Good morning. Welcome to Lowe's 2026 Annual Shareholders Meeting. Please note that the company is recording this meeting for replay, and attendees are not permitted to use any device to record the meeting. I'll now turn the call over to Shelly Hubbard, Vice President of Investor Relations.
Thank you and g ood morning, everyone. Here with me today are Marvin Ellison, Chairman and Chief Executive Officer, and Juliette Pryor, Chief Legal Officer and Corporate Secretary. I would like to begin by reminding you that the presentation following today's meeting includes forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. Additional information about this is included in the meeting materials available on your screen. Additionally, the presentation includes certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP is available in the Quarterly Earnings section of our investor relations website. With that, I'll turn the meeting over to Marvin.
Thank you, Shelly. Good morning, everyone. As Chairman of Lowe's Board of Directors, I'm pleased to welcome you to Lowe's 2026 Annual Shareholders Meeting. To begin the meeting, I'd like to introduce the director nominees in addition to myself who are standing for election at today's meeting. Mr. Raul Alvarez, Mr. Scott Baxter, Ms. Sandra Cochran, Ms. Laurie Douglas, Mr. Richard Dreiling, Mr. Navdeep Gupta, Mr. Brian Rogers, Mr. Bertram Scott, Mr. Lawrence Simpkins, Ms. Colleen Taylor, and Ms. Mary Beth West. I'd also like to note that Ms. Kate Fisher from the independent accounting firm of Deloitte & Touche is on the call. She will be available to answer your questions in the Q&A session of the meeting. Mr. Victor Latessa of C.T. Hagberg & Associates is also joining us on the call today.
Mr. Latessa has been appointed Inspector of Election for this meeting and will assist with the tabulation of proxies and ballots. As your ballots and proxy cards indicate, Brandon Sink and Juliette Pryor, who is our Corporate Secretary, have been duly appointed as proxies for this meeting. At this time, I officially call the meeting to order. Juliette, please outline the process for today's meeting.
Thank you, Marvin. We will begin the meeting with the formal business portion. This consists of the election of the director nominees named in the proxy statement, approval on an advisory basis of the compensation of the company's named executive officers in fiscal year 2025, ratification of the appointment of independent auditors for fiscal year 2026, and consideration of the three shareholder proposals listed in the company's proxy statement for this annual meeting, if they are properly presented. After we complete the formal portion of the meeting, Marvin will provide a brief business update. We will then open the floor for questions, and we will use the time remaining to answer questions that shareholders submitted before and during the meeting. Shareholders who have logged into the web portal for the meeting using their control number may submit their questions in the portal.
Please refer to the meeting rules of conduct posted on the web portal for additional guidance regarding the procedures for the meeting and the question- and- answer session. A replay of this annual meeting will be made available on our investor relations website following today's meeting. Notice of the Annual Meeting of Shareholders of Lowe's Companies, Inc has been provided to shareholders of record as of March 23rd, 2026. The notice and accompanying proxy statement were mailed to shareholders beginning on April 16, 2026. As of the date of record, there were 560,062,893 shares of common stock outstanding, of which 503,954,626 shares are represented on the call today, either online or by proxy. Therefore, we have a quorum and may proceed with the formal business portion of the meeting. The polls are now open and will close after the presentation of the last proposal.
If you have already voted, you do not need to vote again during the meeting unless you wish to change your vote. As provided in the Notice of the Annual Meeting of Shareholders, the purpose of this meeting is to address the following items of business. First, elect 12 directors to a term of one year. A description of the nominees' qualifications to serve as a director is included in the proxy statement. Second, approve on an advisory basis the compensation paid to the company's named executive officers in fiscal year 2025. Third, ratify the appointment of Deloitte & Touche as the company's independent registered public accounting firm for fiscal year 2026. Fourth, consider and vote on the shareholder proposal requesting an independent board chairman, if properly presented.
Fifth, consider and vote on the shareholder proposal requesting report describing how the company could disclose its plastic packaging footprint, if properly presented. Sixth, consider and vote on the shareholder proposal requesting report on risks of sharing customer data with third parties, if properly presented. Each of the first three items were proposed by the company, and the board recommended voting for each of them.
