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Since 2018, we've invested over $3 billion in incremental wages and share-based compensation for our frontline associates, including increasing associate wages by over 20%. And as we mentioned at our December Analyst and Investor Conference, we are committed to additional frontline wage investments over the next several years, which are contemplated in our long-term targets. These compensation investments are just one reflection of our commitment to becoming the employer of choice in retail, which Joe will discuss in more detail. Throughout the quarter, we continued to gain traction with our Total Home strategy as consumers remain engaged in home-related activities. In Pro, we delivered US growth of 10% and 36% on a two-year basis. We are capitalizing on our momentum with our Pro by growing our MVPs, Pro Rewards and partnership program, building relationships through our CRM tool and continuing to enhance our product assortment to meet Pro needs.

One example of enhancing our Pro product assortment is the exciting news that Klein Tools will be coming back to Lowe's. We know that our Pros are fiercely loyal to certain national brands and Klein is the number one hand tool brand among electrical and HVAC professionals. This creates immediate credibility across trades. Bill will share more detail on this exciting addition to our assortment later in the call. Now, one question many of you have asked is about our Pro backlog and if they're still healthy. We're in constant communication with our Pros through formal surveys, our Pro counsel and countless day-to-day conversations. In our January survey, more than 70% of Pros stated that they were booked out the same or more compared to 2022, and they remain confident in their ability to find jobs and hold on to their backlog.

We believe this dynamic is being fueled by all the things we talked about at our December Analyst and Investor Conference, which includes homeowners with strong balance sheet and record levels of equity. On Lowes.com, sales grew 5% on top of 11.5% growth in the fourth quarter of 2021, partly due to strong appliance sales. This represents a two-year comp of 17% and more than 11% sales penetration. We continue to remove friction from the customers' online experience, which includes adding Apple Pay this quarter to improve conversion. We're also focused on removing friction from our customers' omnichannel shopping journeys, like for appliances where customers often shop our showrooms before making their purchase online. We also continue to make strides in the rollout of our market delivery model for appliances and other big and bulky products.

We added two new geographic areas this quarter, bringing us to 10 geographic regions across the country supporting more than 1,000 stores. And as a reminder, in the market-based delivery model, big and bulky products flow from our supply chain directly to customers' homes, replacing our inefficient store delivery model. This delivery model is enabling us to further consolidate our industry leadership position in appliances and it positions us for profitable growth and other big and bulky product categories like grills, riding lawn mowers and stock cabinets. Turning to Canada. We completed the sale of our Canadian retail business to Sycamore Partners this quarter. As a result, we are now solely focused on the transformation of our US business, where we estimate we have a $1 trillion addressable home improvement market, enabling us to invest more into higher-return opportunities to grow our business and to take market share.

I'd like to extend my appreciation to the entire Canadian team for their commitment to serving our customers, and I wish them the best as they move forward under new ownership. Before I close, I'd like to share my perspective on the home improvement market. And as you know, there is a wide range of conflicting opinions on what's going to happen in the macro environment in 2023. From our perspective the core drivers of our business, disposable personal income, home price appreciation, and the age of housing stock, remain supportive. Consumer savings are still roughly $1.5 trillion higher than pre-pandemic, with 85% concentrated in the top 40% of income owners who are more likely to be homeowners. Homeowners continue to enjoy record levels of equity in their homes, nearly $330,000 on average.

Even if there is a modest decline in home prices, the level of equity built up during the pandemic would not be meaningfully eroded. And the housing stock continues to age with 50% of US homes over 41 years old, the oldest since World War II. These factors, along with strong millennial household formation, baby boomers' increasing preference to age in place, and more widespread remote work will continue to be tailwinds for our business. And given the slowdown in housing turnover is driven by higher rates and low supply rather than demand, we continue to see a nationwide trend of trading up in place with consumers opting to upgrade their existing home to meet their evolving needs. All of these dynamics give us confidence in the medium and longer term outlook for the industry.

