Well, good morning. Thank you all for joining us today. So, my name is Brian Nagel. I work at Oppenheimer as our consumer growth and e-commerce analyst. So this meeting with Lowe's very much represents a continuation of our 24th Annual Oppenheimer Consumer Growth and E-commerce Conference. So again, we appreciate you all for taking the time to dial in, and I'm very pleased to have with us the senior leadership team of Lowe's, CEO Marvin Ellison, CFO Brandon Sink, and Investor Relations Kate Pearlman. So Team Lowe's, thank you very much for joining us.
Thank you for having us, Brian.
Thanks, Brian.
Really appreciate it. So we're gonna structure this as a fireside chat between me and Lowe's, me asking questions, Lowe's answering those questions. To the extent there are questions from the audience, just send them through the chat, and I'll be happy to work them into our conversation. I thought, you know, before we jump into the specifics of Lowe's, I mean, one of the key questions I've been asking companies at our conference is just maybe to give their assessment of the health of the U.S. consumer. You know, Lowe's being an extraordinarily well-run company and a leading home improvement chain, I think has a very good understanding of consumer spending, insight into consumer spending. So maybe we can start there before we jump into more specific questions on Lowe's.
Okay. So, Brian, always a pleasure to be with you. So I'll start out, and I think the best way to discuss the consumer for us is in terms of our DIY, do it yourself, and our pro customer. So let me start with the DIY consumer. This consumer remains very cautious, specifically when you think about larger ticket discretionary purchases. And the segment and the sentiment for the DIY consumer remains a bit weak, you know, influenced by things like persistent inflation. While we see the more affluent DIY consumer, they're still spending on services and experiences, and that's still a result of being pent up during the pandemic. People are getting out, and they want to experience things again.
In addition to that, as you know, mortgage rates remain high, and turnover is at historic lows, and so you have what we describe as a locked in place for a lot of homeowners with these low rates. So given these trends, as we look at home improvement spend in the near term, we think it's gonna be focused more on smaller projects and looking for value, and we are working to position ourselves to be in that space as effectively as we can. Now, as I transition to the pro segment, you know, I wanna remind you that, you know, our focus in that segment is the small to medium-sized pro customer, and this customer remains really resilient.
In our most recent pro surveys, which we try to do on a quarterly basis, shows that their backlog of work and projects are very consistent with last year, which is actually good news for us. And we've discussed at our most recent analyst conference that we have an expectation that we're gonna grow this specific segment two times the market. We've been able to do that. We think we can continue to do it. So that's a little bit of a view from two different lenses of the DIY homeowner and the pro segment.
That's very helpful, Marvin. You know, so just maybe one follow-up question on that again, you know, and for the sake of our clients, I know in a lot of my conversations with our clients lately, everyone's trying to assess in real time the health of the consumer. Do you think these pressures that you're articulating here on broader spending, are they getting worse, staying the same, or maybe are starting to get better?
I'll give you a view, and I'll let Brandon jump in. I think from our perspective, they're pretty much staying the same. I mean, as we look at last year, I mean, we saw a precipitous, you know, fall in demand starting around August of last year. And so we, you know, kind of looked at this year as we planned it out and forecasted that we would get more of the same, you know, for 2024, and I think that's pretty much what we're seeing. Now, you gotta factor in a couple of unique things, and that is weather. You know, as you know, home improvement is a really weather-correlating retail format, specifically this time of the year, because spring is our peak season.
And so when we deal with, you know, unique weather, like, you know, this kind of heat dome we're dealing with now, or you deal with, you know, more persistent, you know, rain and other types of precipitation, you know, that throws a little bit, you know, of an anomaly in. But relative to sentiment, we see it pretty much the same, I don't say better or worse. Brandon, you can have a-
Yeah, I would just say, Brian, we're obviously looking for any sort of inflection point, you know, in particular in what we refer to as the, you know, DIY big ticket, discretionary sort of core categories. And right now, as Marvin mentioned, anything, you know, that's, that's rate sensitive or tied to the, you know, new home occasion, given historic housing turnover kind of lows, roughly four million units, we, we continue to see softness in that. So the good news is, that's, that's factored in our guidance. We don't expect necessarily any change from that, you know, as we transition from the first half to the second half of the year. And that's essentially what we're seeing. We're continuing to see softness in those categories. We're seeing some bumps, you know, in certain seasonal categories around weather.