With regards to the fourth item of business, to consider and vote upon the shareholder proposal submitted by Mr. John Chevedden. Mr. Chevedden will now have three minutes to present the proposal. Operator, please open the line for Mr. Chevedden.
Mr. Chevedden, your line is now open.
Hello, this is John Chevedden. Proposal four, independent board chairman. Shares request the Board of Directors adopt an enduring policy, amend the governing documents, including the corporate governance guidelines, in order that two separate people hold the Office of Chairman and the Office of CEO as soon as possible. The chairman of the board shall be an independent director; a lead director shall not be a substitute for an independent board chairman. The board shall have the discretion to select an interim chairman of the board, who is not an independent director, to serve while the board is required to seek an independent chairman of the board on an accelerated basis. An independent board chairman at all times improves corporate governance by bringing impartiality, objective oversight, and external expertise to board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence.
An independent board chairman could help Lowe's deals with the long-term poor performance of Lowe's stock. Lowe's stock was at $263 in 2021 and is at only $217 now in spite of a robust stock market. Please vote for an independent board chairman, proposal four.
Thank you, Mr. Chevedden. After careful consideration of the proposal, our board recommended voting against this proposal. With regards to the fifth item of business, to consider and vote upon the shareholder proposal to be presented by As You Sow. On behalf of the proponents, Mr. Conrad MacKerron will now have three minutes to present the proposal. Operator, please open the line for Mr. MacKerron.
Mr. MacKerron, your line is open.
Good morning, Mr. Chairman, board, and investors. My name is Conrad MacKerron, and I am representing As You Sow, the filer of proposal number five. Fellow shareholders, I urge your support for this proposal asking Lowe's to disclose its plastic packaging footprint and set overall reduction goals. Our case rests on three points: the science, the money, and the performance gap between Lowe's and its competitors. First, the science. The Pew Charitable Trusts Breaking the Plastic Wave report, an authoritative study in the field, concludes that without action, annual flows of plastic to land, air, and water will more than double by 2040, reaching 280 million metric tons a year. Half of today's 130 million metric tons of plastic pollution is packaging. The same report finds that reductions in use, redesign, substitution, and innovative reuse could cut packaging pollution by 97% by 2040. The path there is clear.
What is missing at our company is the commitment to walk that path. Second, the money. Governments around the world, from Canada to the European Union to seven U.S. states, have enacted extended producer responsibility laws that shift the cost of packaging waste back onto the companies that create it. The World Economic Forum estimates the global exposure to companies at $100 billion if these policies continue to spread. That is not a hypothetical. That is a balance sheet item, and Lowe's has not told us what its share of that risk looks like. It could start by disclosing its current plastic packaging footprint. Shareholders cannot price a risk that management has not quantified. There is a product safety concern as well. Lowe's still sells many products packaged in harmful polyvinyl chloride or PVC. Vinyl chloride used to make PVC is a human carcinogen linked to several kinds of cancer.
PVC is not curbside recyclable. It often ends up incinerated, which can result in cancer-causing dioxin emissions. The company has phased out most PVC from its own private label packaging, which is a positive step, but has set no goal for phase out by suppliers of the name-branded PVC packaging it sells. Third and finally, the competitive gap. Walmart has disclosed its plastic use and has set reduction goals. Target has done the same. Lowe's has not. Lowe's is also absent from membership in The New Plastics Economy Global Commitment, which is the largest pre-competitive corporate initiative on reducing plastic pollution. What this proposal asks for is modest and reasonable, a report describing how Lowe's could disclose its plastic footprint and set reduction goals. It does not dictate strategy. It does not bind management's hands.
It asks the board to study and report on a question some of its largest competitors have already answered. A vote for proposal five is a vote for measurement, transparency, and prudent risk management. I urge your support. Thank you.
Thank you, Mr. MacKerron. After careful consideration of the proposal, our board has recommended voting against this proposal. With regards to the sixth item of business, to consider and vote upon the shareholder proposal submitted by the AFL-CIO Reserve Fund. Operator, please play the recording for proposal six.
