Marvin Ellison
Chairman and Chief Executive Officer at Lowe's Companies
Thank you, Kate, and good morning, everyone, and thank you for joining us. Second quarter sales were $23.6 billion, with comparable sales down 5.1% from the same period last year. While we're pleased that we delivered positive comps in Pro and online sales, we continue to manage through softness in DIY demand. Although this remains a challenging industry backdrop for the homeowner, I'm pleased with our team's ability to effectively manage the business. This is reflected in our disciplined expense management across the company along with continual progress on our perpetual productivity improvement, or PPI initiatives. These efforts helped us respond to the pullback in DIY discretionary projects and unpredictable weather across the country to deliver better than expected flowthrough, while improving the customer experience. Later in the call, Joe will provide more detail on our improved customer service results in Q2.
We're also encouraged to see results from our ongoing investments in our total home strategy this quarter, allowing us to deliver mid-single digit positive comps in Pro and 2.9% comparable sales growth online. This demonstrates the importance of these strategic investments and shows that our total home strategy is gaining traction even in this pressured macro environment.
Our resilient small to medium Pro customers are responding to the way we've transformed our product and service offerings to meet their needs. Bill and Jill will provide more detail on our successful Pro initiatives later in the call. When it comes to online sales, we delivered growth across all three business areas, driven by continued improvement in conversion rates as customers responded to our compelling offers and to our new expanded same day delivery options that are now available on multiple platforms. In Q2, we added Uber Eats to our list of delivery partners, which also includes DoorDash, Shipt and Instacart, in addition to our lifestyle technology partner, OneRail, provides a fully integrated solution available on lowes.com and in store.
As we continue to evolve our omnichannel strategy, we've learned that having multiple delivery platforms extending our reach into both urban and suburban areas and helps us drive incremental sales with different types of customers, especially younger generations who are more digitally savvy. We're also reaching a broader customer base and making a deeper connection with our new and existing customers through our marketing campaigns featuring sports icons like Lionel Messi, widely recognized as the best soccer player in the world. We have very effectively leveraged our partnership with Messi to gain exposure to our new DIY loyalty program, MyLowe's Rewards. Overall, we're very pleased with our MyLowe's Rewards loyalty program, which just launched nationwide in March, and through this program, we've learned more about our customers lifestyle and purchasing trends, which will allow us to curate meaningful offers for them now and in the future.
Now, let me tell you about how we're leading the way with innovation and home improvement. Lowe's is working with Apple to help customers visualize and design their dream kitchens using Apple Vision Pro. This past quarter, we piloted an in-store design experience for our customers in three test markets, where, with the help from a Lowe's associate, customers could wear the Apple Vision Pro and use the Lowe's style studio app to explore and customize hundreds of kitchen designs in 3D, using products, fixtures and appliances all available at Lowes. This is just one example of how we're leaning into innovation, while we're also working with leading platforms like Nvidia, OpenAI and Palantir to develop AI solutions for both our customer and our solstice to help us improve how we sell, shop and how we work.
Before I close, let me give you an update on the trends we're seeing in the macro environment. At the beginning of the year, our full year outlook reflected our expectation that macro and consumer trends in 2024 would be similar to the back half in 2023. That assessment has turned out to be accurate, and yet there still remains a great deal of uncertainty, particularly around interest rates and inflation. In terms of housing specifically, we're seeing significant implications as a result of a lock in effect. Simply put, people aren't moving nearly as often as they typically do because current mortgage rates are so much higher than their existing rates, and as a consequence, housing turnover is hovering near its lowest levels since the mid 1990s, and the preference for spending on services, especially for the more affluent consumer has persisted much longer than expected.
That said, the three core drivers of our business remain strong. Home prices continue to appreciate, which is sustaining historically high levels of home equity. Disposable personal income is now growing faster than inflation, and the aging housing stock means people will need to make repairs and improvements in their homes. When you combine those factors with trends like a large number of millennial farming households, baby boomers aging in place, and people continuing to work from home, we remain optimistic about the medium to long term outlook of the home improvement industry.
And in the meantime, our operating philosophy in this challenging home improvement macro environment is very straightforward. We will continue to invest in technology and innovation. We will offer our customers value and differentiation whenever and however they choose to shop, and we will be incredibly disciplined with our expense management. We will achieve this by improving our operational efficiency through our PPI initiatives and making the right investments in our total home strategy. Although we are unable to call the date for the recovery in home improvement, we are confident that we'll be in a strong position to take share when the market begins to inflect.
In closing, I want to thank our frontline associates for their dedication to our customers and communities. One of the best parts of my job is visiting stores every week, and in the first half of this year I personally visited all 15 geographic regions. These store visits gives me an opportunity to personally thank our wonderful associates for their hard work and provide me with invaluable insights into how we can continually enhance our customer experience.
Thank you again for joining us this morning, and with that, I will now turn the call over to Bill.