Appliances continues to be a good category for us, just as we see some of the promo pressure starting to ease over the second half of the year. But again, some of the big ticket interior categories, decor, K&B, f looring, those are categories that we continue to watch and monitor, and again, no real changes or no real inflection points at this point in time.
But I think the key, the key point, Brian, is that it's pretty much what we expected. So we're not seeing anything that we're surprised by. We expected, you know, our pro segment to be stronger in DIY. We're seeing that. And we expected, you know, big-ticket discretionary pullback to remain, and we're seeing that. But overall, it's about what we expected.
Very helpful. Just one, maybe one very short-term comment, just given it's the, you know, a lot on a lot of people's mind. Marvin, I think you mentioned the heat dome. You know, we've been talking about the heat, and everyone's been promoting the heat. As you think about, you know, this heat and this excessive heat, and again, that's this is not necessarily anything new, because we've been dealing with temperatures like this or erratic weather for a while, but just generally speaking, I mean, they this excessive heat, a positive or a negative for Lowe's in the nearer term?
Well, in the near term, it's not a positive, because there are certain cycles that take place, you know, in outside garden, specifically for your yard, you know, that begin with pre-emergence, and it goes to different stages of preparation. When you go from spring to extreme heat, you put pressure on some of those outside garden-related projects. Also, when you have customers, as an example, you know, waiting to get their new patio furniture for the season, you know, you're in excessive heat, you know, specifically for a certain geographic area, you know, it could delay or postpone, you know, some of those types of purchases.
The good news is that as a retailer that has made a lot of investments on interior categories, you know, we try to pivot, you know, to those interior categories, you know, during these excessive heat times. But the unique thing about it is, a lot of our business is on the outside, you know, of the home, in the yard, on the exterior during this time of the year, and it's highly dependent on the DIY. So although we have offsets with things like air movement, et cetera, you know, when you have it for an extended period of time, the excessive heat, you know, it really starts to put pressure on the business. So we're not there yet, but we're managing through it. We have really good pivot points.
The great news is, we have a lot of experience on this team, on the merchandising side and the operations side. This is not unique for us. We've dealt with this many times before. We have different levers we can pull, different things we can shift to, and we've been doing that. For now, we're just managing through it, and we'll see how long it persists.
No, very helpful. So maybe taking a step back, Marvin, so you joined Lowe's in 2018. Now, clearly there's, you know, been a number of events from a macro standpoint that, you know, have occurred since 2018, not the least of which has been the pandemic. But again, the question I want to ask you, and I know you and I have had this conversation over the years, but so I guess I'm asking for more of an update. You know, since you joined, you know, you built a team that's really very successfully repositioned Lowe's. Kind of where are you on that effort?
You know, you know, maybe talk about some of the key wins as you've repositioned this company, and then what are you looking at continuing to do from here, just from a broader repositioning standpoint?
No, it's a really really good question, Brian. So I think it's all grounded with our Total Home strategy. As you remember, when I came in, we focused on what we coined as retail fundamentals. We felt like we had to get the fundamentals of the retail business back in place, and then we shifted now to what we call our Total Home strategy. And our objective is to just overall to improve the service offering, so we can compete better, you know, in a marketplace that's broad. And the things that we've done to create this Total Home environment is investments in pro loyalty, investments in improving our overall brand lineup, inventory depth, and these are all things in the pro area that we were way behind on.
In addition to that, we wanted to improve our online tools, and as a result of this Total Home investment, just on the pro side, we've improved our pro penetration from when I arrived here to about 19%, and now we're over 25%, and we still have a lot of room to grow. But then we understood that, you know, in this retail environment, you have to be an omnichannel retailer, and we were not that in 2018. As a matter of fact, in 2018, we couldn't even give a customer an e-receipt, and I'm not making that up. So we've made a lot of investments, and we've improved our overall omni experience with a wide variety of gig delivery.
We wanna serve customers any way they wanna shop, online, in-store, buy online, pick up in store, buy online, pick up curbside, ship from store. We can do all those things now, and we're really pleased with the progress. But also part of the Total Home strategy is how you localize the store from a merchandising standpoint, and how do you make that store feel like it's the neighborhood store? And one great example of that is our rural initiative, and those remain our best performing stores, and we're learning a lot from that. But then, you know, we want to take a step back and say: How do we deliver better profitability? How do we become more of a better steward, so to speak, with the capital and how we allocate capital?
