What changed in this filing

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Item 1. Business

2025-03-24 compared with 2024-03-25 · 74 added, 73 removed, 153 unchanged (49% 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 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.

As of January 31, 2025, Lowe’s opera ted 1,748 home improvement stores and outlets in the United States, representing approximately 195 million sq uare 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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For additional information about the Company’s performance and financial condition, see Item 7 , “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report.

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 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, 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.

We are increasing visibility to our installation services through improved signage throughout our stores and continuing to improve the customer experience for our services, which are provided by our network of independent installers or outsourced to our third-party model that sells, furnishes, and installs more complex projects.

Our expanding localization efforts better serve the product needs of the unique communities across the country.

Finally, we continue to elevate our product assortment to provide the right products at the right price to meet our customers’ needs.

Lowe’s is an omnichannel retailer whose focus is on helping customers solve problems and fulfill dreams for their homes by providing an excellent customer experience, creating a great place to work for our associates, and improving our communities, which we believe will create long-term, sustainable value for our shareholders.

In fiscal 2024, we continued to execute on our Total Home strategy that was introduced in fiscal 2020, by focusing on serving the professional customer (Pro customer), accelerating our online business, expanding installation services, improving localization efforts and elevating our product assortment.

In December 2024, we updated our Total Home strategy, aligned with the key drivers of home improvement demand, to help our customers solve their home improvement needs with more value and exceptional service.

The five pillars of our Total Home strategy are as follows:

Pro penetration

home services

loyalty ecosystem

space productivity

• We continue to transform our Pro offerings to drive Pro penetration by continuing to enhance our Pro product assortment, investing in inventory of high-volume Pro products, launching our redesigned loyalty program, improving job site delivery capabilities, and rolling out our new Pro extended aisle.

• We are investing in our omnichannel retail capabilities to accelerate our online business through project design tools and our online product marketplace.

• We are expanding our installation services to create a high value simplified installation solution, which are provided by our network of independent installers or outsourced to our third-party model that sells, furnishes, and installs both smaller refresh projects and more complex projects.

• We are creating a loyalty ecosystem that drives brand preference and includes building out our MyLowe’s Rewards infrastructure for both Pro and do-it-yourself (DIY) customers.

• Finally, we are increasing space productivity by optimizing our assortments and tailoring them to the local markets, and balancing our value-oriented private brands with our national brands.

Our Customers and Market

The home improvement market in which we operate is highly fragmented, serving Pro customers, individual homeowners, and renters completing a wide array of projects that vary along the spectrum of do-it-yourself (DIY) and do-it-for-me (DIFM).

The Pro customer consists of three broad categories:

The Pro customer at Lowe’s is primarily the small to medium sized Pro, which includes three broad categories:

tradespeople, repair and remodelers, and property managers.

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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, and the persistence of remote work.

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We also monitor demographic and societal trends that shape home improvement industry growth over time as the US population moves through major life stages and events.

These include strong millennial household formation, an increased preference among older generations to age in place, and the persistence of remote work.

Our Competition

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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, businesses, 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, 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.

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 (AI) and machine learning technologies, expansion of fulfillment capabilities, and customer expectations also underscore the importance of omnichannel capabilities as a competitive factor.

See further discussion of competition in Item 1A , “Risk Factors”, of this Annual Report.

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We are committed to meeting customer demand to shop however, whenever, and wherever they choose.

Our omnichannel capabilities allow our customers to move from channel to channel with simple and seamless transitions even within the same transaction.

For example, for many projects, more than half of our customers conduct research online before making an in-store purchase.

Our omnichannel network provides a single view of the customer, no matter where they place their order, whether in-store, online, on-site or through the contact center.

This allows our customers to move from channel to channel with simple and seamless transitions even within the same transaction.

For example, for many projects, the majority of our customers conduct research online before making an in-store purchase.

For purchases made on Lowes.com, customers may pick up their purchase in-store at the customer service desk, curbside, or from touchless lockers, or have their purchase delivered to their home or business.

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Our home improvement stores offer similar products and services, with certain variations based on localization, along with a dedicated team of knowledgeable and friendly frontline 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, 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.

We continue to develop and implement productivity tools, including our front-end transformation and freight flow optimization initiatives, to enhance the efficiency of our sales associates and improve the customer experience.

Our Lowe’s Outlet stores have a smaller format and offer value to our customers through incremental savings on discontinued, overstocked, or 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.

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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

Lowe’s operates contact centers in a virtual workplace.

Lowe’s operates contact centers utilizing a combination of internal staffing and third-party providers.

These contact centers help Lowe’s enable an omnichannel customer experience by providing the ability to tender sales, assist with order management, coordinate deliveries, manage after-sale installations, and answer general customer questions via phone, mail, e-mail, live chat, and social media.

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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.

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

Our product assortments offered in-store strive to meet the needs of the local market for the Pro and DIY customer.

See Note 16 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 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.

We are balancing our value-oriented private brands with our national power brands, intensifying our localization efforts and expanding our rural assortment.

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

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

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.

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

In addition, we leverage our existing supply chain to deliver directly to our Pro customers.

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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On average, each RDC and FDC serves approximately 115 stores.

Our Pro fulfillment network stocks deeper quantities of our top Pro assortments and has expanded capabilities to handle large orders on multiple flat beds.

Our Pro fulfillment network stocks deeper quantities of our top Pro assortments and has expanded capabilities to handle large orders on multiple flat bed trucks.

