Lowe's Companies, Inc.

Good morning, everyone. Welcome to Lowe's Company's fourth quarter 2020 earnings conference call. My name is Rob, and I'll be your operator for today's call. As a reminder, this conference is being recorded. I will now turn the call over to Kate Perlman, Vice President of Investor Relations.

Thank you, and good morning, everyone. Here with me today are Marvin Ellison, our President and Chief Executive Officer, Bill Boltz, our Executive Vice President, Merchandising, Joe McFarland, our Executive Vice President, Storrs, and Dave Denton, our Executive Vice President and Chief Financial Officer. I would like to remind you that our notice regarding forward-looking statements is included in our press release this morning, which can be found on Lowe's Investor Relations website. During this call, we will be making comments that are forward-looking, including our expectations for fiscal 2021. Actual results may differ materially from those expressed or implied as a result of various risks uncertainties, and important factors, including those discussed in the risk factors, MD&A, and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found in this morning's press release and on our investor relations website. With that, I'll turn the call over to Marvin.

Good morning, everyone. I'd like to begin by thanking our frontline associates for their efforts to serve our customers and communities during the ongoing pandemic. In recognition of the efforts and the unique challenges posed by the pandemic, we invested over $100 million in incremental financial assistance for our frontline hourly associates in the quarter, which brought our total COVID-related support for hourly associates to over $900 million for the year. We remain laser focused on our highest priority, which has always been protecting the health and safety of our associates and communities, And in the quarter, we invested $65 million in support of store safety protocols in our communities. For the year, we invested nearly $1.3 billion in COVID-related support for our associates, store safety, and our communities. Now turn to our results. For the quarter, we delivered total company comparable sales growth of 28% over the prior year and 41% growth in adjusted diluted earnings per share to $1.33. Those results cap off a fiscal 2020 where comp sales increased 26 percent and adjusted earnings per share grew 54 percent to $8.86. Looking at the fourth quarter results from a geographic perspective in the U.S., growth was broad-based, with comparable sales growth exceeding 19 percent across all 15 geographic regions and exceeding 25 percent for all U.S. divisions. On Lowes.com, sales grew 121% as customers shifted more of their shopping online, especially over the holiday season. We continue to enhance our omnichannel retailing capabilities in store operations, on Lowes.com, and across our supply chain, with our goal to meet customer demand to shop however, whenever, and wherever they choose. Once again, DIY comps outpace pro comps in a quarter driven by a consumer mindset that remains focused on the home. During the pandemic, the home has come to serve four primary purposes, a residence, a home school, a home office, and the primary location for recreation and entertainment. In addition to the strength in the DIY customer, our continued focus on the pro is a very important component of our total home market share acceleration strategy. And Pro continues to show strong momentum, evidenced by the mid-20s comp in the quarter and nearly a 20% comp for the year. Part of our Q4 success in Pro was driven by our steps to tailor our service offering for these busy customers, even redesigning the footprint of our stores to facilitate a fast, intuitive shopping experience for our small and medium-sized Pro. Pros are rewarding our efforts with their repeat business, returning to shop our stores over and over again. Looking forward, we're focused on further enhancing our service levels, both in-store and online, to meet the needs of our new and existing pro customers. Joe will discuss our efforts to grow market share in pro later on the call. Now turning to Canada, we delivered calm growth in the mid-teens despite several COVID-related operating restrictions that went into effect during the quarter. The new Canadian leadership team made tremendous progress in 2020 and remains focused on improving operational efficiency by executing our retail fundamentals playbook to drive greater labor productivity and improve gross margins. And as I mentioned earlier, we're gaining traction with our new total home strategy, which is our commitment at Lowe's to provide everything a customer needs for their home. As an example, during the quarter, we quickly pivoted from a successful holiday Seasons of Saving event to launch two events to support our total home strategy in January, a home organization event and a bath event. During the home organization event, we provided our customers with storage solutions for their home and garages, freeing up valuable space for other activities. The bath event helped our customers find everything they need from paint to fixtures to toilets and tubs and even towels to upgrade their bathrooms. And for the customers who didn't want to do it yourself, we provided installation services, truly a total home solution for a dream bathroom. Both events helped us to close out the fourth quarter with very strong sales in January. Looking forward, I am confident we're making the right investments to leverage our total home strategy while we shift our focus from retail fundamentals to accelerating our efforts to gain market share. As a reminder, our total home strategy will drive market share acceleration by enhancing our investments in the pro, online, installation services, localization, and elevating our product assortment. We're confident that these initiatives will allow us to drive sustainable market share growth as we deliver a total home solution for our pro and DIY customers. Before I close, I'd like to once again extend my heartfelt appreciation to our associates for their dedication to serving our communities in this time of need. During the most challenging personal and professional year in many of our lives, our associates made enormous sacrifices for our customers and communities. And I'm very pleased that the marketplace is taking notice, as reflected by Fortune Magazine recently recognizing Lowe's as the number one most admired specialty retailer, bestowing that honor on Lowe's for the first time in 17 years. We're humbled by the recognition, but we also know that 2021 will be a very unpredictable year. Even with the vaccine rollout underway in the US and Canada, we continue to grapple with numerous challenges presented by COVID-19. And although the business environment remains uncertain, we're confident that we'll continue to drive market share gains and operating efficiency. Also, our newly developed operational agility allows us to quickly respond to a wide range of potential macro outcomes in 2021. And we will not lose focus on our number one priority, which is supporting the health and safety of our associates and our customers. And with that, I turn the call over to Bill.