal 2023, we announced plans to install rooftop solar panels at 174 store and distribution center locations nationwide, including more than 50 sites currently in operation.

Once each site is completed, the solar panels will provide approximately 90% of the energy usage at each location.

We are dedicated to promoting sustainable practices in the transportation industry, and we collaborate with the Environmental Protection Agency’s (EPA’s) SmartWay program to reduce transportation emissions by managing and reducing fuel usage through incentives for freight contractors to improve efficiency.

We are an EPA SmartWay program partner and aim for 100% SmartWay certification for our transportation providers.

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At a local level, store waste, including cardboard, broken appliances, and wood pallets, is recycled through national and regional partners, and we provide in-store recycling and reuse centers for our customers to bring in plastic planter pots, compact fluorescent lamp bulbs, plastic bags, and rechargeable batteries.

In our second year collaborating with How2Recycle, we continue to educate customers and encourage proper recycling of our product packaging.

In our third year collaborating with How2Recycle, we continue to educate customers and encourage proper recycling of our product packaging.

As technology and innovative practices improve, we will continue to explore opportunities to participate in the circular economy.

While our water consumption is modest compared with other industries, we continue to focus on reducing water consumption within our operations.

We use smart irrigation controllers for efficient watering at most stores and have been exploring other water-efficient technologies to increase water savings in our stores and garden centers.

We use smart irrigation controllers for efficient watering at most stores and have been exploring other water-efficient measures to increase water savings in our stores and garden centers.

Additionally, we use leak detection technology to catch leaks as they occur to prevent unnecessary water use.

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Corporate Responsibility Reporting

Lowe’s participates in the CDP’s climate change, forests, and water security questionnaires to benchmark and quantify our environmental practices, provide transparency on our progress, and assist in the reduction of our contributions to climate change.

Lowe’s continues to externally verify our scope 1 and scope 2 GHG emissions and water usage data to increase confidence in our reporting.

Additionally, we align our sustainability reporting with the Sustainable Accounting Standards Board, the Global Reporting Initiative, and the U.N.

Sustainable Development Goals.

We publish our annual Task Force on Climate-related Financial Disclosures report to assess our climate-related risks and opportunities and better understand the potential impacts on our value chain.

Culture, Diversity & Inclusion Report, which are published annually and can be found on our website at responsibility.lowes.com .

Lowe’s participates in the CDP’s climate change, forests, and water security questionnaires to benchmark and quantify our environmental practices and provide transparency on our progress.

Lowe’s continues to externally verify our scope 1 and 2 GHG emissions and water usage data to increase confidence in our reporting.

Additionally, our annual Corporate Responsibility Report is guided by the Sustainable Accounting Standards Board, the Global Reporting Initiative, and the U.N.

Sustainable Development Goals, and we publish our Task Force on Climate-related Financial Disclosures Report to assess our climate-related risks and opportunities and better understand the potential impacts on our value chain.

Additional information regarding our activities related to our human capital strategy, as well as our workforce diversity data, latest community improvement projects, and sustainability efforts can be found in our Corporate Responsibility Report and Culture, Diversity & Inclusion Report, which are published annually and can be found on our website at responsibility.lowes.com .

The contents of these reports are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.

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Our Annual Report, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are made available free of charge through our Internet website at ir.lowes.com , as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).

The SEC maintains an Internet site, www.sec.gov , that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The SEC maintains an Internet site, www.sec.gov ,

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that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business