William P. Boltz
Executive Vice President, Merchandising at Lowe's Companies
Thanks, Marvin, and good morning, everyone.
In spite of a challenging home improvement backdrop in Q1, we are pleased with our early spring sales as customers responded to our strong spring assortment and compelling offers. And our approved brand and service offerings resonated with our Pro customers, which led to positive broad-based Pro comps across all three geographic divisions.
This year, our SpringFest strategy went more local than ever by using weather-triggered digital marketing as the spring season broke across different regions. In Q1, we also introduced sneak peeks for SpringFest, featuring doorbusters that were focused on driving traffic into our stores and online, with targeted offers with seasonally relevant categories, such as soils, mulch, and live goods. Winning the customer with these early seasonal purchases is important as they will often come back multiple times throughout the spring for the remainder of their outdoor project needs.
Now turning to our results in hardlines. These marketing efforts, paired with the right brands and strong execution, helped us deliver positive comp sales on a one-year and two-year basis in lawn and garden. Growth was driven by smaller ticket projects in landscape products and live goods, which resulted in increases in both comp sales and transactions in these categories.
We are also pleased to be gaining traction with our own Sta-Green private brand, as customers have responded to the quality and the value offered in these lawn and care products. And Sta-Green helps provide the consumer with a beautiful lawn that they can be proud of at a price that won't break the bank. For the first time this spring, customers can also purchase select plants and live goods online and have them delivered through lowes.com. Garden products are already some of the most searched items on our website, and now customers can conveniently shop for what they need and even order them from their backyard.
And as Marvin mentioned, we are excited about our powerful new spring outdoor power equipment lineup as we introduced Toro to our lineup this year. Lowe's now offers the largest selection of Toro products of any national retailer with innovations like SmartStow, which allows owners to store their mower upright, reducing the storage footprint by up to 70%, including patented Briggs & Stratton technology so it doesn't leak oil when stored in this position, and with Personal Pace, a best-in-class self-propelled system that propels the mower at the speed the user is walking. We added these innovative Toro products to an already unmatched brand arsenal, which included EGO, SKIL, Kobalt, Husqvarna, CRAFTSMAN, and John Deere. These strong brands helped us deliver positive comp sales in both gas and battery-powered walk-behind lawnmowers, as well as handheld outdoor power equipment.
Now shifting gears to building products. Our Pro customers remained busy, which supported positive comps in building materials with strength in roofing, concrete and block, drywall, and insulation, all helping to fuel that growth. Our added focus on inventory depth and improved in-stocks, along with our localization efforts with tailored assortments to the market, continue to give Pro customers the confidence that Lowe's will have what they need to complete the job. Repair and maintenance categories, such as water heaters, also continue to perform well, especially with innovative products like A.O. Smith's 120-volt plug-in heat pump water heaters. These ENERGY STAR certified models plug into a standard wall outlet for easy installation, and can save homeowners over $600 a year in utility bills compared to a standard electric water heater.
In electrical, we are pleased with the performance of Klein Tools, the number one tool brand for the electrical and HVAC professional. New products like the Klein Circuit Breaker Finder make it easy for electricians to quickly identify which breakers and outlets are connected to the breaker panel without turning the breaker on and off. The introduction and expansion of brands like Klein Tools not only drive sales, it also allows us to rebuild the credibility with our Pro customers.
Turning to home decor, where softer demand and DIY bigger ticket interior categories like flooring, kitchens and bath, and appliances persisted. Trends in these categories were largely in line with the results we saw in the second half of last year. Our customers continue to look for value, especially given the persistent inflationary pressures, and our private brand products provide them with both value and style as they look to refresh their homes.
Products like our Allen & Roth Harlow kitchen faucet, which is simple to install with three easy steps, and what is really unique, you don't have to go below the sink to install it. Our STAINMASTER Pet Protect carpet with LeakDefense backing helps prevent spills and keeps pet accidents from seeping through to the rug pad or subfloor. STAINMASTER is the most trusted brand in carpet and is exclusive to Lowe's.
Turning to appliances. We are expanding our market share as we continue to lead the industry with the broadest assortment, compelling values, and fast and convenient delivery, supported by our market delivery model, which creates a best-in-class fulfillment solution, including next-day delivery in most markets, which is an important option for a customer replacing a broken appliance. Average selling prices remain pressured as we cycle the reintroduction of pre-pandemic promotions across the industry, as well as the continued slowdown in discretionary demand. Despite these near-term challenges, our appliance suppliers continue to improve selection with innovation and amazing new products. A great example is the Lowe's exclusive GE freestanding range with EasyWash, a range with a first-of-its-kind removable oven liner that is dishwasher-safe, making for easy cleanup.
Moving on to merchandising productivity. Our teams are continuing to execute against our extensive Perpetual Productivity Improvement, or PPI, road map. This quarter, I'd like to highlight the productivity benefits of one initiative, the progress we've made in expanding our private brand penetration. The core focus of our private brand strategy is to offer our brand-agnostic DIY customers with style and quality at a great value. Not only do these products provide this for our customers, the product margin rates for our private branded products are typically significantly higher on average compared to the national brand counterparts. As we build out a compelling private brand portfolio from Allen & Roth decor products and STAINMASTER products within flooring and paint, to Sta-Green lawn care products, to Kobalt tools, outdoor power equipment, and storage solutions, we are delivering value to the DIY customer and productivity to the bottom line.
As I close, I'd like to extend my appreciation once again to our vendors for their ongoing partnership, in particular their support of our Merchandising Services Team. Our 30,000 MST associates keep our shelves stocked, execute resets, and enable our red vest associates to spend more time serving our customers. We allocate 100% of our MST funds into this program and are pleased with the impact it is having on our customer experience and associate productivity. And I'd also like to thank our merchants for their hard work and dedication as they navigate this dynamic macro environment.
Thank you, and I'll now turn the call over to Joe.
