LOWES COMPANIES INC (LOW) Business

Item 1 - Business

General Information

Lowe’s Companies, Inc. and subsidiaries (the Company or Lowe’s) is a Fortune® 100 company and the world’s second largest home improvement retailer. As of January 30, 2026, Lowe’s operated 1,759 home improvement stores and outlets in the United States, representing approximately 196 million square feet of retail selling space. In addition, Lowe’s operated over 540 branch locations in the United States and Canada, which include our current year acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG).

Lowe’s was founded in 1921 with the opening of its first hardware store in North Wilkesboro, North Carolina. The Company was incorporated in North Carolina in 1952 and has been publicly held since 1961. The Company’s common stock is listed on the New York Stock Exchange - ticker symbol “LOW”.

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.

Our Strategy

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 2025, 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:

•We continue to transform our Pro offerings to drive Pro penetration by continuing to enhance our Pro product assortment, including expanding our offerings to the larger Pro customer through our acquisitions of FBM and ADG, investing in inventory of high-volume Pro products, leveraging our redesigned loyalty program, improving job site delivery capabilities, expanding our Pro extended aisle, and building a comprehensive interior solutions platform.

•We are investing in our omnichannel retail capabilities to accelerate our online business through expansion of our product offerings, enhanced fulfillment capabilities, and a simplified user experience.

•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.

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Our Customers and Market

The home improvement market in which we operate is highly fragmented. Our retail stores and online focus on serving individual homeowners and renters completing a wide array of projects, that vary along the spectrum of DIY and do-it-for-me (DIFM). In addition, we focus on Pro customers that are primarily the small to medium sized Pro, which includes three broad categories: tradespeople, repair and remodelers, and property managers. With the acquisitions of FBM and ADG in 2025, we are taking an important step in our Total Home strategy to serve larger Pro customers in the residential and commercial markets.

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, housing turnover, and residential and commercial construction.  We also monitor demographic and societal trends that shape home improvement industry growth over time as the U.S. population moves through major life stages and events.

Our Competition

The home improvement industry includes a broad competitive landscape that continues to evolve.  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, drywall and home supply retailers and distributors, as well as paint stores, lumber yards, garden centers, and 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, businesses, and the government.

Location of stores and branches, product assortment, product pricing, fulfillment capabilities, 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 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.

Our Omnichannel Capabilities

We are committed to meeting customer demand to shop however, whenever, and wherever they choose. Our omnichannel retail 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. 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 extended aisle of products, enabled by our flexible fulfillment capabilities. Our ability to sell products in-store, online, on-site, through one of our branch locations, or through our contact centers speaks to our leverage of our existing infrastructure with the omnichannel capabilities we continue to introduce.

In-Store

Our 1,759 Lowe’s-branded retail 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.  Our retail 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, including freight flow optimization and advanced AI customer service tools, to enhance the efficiency of our sales associates and improve the customer experience.  Our 16 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.

Online

Through our websites and mobile applications, we seek to empower consumers by providing a 24/7 shopping experience, expanded product assortment, 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, same-day delivery through our gig network, and shipment to their homes or

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

On-Site

We have on-site specialists available for our 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, and fencing, whose characteristics lend themselves to an in-home consultative sales approach.

Branches

Lowe’s has over 540 branch locations that serve larger Pro customers. Our nationwide branch locations specialize in the delivery and installation of building materials for residential and commercial projects, while providing reliable local service and trusted expertise. Services delivered by these locations include distribution of product to large residential and commercial professionals in both new construction and repair and remodel applications, as well as providing design, distribution and installation services to home builders and property managers.

Contact Centers

Lowe’s operates contact centers utilizing a combination of internal staffing and third-party providers. These contact centers enable an omnichannel customer experience by tendering sales, assisting with order management, coordinating deliveries, managing after-sale installations, and answering general customer questions via phone, mail, e-mail, live chat, and social media.

Our Products

Product Selection

To meet customers’ varying needs, we offer a complete line of products for construction, maintenance, repair, remodeling, and decorating.  We offer home improvement products in the following categories: Appliances, Seasonal & Outdoor Living, Lumber, Lawn & Garden, Hardware, Kitchens & Bath, Building Materials, Rough Plumbing, Paint, Millwork, Tools, Electrical, Flooring, and Décor.  A typical Lowe’s-branded home improvement store stocks approximately 37,000 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 17 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. 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.