Hello, my name is Casey Hudak. I am here today on behalf of the AFL-CIO Reserve Fund. I am a union member, and I live in Minneapolis, Minnesota. I hereby introduce shareholder proposal six that urges the Board of Directors to issue a report assessing risks to customers' data privacy rights arising from the company's sharing of sensitive customer data with third parties, and describing any strategies beyond legal compliance the company may deploy to mitigate those risks. I lived through President Trump's immigration enforcement crackdown in Minnesota. I saw firsthand how the heavy-handed tactics of ICE agents created fear in immigrant communities and across our entire state. Thousands of workers' families, including children, were violently detained and separated from their loved ones. Many more thousands of union members and other workers stayed home for months out of fear for their safety.
Hundreds of Minnesotans remain in prison camps in Texas and New Mexico. Witnessing what unfolded was the most horrific experience of my life. We need safeguards to ensure that the data shared with law enforcement by companies like Lowe's is not improperly used to violate the civil rights of immigrant workers and their families. While we strongly agree that our company must comply with all lawful subpoenas for data, we also believe that our company's data collection and data sharing policies should align with the data policy expectations of our company's customers and employees. For example, our company uses automated license plate recognition system from a company called Flock Safety to monitor its parking lots. Civil liberty groups have expressed concern that this type of data collection can be used for mass surveillance.
Our company voluntarily shares this license plate data with various law enforcement agencies who can access data on our company's customers without a judicial warrant. We are concerned that our company's license plate reader data could be used for controversial immigration enforcement purposes, as we saw in Minneapolis earlier this year. Many state and local law enforcement agencies have entered into partnerships with U.S. Immigration and Customs Enforcement that are known as 287(g) agreements. Our company's customers, including U.S. citizens and legal immigrants, may be fearful of patronizing our company's stores due to fears of being racially profiled or otherwise caught up in ICE immigration raids. Others may simply be uncomfortable that their license plate data is being shared with law enforcement without their knowledge or consent. This is not a theoretical concern.
In the May of 2025, U.S. Homeland Security Advisor Stephen Miller reportedly directed U.S. Immigration and Customs Enforcement officials to target its raids at The Home Depot and other retail stores where day laborers typically gather for hire. In December of 2025, border patrol agents reportedly detained immigrant day laborers at one of our company stores in New Orleans.
Thank you. After careful consideration of the proposal, our board has recommended voting against this proposal. We have not received notice under our bylaws of any other items to be considered, so no other business is expected to be conducted today. This concludes all matters presented for shareholder consideration at this meeting. If you have not already voted, you can do so now by clicking the Vote Here link in the virtual meeting website and following the instructions. I will pause for a moment so anyone wishing to vote can submit their vote. The polls will be closing shortly. The polls are now closed. I have received the preliminary report from the voting inspector on the shareholder votes on each of the matters presented. Based upon the vote of shareholders, all nominees to the Board of Directors are elected.
The advisory vote on compensation paid to the company's named executive officers has been approved. Deloitte & Touche is ratified as the company's independent public accountant for fiscal year 2026, and the three shareholder proposals did not receive sufficient support. Please note that the final voting results will be reported on a Form 8-K to be filed with the SEC within four business days. This concludes the business portion of the meeting, and I will now turn the meeting back over to Marvin.
Thank you, Juliette. The formal portion of the meeting is adjourned. Now, I'd like to spend some time providing you with an update on our company's performance. We're pleased with the execution and performance of our company, delivering solid performance in 2025 despite ongoing challenges in the housing macro environment. Total sales was $86.3 billion with positive comparable sales of 0.2%. We maintain a disciplined focus on expense management, which continues to be a hallmark of our leadership team. We also advance our use of emerging technology to enhance the customer and associate experience and improve operating efficiency. These efforts helped us deliver adjusted operating margin of 12.1% and adjusted diluted earnings per share of $12.28. In 2025, we returned $2.6 billion to shareholders through dividends, reinforcing our commitment to sustainable shareholder value.
