LOWES COMPANIES INC

Net Sales – Net sales for the first quarter of fiscal 2024 decreased 4.4% to $21.4 billion. Comparable sales declined 4.1% consisting of a 3.1% decrease in comparable customer transactions and a 1.0% decrease in comparable average ticket.

During the first quarter of fiscal 2024, we experienced comparable sales increases in two of 14 product categories: Lawn & Garden and Building Materials. Positive comparable sales in Lawn & Garden was driven by smaller ticket projects within Landscape Products and Live Goods. Growth in Building Materials reflects strong demand with the Pro customer, demonstrating improvement from our investments in our Pro product and service offerings, including our enhanced assortment.

Gross Margin – For the first quarter of fiscal 2024, gross margin decreased 49 basis points as a percentage of sales. The gross margin contraction for the quarter is driven by higher costs associated with investments in our supply chain, targeted spring promotions, particularly in Lawn & Garden, and a decline in credit revenue, partially offset by lower transportation costs and other productivity initiatives.

SG&A – For the first quarter of fiscal 2024, SG&A expense deleveraged 165 basis points as a percentage of sales compared to the first quarter of fiscal 2023 due primarily to cycling the prior year favorable legal settlement and gain on contingent consideration associated with the fiscal 2022 sale of the Canadian retail business, as well as current year fixed cost deleverage due to lower sales.

Depreciation and Amortization – Depreciation and amortization deleveraged 15 basis points for the first quarter of fiscal 2024 compared to the prior year primarily due to lower sales.

Interest – Net – Interest expense for the first quarter of fiscal 2024 deleveraged nine basis points as a percentage of sales, primarily due to lower sales.

Income Tax Provision – Our effective income tax rates were 23.7% and 23.1% for the three months ended May 3, 2024 and May 5, 2023, respectively.