So our perpetual productivity initiatives, or PPI, has enabled us to improve operating profit, you know, from less than 9% to now over 13%, by really focusing on all different functions of the company being more efficient, and, and, and we're just continuing to invest. So if you ask me the question, where are we? I still say we're early innings. One of the reasons why we're encouraged as a company is that we've made tremendous progress. We've made lots of investments in supply chain, IT infrastructure, omni, and some of the things I've talked about, but we still look at our project roadmap for the next three to five years, and there are some robust things on there that we're still kind of working our way to, that we know will just make us a more efficient company on the top line, and also from a profitability standpoint.
So we're excited about the future. We just have to execute in this downturn, which we are doing really well, and we have to build out the investments for the future, because we know that when the cycle changes, we wanna be in a great position to take advantage of that. And one of the things that we're doing is these loyalty programs with Pro and DIY are part of those foundational things that we think will allow us to be in a great position when this cycle finally turns up.
Let's talk about that a little bit with the loyalty programs. You know, so what are you seeing as far as a kind of initial response from your consumers, both in the DIY side and the Pro side? How is that helping to drive the business?
Yeah, so Brian, I would say, you know, still early innings in terms of the DIY loyalty program, you know, that launched in March, specifically. Our goals there were, you know, to drive stickiness, you know, increase number of visits into the store, and specifically, our ability to market on a more personalized basis. So, early innings there. We're very pleased, you know, with what we've been able to do there with, you know, driving enrollments, driving repeat visits, and seeing points redemptions there. So we're gonna continue to leverage that data, you know, continue to drive, you know, personalized offers, personalized pricing. We have fulfillment benefits that we're now offering in terms of parcel, looking to continue to lean into that. So very excited about that program and what we're seeing.
And then I think you also mentioned as it relates to MVP, you know, Pro loyalty program, that's been, you know, 18+ months now. We're, we're starting to pair that, you know, along with our CRM platforms within our stores. We're able to know who our Pros are, what they're shopping, more importantly, what they're not shopping, and be able to pair sort of the digital capabilities that we have with the localized in-store, in-store specialists that are serving our Pro customers. So, great momentum, great traction from a Pro standpoint. Marvin mentioned 600 basis points of penetration. You know, over the last several years, we continue to drive, you know, positive Pro comps quarter after quarter, year after year, and just really excited with the momentum that we're seeing with those loyalty programs, both on, on the DIY side and on the Pro side.
So, Brandon, maybe drill down a little bit more. Is there something you could, as we think about, you know, I mean, just say the DIY side to start off. So, how does a consumer that is a loyalty member at Lowe's on the DIY side, how did their behavior compare with someone that's not yet in the loyalty program?
Yeah, so I, I would say, Brian, our, our most loyal customers are gonna shop, you know, 6-8 times a year relative to, you know, smaller frequencies, you know, from, from our other customers. They're gonna have more spend, more repeat visits, higher penetration into programs, you know, like credit. Some of our military customers are some of our most loyal customers. So, you know, again, these are customers that, you know, are taking advantage of the loyalty program. We now, you know, have the ability to see that data, understand that data, harvest that data, and provide, you know, more personalized offers now throughout their purchasing journey, and it's, it's more anticipatory now, right?
When they come in, you know, through that purchase journey, and they, you know, they're purchasing, you know, a faucet for a bathroom remodel, we now have the ability to sort of understand and anticipate what type of project they're engaging in, and maybe paint, you know, is the next category. So we're able to, you know, serve them up a localized and a more relevant offer around a promotion or a tighter price point, as an example like that. So again, those are the areas that we're seeing success, and we're seeing, you know, great traction early on, a couple months in, and excited as to what this can do as we look through the balance of the year.
Brian, really, the most simplistic way to think about this is frequency. At the end of the day, the customers that really adopt to the loyalty program, we're just gonna see them more frequently, whether it's DIY or Pro. And this is the third loyalty program I've had the benefit of rolling out, and it takes a while for the program to become mature. It takes a while for customers to change their shopping habits, but we've been really pleased with what we're seeing over the last 18 months in Pro, and we'll continue to learn and tweak. And the same thing with DIY. It's really early, but to Brandon's point, we're pleased with what we're learning. We're pleased with some of the insights that we're gleaning.
We think that we'll just continue to build, you know, throughout the year and as we continue to make this a more mature program and customers become more acquainted with it.
So Marvin, going back, that's very helpful, and going back to, you know, the comments just about how the business has transformed. I mean, so as you look about, as you look towards the progress from here, are there still key pieces of the infrastructure that need to be built out, or is it more processes?
It's a combination of both. I mean, as I think about what we're most excited about in the future, it's, you know, the continued ability to get more productivity from our space.