Our IDCs were expanded to create more capacity to hold import product at the coast, which improves our network’s agility to move inventory where and when it is needed.

Our BDCs handle appliances and other big and bulky product, and our XDTs fulfill final mile box truck deliveries of these products.

Our BDCs handle appliances and other big and bulky products, and our XDTs fulfill final mile box truck deliveries of these products.

Our supply chain supports every pillar of our Total Home strategy, and as such, we continue to invest and transform our network to unlock our omnichannel capabilities while keeping our organization’s sustainability goals top of mind.

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.

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

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

As of fiscal year 2024, we have finalized the roll-out of our market-based delivery model.

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

As of fiscal year 2023, most parcel-eligible items can be ordered by a customer and delivered within two business days at standard shipping rates.

Also, the nationwide expansion of our gig networks provides same-day delivery of certain products from our stores.

As of fiscal year 2024, most parcel-eligible items fulfilled by Lowe’s can be ordered by a customer and delivered within two business days or less at standard shipping rates.

Also, the nationwide expansion of our gig provider network enables same-day delivery of certain products from our stores, and as of fiscal 2024, we have the ability to deliver major appliances next-day in almost every zip code in the United States.

Customer needs and buying patterns are constantly changing, and our supply chain will continue to evolve to meet their needs.

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

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We are building an omnichannel supply chain that positions the right products in the right quantities in the right places, and operates with greater network capacity with better flow management and optimization.

Installed Sales

We offer installation services through independent contractors in many of our product categories, with Flooring, Kitchens & Bath, Millwork, Appliances, and Lumber accounting for the majority of installed sales.

We offer installation services through independent contractors in many of our product categories, with Kitchen & Bath, Flooring, Appliances, Millwork, and Rough Plumbing accounting for the majority of installed sales.

Our installed sales model, which separates selling and project administration tasks, allows our sales associates to focus on project selling, while project managers ensure that the details related to installing the products are efficiently executed.

We are simplifying the process through a team of remote associates that we call our central selling team.

This team handles building quotes, answering questions over video or phone call, and providing personalized support to our customers.

We are also implementing technology that allows our customers to finalize their installation contract and checkout on lowes.com or mobile application, so they do not need to return to the store.

Installed sales, which includes both product and labor, accounted for approximately 5% of total sales in fiscal 2024.

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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.

As a testament to our commitments, in fiscal 2024 we received several 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, 2024 Great Place to Work Certified - U.S.

and India, Fair360 Top 50 Noteworthy Company for Workplace Fairness, 2024 American Opportunity Index Top 100 Company, and a Best Corporation for Veteran’s Business Enterprises of the Year.

As of January 31, 2025, Lowe’s employed approximately 161,000 full-time associates and 109,000 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.

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

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

As of fiscal 2024, our minimum wage starts at $15 per hour, which helps us remain competitive for talent in all of our markets.

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.

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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.

We have Spanish language capabilities to promote bilingual hiring by guiding Spanish-speaking candidates through the full application process.

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

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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 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.

Earlier this year, we evolved our diversity and inclusion initiatives, combining our eight Business Resource Groups into one umbrella associate engagement organization.

By shifting to one, unified program, Lowe’s is able to foster networking and development for all associates across all areas of the business.

Additionally, we eliminated our sponsorship of outside festivals, parades, and fairs to focus on our four community pillars:

safe and affordable housing, community improvements, skilled trades education, and disaster response.

Finally, we are evaluating our participation in external surveys, factoring in the goals of each survey and whether we will gain any actionable insights as a result of our participation.

These changes were made with the goal of creating a more respectful and inclusive workplace for all of our associates.

Promising Future

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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.

In addition, our in-person Lowe’s University offerings 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.

The program also connects them with Pros to help them start a career in their area of interest.

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 development of our associates.

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The Track to the Trades program

demonstrates Lowe’s commitment to our industry and the communities we serve.

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

Corporate Responsibility

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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 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.

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

In fiscal 2024, for the sixth consecutive year, Lowe’s was included in the Dow Jones Sustainability North America Index based on our environmental, social, and operational practices.

Investing in our Communities

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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.

Additionally, since awarding its first Gable Grants in 2023, the Lowe’s Foundation has invested over $25 million to help expand skilled trades career pathways through a growing network of community colleges and nonprofits in rural and urban communities.

From funding new skilled trade facilities and instructors to accreditation programs, these grants support carpentry and construction, HVAC, electrical, plumbing, and appliance repair training.

Product Sustainability

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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 ® .

We have enhanced our wood sourcing policy to include a more robust risk-based approach, including new wood sourcing risk levels by country, improved monitoring practices, and a new forestry grievance process.

We are dedicated to empowering our customers to lead more sustainable lives while minimizing the environmental footprint of our products.

We continue to expand 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 efficient products including ENERGY STAR ® and WaterSense ® .

Reducing our Environmental Footprint

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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 .

Lowe’s has since increased its interim emissions targets for 2030 and committed to decreasing its scope 1 and 2 emissions by 42% and reducing scope 3 emissions by 25% below 2021 levels.

We report our progress annually in Lowe’s Corporate Responsibility Report, to the Carbon Disclosure Project (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).

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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 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.

Over the past three years, we have spent more than $300 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 lighting upgrades.

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

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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.

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

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

More than 100 sites were operational by the end of fiscal 2024.

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

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

In our fourth 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.

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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.

Lowe’s continues to externally verify our scope 1 and 2 GHG emissions, as well as scope 3 Use of Sold Product 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.

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Available Information

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 ,

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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 , 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