I'm also pleased to announce that our Board of Directors approved a 4% increase in Lowe's quarterly dividend this morning from $1.20 per share to $1.25 per share. This reflects the board's confidence in our strategy and in our ability to navigate near-term uncertainty while investing for long-term growth. Our financial results are a demonstration of the effectiveness of our Total Home Strategy, which we continue to execute to drive long-term shareholder value. This strategy is designed to meet the evolving needs of our customer, and we're making progress on each of our key initiatives: driving Pro penetration, accelerating online sales, expanding home services, creating a loyalty ecosystem, and increasing space productivity. I'll outline how we are executing against each of these pillars. Let's start with how we're serving our Pro customer.
In 2025, we delivered another year of positive comparable sales in Pro, focusing on the national brands that Pros trust and driving continued growth in My Lowe's Pro Rewards loyalty program, which is designed specifically for the small to medium-sized Pro. Also in 2025, we strengthened our Pro position by expanding into a $250 billion total addressable market for large Pros through two strategic acquisitions. In June, we acquired Artisan Design Group, or ADG, a leading nationwide provider of design, distribution, and installation services to national, regional, and local home builders and property managers focused on interior surface finishes like flooring, cabinets, and countertops. In October, we acquired Foundation Building Materials, or FBM, a leading distributor in drywall, metal framing, ceiling systems, and commercial doors and hardware
FBM serves a broad customer base across both residential and commercial construction, with a strong presence in single-family, multi-family, new construction, and repair and remodel builds. Together, the acquisitions of both FBM and ADG strengthens our ability to serve Pro customers across all project sizes. By bringing these capabilities together, we are creating a more comprehensive interior solutions for home builders, with everything from drywall to insulation, to doors, flooring, cabinets, and appliances. Analysts recently estimate that more than 12 million new homes will be needed over the decade in the United States, and we are now well-positioned to capitalize on the expected housing demand. Now, let me turn to online sales, which represents 13% of our total retail sales. By offering a more immersive shopping experience and flexible options for fulfillment, we drove increase in traffic and conversion and delivered online sales growth of 8.8%.
To help customers navigate complex home improvement projects, we introduced our AI-powered virtual advisor, Mylow, on our mobile app and lowes.com. Mylo w provides guidance, simplifies decision-making, and connects customers directly to products that they need. Additionally, we're pleased by the continued expansion of our online marketplace, which allows us to extend our assortment across a full range of price points and offer customers everything they need for their homes. Now , shifting to home services. We delivered high single-digit growth in the second half of the year, reflecting our focus on simplifying the customer journey through technology-enabled solutions. From scheduling to quoting to installation, we're making the process more seamless and intuitive. These improvements position us to better serve the do-it-for-me customer with convenient and cost-effective solutions. I'll now discuss our loyalty ecosystem.
Our MyLowe's Rewards and My Lowe's Pro Rewards programs are helping us create more personalized experiences and strengthen our long-term customer relationships. Today, we have more than 30 million members, and they shop twice as often and spend over 50% more than non-members. Through these two programs, we're gaining valuable insights that allow us to deliver more relevant, data-driven offers, all of which is helping us increase customer engagement and drive repeat purchases. Now, turning to space productivity. In 2025, we made significant progress toward optimizing our in-store assortment, reducing our SKU count by approximately 15% and creating space for high-velocity products. We also expanded our rural assortment to additional stores, bringing the total to nearly 500 locations. We introduced new category experiences, including workwear showrooms and pet grab-and-go assortments to 1,000 stores. These initiatives are helping us improve productivity while better meeting the needs of our customers.
Before I close, I'd like to spend a moment on our brand reputation and community investments. We're pleased that our efforts continue to be recognized externally. Lowe's ranked as the number one specialty retailer on the Fortune's World's Most Admired Companies list, and we were recently certified as a great place to work for the third year in a row. Last year, our work to improve communities yielded 10 million sq ft of positive impact. This includes our ongoing efforts to create safe, affordable housing, respond to disasters, and revitalize communities. Earlier this year, we expanded our commitment to developing the skilled trades workforce fivefold with a plan to invest $250 million to help train and develop 250,000 tradespeople by 2035.