Supply Chain

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 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. These facilities include regional distribution centers, flatbed distribution centers, import distribution centers, bulk distribution centers, cross-dock terminals, and Fulfillment Centers. 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.

We continue to modernize our network to unlock our omnichannel capabilities while keeping our organization’s sustainability goals top of mind. Through our market-based delivery model, we have been focused on improving the speed of our delivery capabilities for our customers. Most parcel-eligible items fulfilled by Lowe’s can be ordered by a customer and delivered within two business days. Also, the nationwide expansion of our gig provider network enables same-day delivery of certain products from our stores, and as of fiscal 2025, we have the ability to deliver major appliances next-day to the majority of zip codes 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 positions the right products in the right quantities in the right places, and operates with greater network capacity with better flow management and optimization.

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Our Services

Installed Sales

We offer installation services through independent contractors in many of our product categories, with Kitchens & 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.  For certain installations, we simplified the process through 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. In addition, Lowe’s offers installation services for new home construction and remodeling projects.

Lowe’s Protection Plans

We offer extended protection plans for certain products within the Appliances, Kitchens & Bath, Décor, Millwork, Rough Plumbing, Electrical, Seasonal & Outdoor Living, Tools, and Hardware categories. These protection plans provide customers with product protection that enhances the coverage offered by the manufacturer’s warranty and provide additional benefits and repair services that extend beyond the manufacturer’s warranty.

Seasonality and Working Capital

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).  Accordingly, our working capital requirements have historically been greater during our fourth fiscal quarter as we build inventory in anticipation of the spring selling season and as we experience lower fourth fiscal quarter sales volumes.  We fund our working capital requirements primarily through cash flows generated from operations, but also with short-term borrowings, as needed.  For more detailed information, see the Financial Condition, Liquidity and Capital Resources section in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report.

Intellectual Property

The name “Lowe’s” is a registered service mark of one of our wholly-owned subsidiaries. We consider this mark and logo and the accompanying goodwill and name recognition to be valuable to our business. This subsidiary owns and maintains various additional registered and unregistered trademarks, service marks and trade names, including private brand product names, such as, “Kobalt”, “STAINMASTER”, and “allen+roth.” This subsidiary also maintains various Internet domain names that are important to our business, and we also own registered and unregistered copyrights. In addition, we maintain patent portfolios related to some of our products and services and seek to patent or otherwise protect certain innovations that we incorporate into our products, services, or business operations.

Government Regulation

We are subject to a wide array of federal, state, and local laws and regulations. We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods.

Human Capital

When it comes to attracting and retaining top talent, Lowe’s strives to be the employer of choice in retail. 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 would like our associates to see Lowe’s as a “Home to Possibility” with good jobs, a sense of belonging, and a promising future.

Reflecting our commitments, in fiscal 2025 we received several notable employer of choice awards, including being named on the 2025 Disability:IN National Best Places to Work for Disability Inclusion, 2025 Fortune’s World’s Most Admired Companies Specialty Retailer, 2025 Great Place to Work Certified - U.S. and India, 2025 Fair360 Top Companies for Verified Meritocracy and Top Company for High Potentials, a 2025 Military Friendly Employer - Rank Gold, a 2025 VETS Indexes - 5 Star Employer, and a 2025 Best Corporation for Veteran’s Business Enterprises of the Year.

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Our People

As of January 30, 2026, Lowe’s employed approximately 167,000 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.

We have a proactive associate listening strategy, most notably through our annual engagement survey. In fiscal 2025, 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. As of fiscal 2025, 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.

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. This includes such options as a shortened workweek, consistent shifts, or consecutive days off.

Our focus on the associate experience begins at initial application. 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. 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. We strive to maintain a culture of safety, which begins with our leaders modeling the behaviors we want our associates to adopt. We embed safety into associate onboarding, developmental e-learning, and on-the-job training.

Sense of Belonging

We believe that diverse and inclusive teams with a range of perspectives, backgrounds, and experiences, drive stronger ideas, better business results, and deeper connections with the communities we serve. This year, we have focused on strengthening our culture of winning through the launch of the Inclusion Network, offering new ways for associates to engage and grow. As part of this launch, we introduced two mentor programs: the Power Your Growth pilot program for store associates and the Inspire Mentor program designed for corporate associates. Additionally, we achieved a major milestone in our community impact, through completion of more than 2,000 community projects across our four core pillars: safe and affordable housing, skilled trades education, community improvements, and disaster response.