Mm-hmm.
You know, we have the luxury of still having opportunity to make our stores more productive. It's one of the reasons why, as we think about, you know, the decision around new stores, you know, and aggressively building new stores versus, you know, capital investments in existing stores to create more space productivity, for us, the opportunity still is in the existing store and the productivity we can gain from that. You know, and as much work as we've been able to to do and the success we've had on the different resets, and the different store layouts, and the brands we've brought on board, we still have quite a bit of opportunity to look at our stores to make them more productive, and so we're just excited about that.
And that's a, that's a very broad statement because that means we're gonna see more efficiency in our omnichannel and the choices we have. That means things like this whole front-end transformation, where we're putting in omni holding space. We're putting in, you know, modern self-checkout. We're able to create more selling space up front. As we look at, you know, different merchandising assortments and expansion, things like pet, you know, which has resonated really well with our customers. Things like rural that I've mentioned, things like workwear. You know, all of these, you know, product choices, you know, we've been testing them, and now we're finding out that we can get these permanent locations that's gonna just continue to give us more of a productive store environment and an online environment.
And then we think about some of the, the things we're doing with our, you know, supply chain and what we've done with market delivery, how we've now created a best-in-class delivery mechanism for appliances. The question is, what's next? If, if appliances can go through that network, and we can do same-day, same-day, next-day, two-day in almost every market in the country, what other big and bulky items can we put within that network? And we're just really excited about online and the omni-channel and, and just being able to create, you know, a seamless connection between digital and physical. So as we think about it, Brian, it's, it's a combination of taking the foundational things that we've already put in place.
We were very purposeful that the first five years was gonna be about really foundational things: IT infrastructure, supply chain, pricing tools, merchandising assortment tools, you know, et cetera. Then now how do you build on those foundational things to create more and more value? That's why when we look for the next 3 to 5 years, as we get out of this macro cycle we're in, we get really excited about the possibilities.
On the pro side, you know, you've talked about, your primary competitor talks a lot about just the still very expansive market share opportunity out there, given the still ongoing fragmentation of the market. So help us understand, as you look at the market share, where is that coming from? You know, and I guess maybe asked another way, as you look at your pro customers today, you know, to what extent is it a function of attracting more pro customers or getting better spend out of your existing customers?
Yeah, so Brian, I would say actually it's both, right? I think when we break down the market, we look at a $500 billion TAM. The small to medium pro continues to be our focus, and we've sized that, you know, at roughly half of that $500 billion, so call it $250 billion. You know, the focus there is on the repair, remodeler, the trades in particular, painters, plumbers, electricians, and then commercial, residential, property management. We feel like that, that's a sweet spot. That's an opportunity for us. That customer continues to prove resilient. Their backlogs are healthy, albeit, you know, smaller projects. They continue to have, you know, access to materials, to labor, and to credit. And, you know, we're looking at that audience really as continuing to be underserved.
We think there's a lot of runway. We have convenience offering, you know, through our stores. Our Lowe's Pro Supply business serves residential and commercial property manager. We believe that has a lot of runway and a lot of room, you know, for us to run. And then we're continuing to build out new and different digital capabilities and fulfillment options, you know, to serve those pros. So as you mentioned, it's a large, fragmented market. We're gonna continue to leverage the existing assets that we have, to lean in, and we've seen great success here over the last several years. But again, think there's a large runway in front of us with that particular customer, in the small to medium segment.
So let me ask that question maybe. So if I'm, if I'm a core Pro customer for Lowe's, and I'm not shopping Lowe's today, where am I shopping?
I mean, it's, it's a really good question because, and to, to Brandon's point, you got a $500 billion, you know, marketplace, and, and of that, we think the small to medium is $250 billion. So it could be a variety of places. It could be a local plumbing supply store, it could be a local electrical shop, it could be online, it could be another brick-and-mortar competitor. It could be a lumber yard, could be a building supply yard, so this is, this is really fragmented. And, and, and oftentimes, our pro customers, you know, specifically the small to medium, I mean, they just, they get into shopping routines, and relationships matter. But what also matters is convenience, and what also matters is brands.
One of the big mistakes that occurred, you know, prior to this management team is that the previous management team did not understand the importance of national brands and brand affinity to pro customers. And they were chasing margin rate, and so they took a lot of national brands on the pro side to try to drive margin rate improvement. What they didn't understand is by doing that, they lost loyalty from certain segments of pro customers. And so we had to go back and do a lot of work to get the Simpson Strong-Tie and the Klein Tools, you know, back in our assortment, and we've been able to do that. And so now we're in a position where we feel really good about the brands that we carry relative to the pro.