This reflects both our commitment to supporting the communities where we operate and our dedication to addressing our country's urgent need for more skilled labor. In closing, I'd like to thank our frontline associates for their continued dedication. Visiting stores on a weekly basis across the country is one of the favorite parts of my job, and I continue to be inspired by our associates' commitment to serving our customers and our communities. They remain the driving force behind our performance and our current and future success. That concludes the business update. I'll now open the question- and- answer period.
Thank you, Marvin. We will address as many questions as possible within the time available today. If we do not get to your questions, we will post answers to unanswered questions on the investor relations page of our website. We also encourage you to contact Lowe's Investor Relations at investorrelations@lowes.com. If a shareholder has a question, please enter it in the Ask a Question box on the website. Also, we have received a number of similar questions. In the interest of time and to answer as many questions as possible, we will combine similar questions together. Our first shareholder question is: What is the long-term strategy to grow the business? What are the business growth objectives for 2026 and 2027?
Well, thank you for the question. Our Total Home Strategy outlined in my prepared remarks will really guide our future growth. Initiatives are designed to help us grow with our Pro, DIY, and do- it- for- me customers. Our acquisition of ADG and FBM also allows us to enter into a larger Pro total addressable market that we're very excited about. In terms of technology, we've established a framework to help us harness the power of generative AI to enhance how we sell, how we shop, and how we work. We believe if we execute these areas of focus well, confident that we'll continue to grow our business, enhance our growth, and profitability overall as a company.
Our next shareholder question is: What steps are being taken to address service levels in the stores during off-peak hours?
Thank you for that question. Customer service is and will always be an essential part of our business. We're very pleased with the execution in our stores, and we are pleased to see our customer satisfaction scores continue to improve each year. As we look ahead, we remain committed to investing in the right staffing, the right technology, and making sure we're improving the processes in our stores to drive more efficient operations. Our goal is simple. We want to improve the customer and associate experience on a continued basis, and we're committed to doing just that.
Our next shareholder question is: Can Lowe's commit to improving communities through full-time employment, better pay and benefits instead of feel-good look at me programs?
This is something that's really important to us as a company. We believe quite simply that a good job starts with good pay. We frequently monitor and adjust wages at a market level to ensure that we remain competitive. I'm proud to say, since I became CEO in 2018, we've made strategic investments in growing incremental wages and share-based compensation for our frontline associates totaling more than $4 billion. We also offer comprehensive benefit packages and very competitive bonuses. This includes a quarterly profit-sharing bonus for our frontline associates, stock grants for assistant managers and store managers, and a 10% discount every single day for all of our associates.
One recent example of sharing in the success of the company with our associates is a discretionary bonus of $125 million that we awarded at the end of the fourth quarter of 2025. We awarded this bonus to our dedicated frontline associates for their outstanding performance in contributing to the company's success in that quarter. This included our assistant managers, department supervisors, and hourly associates in our stores and our distribution centers. These are the associates that needed it more than any other associates. Regarding our support of the community, the Lowe's Foundation recently announced a $250 million investment to help train and develop approximately 250,000 individuals as part of the next generation of skilled tradespeople. This reflects our commitment to our associates and the communities where we live and where we work.
Our last shareholder question is: How has The Home Depot continued to increase their stock price, but Lowe's has not during the past year?
Well, thank you for the question. Since 2018, that's the year I started as CEO, our share price has more than doubled in tandem with the transformation that we've undertaken around our Total Home Strategy. During the same time frame, we've consistently paid and raised our dividend each year to return value to our shareholders. In this past year, the share price has fluctuated with macroeconomic conditions, but it also reached an all-time high in February of 2026, which we believe is a significant achievement given the macro backdrop and the overall downturn we've seen in the home improvement sector. In addition, our stock prices outperformed many of our peers in home improvement by more than 10 percentage points when you compare one year ago. We're pleased with that.
We also believe that if we continue to give our associates a great place to work, offer our customers great service and a wonderful value, and make the communities where we live and work better, we will continue to deliver value to our shareholders.
Thank you for your questions. That concludes our question- and- answer session. We appreciate your attendance and participation.
Today's conference has concluded. Thank you for joining us.