That being said, we also know that consumers are wary of a potential recession, which is reflected in some of the discretionary pullback we experienced during the holiday season. We're closely monitoring trends and we have a proven playbook to pivot quickly if the macro softens. Our results in the fourth quarter demonstrate our operational agility, which is reflected in our ability to leverage expenses and deliver productivity in a negative comp sales environment. This gives our experienced leadership team confidence in our ability to effectively manage the business in a wide variety of macro scenario. In closing, I'd like to thank our frontline associates for their commitment to serving customers day-in and day-out. As I travel to country every week visiting stores, I continue to be impressed by their passion for helping customers and their communities.

And with that, I'll turn the call over to Bill.

Bill Boltz: Thanks Marvin and good morning everyone. In the fourth quarter, US comparable sales decreased slightly by 0.7%, though sales were up 34.4% on a three-year basis, reflecting continued momentum with the Pro and resilience in core DIY home improvement demand. We delivered positive comps in Home Decor, fueled by key categories like appliances, paint, and kitchen and bath. And we delivered strong growth in our Building Products division, excluding the impacts of commodity deflation. We are particularly encouraged by the Pro strength we're seeing across categories, including rough plumbing, building materials, paint, and millwork as we continue to expand our product and service offerings to meet their needs. And consistent with our Total Home Strategy, we continue to add brands relevant to Pros, including four new partnerships.

First, we're adding a portfolio of drinks from Coca-Cola to reduce the number of stops Pros make before going to the job site, which is important since time is money for these customers. Second, we are adding Carhartt Apparel that's popular with both our Pro and our DIY consumer, especially in our rural stores. Third, we have entered a new national partnership with Hubbell, giving us access to all of their pro-branded electrical boxes, including Bell, TayMac and RACO. And fourth, we are excited to be bringing back Klein Tools. As Marvin mentioned, this is the number one hand tool brand among electrical and HVAC professionals. So, this is just a big deal for us and our Pros. We are also really excited to announce that Lowe's will offer the widest selection of client products anywhere in the home improvement retail channel, which will be available in the second half of 2023.

Our initial selection of client tools will include hand tools and electrical test and measurement tools, followed by a multiyear rollout of new product innovations. Klein Tools, Hubble, Carhartt and Coca-Cola are strong additions to our Pro brand arsenal, which already includes other great brands like Bosch, DEWALT, Eaton, Estwing, FastenMaster, FLEX, GRK, ITW, LESCO, Little Giant, Lufkin, Mansfield, Marshalltown, Metabo, SharkBite, Simpson Strong-Tie, Specs, Spider and Werner. As we gain momentum with the Pro, we continue to see brands come to Lowe's and in many cases, come back to Lowe's because they recognize our newfound recommitment to the Pro and see the opportunity to grow with us. Shifting to our merchandising division performance for the quarter.

In home decor, appliances, paint and kitchens and baths led the way. Appliances grew across both Pro and DIY as we continue to gain market share in this critical category. Growth was bolstered by our new instant savings capability that automatically applies supplier rebates to a customer's order, making it much easier and faster for them to take advantage of these offers, which are supported by the manufacturer. This replaces our cumbersome mail-in rebates with real-time savings, both in stores and online to remove friction for the customer and improve conversion. This innovation is another example of Lowe's leapfrogging the competition with technology that not only improves the customer experience, but also drives labor productivity. Paint was another standout category with solid pro growth fueled by our MVP's Pro Paint Rewards and Pro Job Site Delivery.

We're also seeing an uptick in paint attachments items like applicators, paint sundries and caulk as we upgrade our paint departments across our stores. This upgrade is strategically designed to make it easier for our customers to get everything they need in one trip. We also began the launch of STAINMASTER paint, a high-quality, high-value solution for busy families looking to protect their walls from fingerprints and other messes. This is Lowe's first-ever private brand paint and early results are already outperforming our expectations. Our focus on driving private brand penetration is well timed enabling us to capitalize on the nationwide trend of increasing customer preference for private brands. Another category that outperformed this quarter is kitchens and bath.

