LOWES COMPANIES INC

Net Sales – Net sales in the third quarter of 2024 decreased 1.5% to $20.2 billion. Comparable sales declined 1.1%, consisting of a 1.3% decline in comparable customer transactions, partially offset by a 0.2% increase in comparable average ticket.

During the third quarter of 2024, we experienced growth in Building Materials, Hardware, and Seasonal & Outdoor Living, as well as performance above company average in Paint, which reflect continued strong demand with the Pro customer and online, along with storm-related demand lift.

Net sales in the first nine months of 2024 decreased 3.9% to $65.1 billion. Comparable sales also declined 3.6% over the same period, drivenby a 3.6% decline in comparable customer transactions, while comparable average ticket was flat.

Gross Margin – For the third quarter of 2024, gross margin as a percentage of sales increased three basis points. Gross margin rate benefited from ongoing productivity initiatives, partially offset by investments in our supply chain and storm-related product mix and damages.

For the first nine months of 2024, gross margin as a percentage of sales contracted 22 basis points, primarily due to ongoing investments in our supply chain and a decline in credit revenue, partially offset by lower transportation costs.

SG&A – For the third quarter of 2024, SG&A expense deleveraged 60 basis points as a percentage of sales compared to the third quarter of 2023, primarily due to employee compensation & benefits, advertising, and incremental direct storm-related costs, partially offset by the current year gain on contingent consideration associated with the fiscal 2022 sale of the Canadian retail business.

For the first nine months of 2024, SG&A expense as a percentage of sales deleveraged 99 basis points as a percentage of sales, primarily due to the same factors that impacted SG&A for the third quarter, in addition to the cycling of prior year favorable legal settlements.

Depreciation and Amortization – Depreciation and amortization deleveraged three basis points as a percentage of sales for the third quarter of 2024 compared to 2023.

For the first nine months of 2024, depreciation and amorti zation deleveraged nine basis points as a percentage of sales.

Interest – Net – Net interest expense for the third quarter of 2024 leveraged 11 basis points as a percentage of sales.

Net interest expense for the first nine months of 2024 leveraged one basis point as a percentage of sales.

Income Tax Provision – Our effective income tax rates were 23.6% and 24.6% for the three months ended November 1, 2024 and November 3, 2023, respectively, and 23.8% and 24.1% for the nine months ended November 1, 2024 and November 3, 2023, respectively.