These efforts reflect our commitment to building a workplace and community environment where every associate can contribute, grow, and thrive.

Promising Future

We are committed to securing top talent and providing ongoing training and other developmental opportunities to facilitate meaningful careers at Lowe’s. 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 85% 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 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

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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

We take our role as a Fortune® 100 retailer seriously by managing our business responsibly, 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 operational excellence, which includes reducing the environmental footprint of our operations, which we believe will help drive long-term shareholder value.

Investing in our Communities

Lowe’s is committed to supporting the communities we serve, which is reflected through our philanthropic efforts. Through our community impact programs, nonprofit partnerships and associate volunteer efforts, Lowe’s has continued to revitalize neighborhoods, improve essential community spaces and support natural disaster relief and recovery efforts. Our efforts maintain a special focus on veterans, active-duty military, and first responders. Additionally, since awarding its first Gable Grants in 2023, the Lowe’s Foundation has invested over $50 million to help solve the critical skilled trades workforce shortage through a growing network of community colleges and nonprofits in rural and urban communities.

Product Sustainability

We are committed to promoting sustainable practices throughout our supply chain and providing customers with high quality, safe and more efficient products. Our product selection process begins with our responsible sourcing decisions and ongoing supplier engagement. 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.

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. The policy applies risk-based approach that categorizes sourcing risk levels by country, identifies appropriate monitoring practices and includes a new forestry grievance process to share concerns.

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 reduce energy and water consumption. These products help customers save money and lower operating costs over time while supporting more efficient use of resources. 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

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

Greenhouse Gas (GHG) Emissions

In 2025, Lowe’s continued to make progress toward achieving net-zero emissions across the Company’s scope 1, 2, and 3 GHG emissions by 2050. That plan includes interim emissions targets for 2030: decreasing our 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).

To reach these targets, Lowe’s continues to focus on increasing operational efficiency and reducing emissions across Lowe's value chain. We are making further investments in energy efficiency and renewable energy within our operations, while

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exploring emerging technologies to reduce emissions associated with our vehicle fleet and facilities. Over the past three years, we have invested more than $400 million across multiple projects, including replacing stores’ aging HVAC units with high efficiency models, installing and updating building management systems, deploying material handling automation such as pallet grinders, and completing indoor LED lighting upgrades.

As a global home improvement retailer, Lowe’s engages suppliers on the importance of measuring and reporting emissions through the CDP. Lowe’s was recently recognized as a Supplier Engagement Leader for our outstanding work in 2025. This engagement supports supplier efforts to identify efficiency opportunities, adopt renewable energy and implement lower-carbon solutions.

Procuring renewable energy is another lever to reduce our emissions footprint, and in 2025, we continued to advance a pipeline of both onsite and offsite renewable energy projects. Lowe’s is a member of the Clean Energy Buyers Association to evaluate emerging renewable energy opportunities and technologies, including community solar and power purchase agreements, and continues to implement on-site solar generation across our stores and supply chain network.

We collaborate with the Environmental Protection Agency’s (EPA) SmartWay program to reduce transportation emissions by managing and reducing fuel usage through incentives for freight contractors to improve efficiency. Lowe’s leverages SmartWay data to enhance visibility into scope 3 emissions associated with our U.S. transportation footprint.

Waste

We partner with suppliers to improve recycling and waste diversion, develop regional waste management processes, measure waste streams, and conduct waste audits. At a local level, store waste, including cardboard, broken appliances, and wood pallets, is recycled through national and regional partners. We continue to educate customers and encourage proper recycling of product packaging through our collaboration with How2Recycle®. As recycling infrastructure and technology continues to evolve, we evaluate opportunities to improve waste diversion and support circular economy solutions where feasible.

Water

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 at most stores and deploy leak detection technology to identify and address leaks promptly. We also maintain protocols for the handling and disposal of chemicals to help prevent release into local waterways.

Corporate Responsibility Reporting

Lowe’s participates in the CDP’s climate change, forests and water security questionnaires to benchmark environmental practices and provide transparency on progress. Lowe’s continues to externally verify its scope 1 and 2 GHG emissions, as well as scope 3 Use of Sold Product emissions and water usage data to increase confidence in reporting. 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 a Task Force on Climate-related Financial Disclosures report to assess climate-related risks and opportunities.

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 Impact and Culture 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.

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 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.