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We were particularly encouraged to see a strong increase in demand for custom cabinets driven by improved lead times as well as an expanded suite of digital tools, along with our team of talented virtual designers, all of which help our customers tailor the right solutions for their budgets and design preferences. Turning to the Building Products division, we delivered strong broad-based growth, excluding the impacts of commodity deflation across copper and lumber, we delivered strong positive comps across rough plumbing, building materials and millwork driven by Pro demand and continued DIY investment in the home. Our performance in hard lines was consistent with broader consumer trends as we saw a decrease in holiday gift buying compared to the prior year.

However, the team still delivered a solid holiday season with sell-throughs above 2019 levels. As expected, consumers reverted to more typical holiday buying patterns as compared to last year when we saw a widespread early buying due to supply chain concerns. As we look ahead, we continue to build on our customers' preference for new and innovative products with continued enhancements to our product assortments. We are expanding on our popular Kobalt 24-volt platform with new tools and technology that customers have been asking for, including a Cordless Kobalt Nailer that can instantly fire 1,100 nails on a single charge, eliminated the need to drag an air compressor and a hose around the job site. We're also excited about our new EGO Zero Turn Radius Mower with the industry's first e-STEER technology.

With the sleek intuitive steering wheel that increases the driver's control and precision, powered by the EGO battery system that now allows this unit to mow three acres on a single charge. We are ready to capitalize on spring with the best in-stock positions that we've had in three years, right on time to support our biggest selling season of the year, in addition to an enhanced assortment and strong in-stock levels. We're also making strides in driving merchandising productivity as part of our enterprise-wide perpetual productivity improvement initiatives. As one of the larger importers in the US, we continue to leverage our scale and carrier relationships to secure capacity and reduce our import and domestic transportation costs. As the cost of transportation and raw materials come down, we are working with our suppliers to ensure that our prices are competitive to support sales and to protect our margins.

We have sophisticated cost optimization tools that track prices of the underlying components of the products we sell. So the teams are well informed for these discussions. We are also holding our suppliers accountable to drive out costs through their productivity just as we are doing throughout our own organization. We are also partnering with our suppliers through our Lowe's One Roof Media Network. Some of our top suppliers have already locked in sizable contracts for 2023, and we are excited to partner with them to strategically target the home improvement shopper to drive traffic on Lowes.com and convert to sale. Before I close, I'd like to extend my appreciation to our merchants and our inventory and supply chain teams, along with our vendor partners for their hard work and continued support throughout 2022.

I'm looking forward to what we will accomplish together in 2023, as we continue to find ways to provide value to our shared customers. Thank you. And I'll now turn the call over to Joe.

Joe McFarland: Thank you, Bill, and good morning, everyone. I'd like to start by thanking our associates for their unwavering commitment to serving our customers and delivering another solid year of operating results. Associates at the heart of any retailer but even more so in our industry, where customers rely on our associates' product knowledge, as they look for the right solutions to repair and upgrade their homes. That's why we are so focused on becoming the employer of choice in retail, where associates used to stay to build their careers. As Marvin mentioned, we've made substantial wage investments over the last four years, and we constantly review each market and monitor candidate flow to help us remain competitive and maintain a robust hiring pool in all geographic areas of the company.

Beyond competitive compensation, we offer comprehensive benefits, flexible scheduling options and bonus opportunities. As we close out the year, we are excited to award $220 million in discretionary and profit sharing bonuses. This includes $70 million for our assistant store managers and supply chain supervisors with an incremental $7,500 bonus this quarter on top of their annual incentive bonus, and we are one of only a handful of retailers to offer share-based compensation for our ASMs, which incentivizes them to build their careers at Lowe's. These critical leaders are undoubtedly some of the hardest working leaders in our company, and they are at the forefront of creating a culture focused on exceptional customer service. In addition to recognizing these leaders, we are also awarding $150 million to eligible hourly associates in recognition of their efforts this year.