We feel good about our ability to price competitively on key commodity, you know, products. And we also believe now that the key for us is going to be about getting maturity in this loyalty program and leveraging our improved fulfillment capabilities, so we can get products to the job site seamlessly for these customers. And those are the things that we're working on, and it's one of the reasons why, to Brandon's point, we think this is an underserved segment of pro that we're taking market share in. And we have been really pleased with the response of our pro customers, even, you know, in this current economic cycle, our pro customer has been really, you know, strong for us relative to the DIY.
Now, your competitor, your primary competitor recently articulated and closed a significant transaction within the pro side. So the question I have for you, Marvin and Brandon, is, you know, do you see from a Lowe's perspective, consolidation within the space in order to continue to build out your pro effort? Are you looking at potential acquisition opportunities as well?
Yeah, so Brian, I would say, you know, we have a business development function that, that we're always looking at opportunities and adjacencies, the ability to accelerate, you know, our total home strategy and core competencies. But at the same time, I would say, you know, our competitor's acquisition doesn't necessarily change our strategy. As I mentioned again, we continue to be laser focused on the small to medium pro, the $250 billion addressable market that's out there, highly fragmented, and those pros, you know, continue to tell us that, that they're underserved. So again, leveraging our existing assets, we think it's a huge runway.
Our ability to take share, both from a sales and profitability standpoint, leveraging again, our existing assets, that's through, you know, loyalty, CRM, expanded digital capabilities around, you know, ability for a customer digitally to schedule a delivery, to have a quote online, schedule a runner into our stores, the expanded assortment that Marvin talked about. Again, those, those are all capabilities that we continue to lean into. And again, what, what we saw with SRS doesn't change our focus and doesn't change our strategy.
Yeah, and I just to be really clear, you know, Brian, we're always gonna consider M&A opportunities that support our Total Home strategy on the Pro and the DIY side, but we're gonna be really opportunistic. We felt strongly that there were foundational things that we had to fix, and there were foundational elements we had to put in place. I mean, we wanted to have a strong supply chain, we wanted to have a solid IT infrastructure, we wanted to have a really good omni and digital presence, and we felt like it was important to have some level of maturity around loyalty programs, both Pro and DIY, and many other things that we've been working on for the last 5+ years. And now that, again, that we've had...
We now have these foundational things in place. We think that we now have the ability to make some strategic investments where they make sense, you know, and where they give us capabilities, or they give us the ability to kind of build on this Total Home strategy. So we'll keep our eyes open, but nothing that's happened, you know, from a competitive standpoint, puts any pressure on us to go out and do something different. We feel really good about our roadmap and our strategy, and again, we're making investments now in anticipation that when we come out of this down cycle, we wanna come out of it with a lot of momentum, and we think we'll be able to do that.
So, Marvin, a moment ago you mentioned brands and, you know, how the, you know, bringing these brands back into Lowe's has been a real key to drive better sales, particularly on the commercial side. Is your suite of brands now where it should be, or are there still pieces you, or, components you want to fulfill or fill there?
Look, we'll never be satisfied, I guess, is the simple answer. But, you know, one of the key pillars of the Total Home strategy is really elevating and really increasing our brand assortment and just the overall value of our brand. So as I said earlier, the previous management team really didn't understand the deep affinity of national brands for pros, and so we had to address that. And so we went, you know, specifically focused on: How do we leverage our quality, you know, national brands to get our pros back? But concurrently, we wanted to make sure that we had a really strong private brand portfolio that was high quality, on-trend, that was affordable, but also that leaned more to brand-agnostic DIY customers, specifically in the core categories.
So when we think about pro, you know, brands that we brought on board that really give us confidence that our brand portfolio is strong enough now for us to compete, are brands like Klein Tools, brands like Simpson Strong-Tie, Little Giant, GRK, SharkBite, and we already had a long-standing relationship with Sherwin-Williams, that we're now only increasing relative to pros who paint and some, you know, painters out there that love and have strong affinity to that brand. But even on the DIY side, you know, we've been able to bring great national brands in outdoor power equipment like EGO and Toro. These brands were not in our portfolio when I arrived here, and so I give the merchants a lot of credit, and we've been able to take a brand like Stainmaster and make it a private brand.