Based on continuous associate listening, we also added other improvements this quarter, including sick leave for part-time associates in revamping our store break rooms with higher quality, lower-cost food options. Our investments in our people have helped us build more than 80% of leadership positions from within over the last year, with more than 90% of our store leaders starting as hourly associates. As we enter spring, our busiest time of year, I'm pleased that we have the best staffing levels that we've had in three years. Our focus on associates also translates into how we're serving the Pro, which is our biggest opportunity for growth. This quarter, we launched a Know the Pro training, helping our associates understand how to better serve Pro customers across the entire store, not just at the Pro desk.

This training supported storewide participation in key Q4 Pro events, including the most successful PROvember we've ever had, as well as our MVPs bonus days, which exceeded expectations. I would like to thank our associates, especially our Pro team, for delivering outstanding results, driving US Pro comps of 10% for the quarter, 36% on a two-year basis, despite commodity deflation. We continue to leverage our MVPs, Pro Rewards and partnership program to capitalize on this demand by engaging Pros, incentivizing purchases and building long-term loyalty. Our program is designed to make every Pro feel like an MVP regardless of their size, giving small to mid-size pros, access to bonus points, savings and exclusive offers that they can't get elsewhere.

We're pleased to see the results continue to exceed expectations, as reflected in our 200 basis points increase in Pro customer satisfaction scores in Q4. Shifting gears to our focus on productivity. We continue to make progress with our PPI, or perpetual productivity improvement initiatives. One of the key objectives of PPI is simplifying our associates' jobs while removing friction for our customers. This approach allows us to generate productivity and cost savings in the store, while simultaneously improving customer service. One great example of this is the transition of our outdated legacy technology to our new modern omnichannel systems. We just completed the conversion at our returns desk with easy-to-use touchscreens that enable associates to quickly scan items and process to correct return value, with the system automatically accounting for return policies and promotions.

This simplifies the return experience for customers, gives our suppliers more insights to improve product quality, while also making it easier for associates to enforce our policies and manage complex returns. We also continue to roll out new tools, including 90,000 additional Zebra smartphones by the end of June, to ensure all associates walking the sales floor have a device, including our MST associates. Our leadership team knows that when we make things easier for our associates, they make things easier for our customers. And our new returns process is just one example of the dozens of initiatives underway to do just that. And of course, none of this would be possible without our associates. For our associates tuning in, thank you for your ongoing focus on serving customers and driving productivity.

We appreciate your hard work. And with that, I'll turn the call over to Brandon.

Brandon Sink: Thank you, Joe, and good morning, everyone. Let me begin with our Q4 results. We generated GAAP diluted earnings per share of $1.58 compared to $1.78 last year. Now, my comments from this point forward will include certain non-GAAP comparisons where applicable. Excluding the $441 million of pretax transaction costs associated with the sale of our Canadian retail business, we generated adjusted diluted earnings per share of $2.28, an increase of 28% compared to the fourth quarter of 2021. This increase was driven by our continued focus on productivity, as well as disciplined capital allocation. Q4 sales were $22.4 billion, which includes approximately $1.4 billion in sales generated in the 14th week. Comparable sales declined 1.5%.

US comp sales were down 0.7% in the quarter, with comp average ticket up 4.8%, driven by product inflation and higher Pro sales, partly offset by 75 basis points of lumber deflation. This was offset by a comp transaction decline of 5.5%. Sales in Canada totaled $958 million, a decline of 18% in USD on a comparable basis, partly driven by exchange rate unfavorability due to a stronger dollar and lumber deflation. FX represented a 25 basis point headwind to consolidated comps. Of note, both the Canadian sales decline and lumber deflation pressured our Q4 comps more than expected. US Pro sales were up 10% in the quarter despite lumber and copper deflation. On lowes.com, sales increased 5% in the quarter, partly driven by continued strength in appliances.

Our US monthly comps improved as we moved through the quarter, with comps down 3.1% in November due to DIY pullback on discretionary holiday spending. In December, comps were down 0.2%, with comps turning positive in January, up 1.4%, reflecting continued DIY investment in the home. Gross margin was 32.3% of sales in the fourth quarter, down 60 basis points from last year. Product margin rate improved 15 basis points versus the prior year. Gross margins also benefited from 30 basis points of favorable product mix due to a lower percentage of lumber sales. Higher product margin rate was offset by 40 basis points related to the expansion of our supply chain network, 30 basis points of pressure from shrink and 35 basis points of pressure from our private label credit portfolio.

Adjusted SG&A of 20.9% of sales levered 131 basis points relative to Q4 2021, despite a modest decline in sales, as we executed on our PPI initiatives across the company. Adjusted operating margin rate of 9.6% of sales levered 88 basis points, as adjusted SG&A leverage was partly offset by lower gross margin rate. The adjusted effective tax rate was 24% below prior year levels. Inventory ended the quarter at $18.5 billion, which now solely reflects the inventory for our US business, as we closed on the sale of the Canadian retail business on February 3. Inventory is up $0.9 billion from the same quarter last year, largely driven by product inflation with units down slightly to prior year. We continue to shift our inventory mix more towards Pro categories as we invest to drive future growth.

Now, let me turn to capital allocation. In 2022, we generated $6.8 billion in free cash flow driven by outstanding operating results, and we returned $16.5 billion to our shareholders through both share repurchases and dividends. During the fourth quarter, we paid $643 million in dividends at $1.05 per share and repurchased 10 million shares for $2 billion. This brought the total to $14.1 billion in share repurchases for the year, ahead of our expectations for approximately $13 billion. This reflected better-than-expected operating performance and our commitment to return excess cash to shareholders. We ended the quarter at 2.44 times adjusted debt-to-EBITDA. And finally, we delivered return on invested capital of 30.4%, inclusive of an 800 basis point impact related to transaction costs associated with the sale of our Canadian retail business.

Turning to our 2023 financial outlook, which we introduced this morning. As Marvin indicated, the long-term outlook for home improvement remains strong. However, in 2023, residential investment will be under some pressure. Given elevated levels of inflation, higher interest rates, and a more cautious consumer, we are forecasting a slight decline in the home improvement market. We expect to continue to outperform the market in 2023 with sales ranging from $88 billion to $90 billion. Comparable sales are expected to be in a range of flat to down 2%. Keep in mind that 2023 comparable sales will be calculated based on weeks two through 53 in fiscal 2022. Pro sales growth is expected to exceed DIY again in 2023 and as we expect to continue to outpace the broader Pro market growth by 2x.

We will continue to build on our momentum with the Pro with our new MVPs Pro loyalty program, CRM tools, and our expanded Pro brand lineup. We are expecting operating margin in the range of 13.6% to 13.8% as we continue to drive productivity through our PPI initiatives across the organization, in part to offset our planned wage investments. For 2023, we are expecting to invest $350 million in incremental wages for our frontline associates, which includes the 2023 portion of the $170 million permanent wage investment that went into effect in December. We expect capital expenditures of up to $2 billion this year and with our planned share repurchases, we also expect to reach our 2.75 times leverage target in 2023, while maintaining our BBB+ credit rating.

Our strong operating performance and shareholder-focused capital allocation strategy is expected to deliver approximately $13.60 to $14 in earnings per share for the year. Keep in mind that there was an approximate $0.25 contribution to adjusted EPS from the 53rd week in our Canadian business in 2022. I would like to spend a moment discussing our expectations for first half performance, which is an easier comparison from a sales perspective. However, when we consider the impact of lower lumber prices, we are expecting a nearly 300 basis point headwind to sales in the first quarter and a 100 basis point headwind to sales in the second quarter. Given these impacts, we expect our first quarter sales comps to be below our full year guidance range and our second quarter sales comps to be above our full year guidance range.

In closing, I'm confident that the combination of our strong operating results and our shareholder-focused capital allocation strategies will continue to deliver meaningful long-term shareholder value. And with that, we will open it up for questions.

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