And then we have brands like Kobalt and Allen + Roth that most people don't even realize they're private brands because their brand affinity is so strong in the marketplace. And so the best way for me to answer your question is that we believe today that we have the brand portfolio on the pro and the DIY side that gives us the ability to compete, you know, with any competitor effectively. And now what we're doing is we're building that pricing infrastructure, and we're leveraging, you know, modern data so that we can make sure that we're priced right, and we're priced competitively so we could win, but we can also continue to bring value to the bottom line.
Very helpful. So as our time starts to wind down here, I did want to shift the conversation maybe a bit nearer term, you know, we'll follow up to what we've been talking about. But as you look at, and I'll frame this question maybe a couple different ways, but as we think about, you know, the kind of the nearer term trajectory in the business, you know, maybe on the DIY side, since that's been the softer side, what do you view as the building blocks? What needs to happen in order to sort of say, facilitate a re-strengthening in sales on the DIY side? And then a second question, I guess this would be more geared towards you, Brandon, but as you think about that and the guidance you have laid out there, you know, what's embedded in that guidance for 2024?
Yeah, I would say, you know, Brian, as it relates to the DIY, you know, continue to expect, again, as I mentioned earlier, some ongoing softness as it relates to, you know, DIY bigger ticket discretionary categories. I think we expected that coming into the year. It's largely playing out, you know, in line with our expectations as we moved here, you know, through the second quarter. I think when we look at our seasonal categories, we are very pleased, you know, in Q1 with how we evolved our go-to-market strategy, what we saw resonate with the consumer there. I would say transitioning into Q2, the weather has been a challenge, but where we've seen good weather, in Q2, we've seen those seasonal categories resonate.
So, you know, as it relates to DIY, I mentioned earlier, too, continuing to see some levels of strength as promotional pressure has eased within appliances. We're seeing some unit bounce back, especially in refrigeration, refrigeration and freezers. Obviously, full-size grills is another category where we've seen some momentum here seasonally in Q2. But just as we approach the guide in the back half, we're not expecting any change in the macro environment, where we continue to expect pro to run strong for us there.
As we look at the back half of the year, the promo pressure, that, that's pressured average ticket and appliances starts to ease in the second half, and more of the same from a macro standpoint, so that gives us, you know, a high degree of confidence, you know, in our full year outlook and our ability to, on an absolute basis, kind of deliver, you know, positive comps over the second half of the year and a more balanced, you know, transaction and ticket as we start to transition and look at the second half of the year.
Brian, again, and I'll kind of repeat what I've said a couple of different times, if I could just put a headline on what our focus is. So first, we're working to manage the business well, you know, in a down housing market where we have some level of DIY pressure on big ticket discretionary. So we're really focused on managing the business in the near term really well to make sure that we can deliver top and bottom line performance relative to the market that we're in. But equally as important, we're making aggressive investments, you know, in our overall business, whether that's in-store investments, online investments, technology, supply chain, and the like, so that we will be well positioned when this cycle changes, because as you know, every economic cycle is just that. It's a cycle.
It goes up, and then it comes back. And we're working hard to make our own forecast on what comes back first, so that we can be positioned really well to take advantage of the recovery. And that's what we're really focused on, running the business in the here and now, and planning for the future, positioning ourselves for long-term growth. We're really confident in our ability to do that. This is not an easy environment to operate in for any big retailer, but we feel like that we have a great team, we have the right focus, and we're gonna be able to compete well and take share in a down environment.
That's very helpful. So it looks like we have one minute left. Is there anything that we did not discuss that we should have discussed here, that you want to make sure we get out to the audience?
Look, I think Brandon said it. As we, you know, work our way through the second quarter, get to the second half of the year, I mean, we have basically seen everything we expected. We think that the comparisons get easier in the second half of the year. So as we think about our guidance that we laid out in February, we still feel confident in that overall annual guidance because the back half of the year, the comparisons are easier for us, and we think that's gonna give us the ability to just continue to execute at a really high level.
So again, we feel great about the team we have in place. We're focused on executing our total home strategy, and we're driving our perpetual productivity improvement initiatives, and we have a capital strategy that has served us well, and we're gonna be really disciplined around that. So as tough as this environment is, we're excited to come to work every day because we know that we made great investments that have yet to pay off. But when this cycle changes and turns, we know that we're gonna be, you know, on the right side of that trajectory, and we're gonna hopefully create a lot of value in the future.
Marvin, Brandon, Kate, we, as always, very much appreciate your time. You know, congratulations on the continued success here as you manage through a difficult environment. So thank you.
Thank you, Brian.
Brian.
Thank you.