How did Lowe's manage to reduce operating expenses in Q4 2025?

Lowe's was able to reduce operating expenses in Q4 2025 due to several strategic initiatives and operational efficiencies. Here are the key factors that contributed to this outcome:

1. **Strategic Initiatives**: Lowe's implemented a 2025 Total Home Strategy aimed at driving sustainable growth and increasing market share. This strategy focused on enhancing customer satisfaction, innovation, and operational efficiency. The introduction of an advanced AI framework and the launch of the first product marketplace in the U.S. home improvement industry are examples of how Lowe's leveraged technology to streamline operations and improve customer experience.
2. **Operational Efficiency**: The company's operational efficiency was boosted by enhancements in its online sales platform, which saw a 9.5% growth in Q4, supported by AI-enabled tools and omnichannel investments. These digital advancements likely led to cost savings by optimizing inventory management, reducing waste, and improving supply chain efficiency.
3. **Store Optimization**: Lowe's planned to open 5 to 10 new stores annually, focusing on fast-growing U.S. markets and strengthening its presence in rural areas. This strategic expansion likely optimized store locations to reduce transportation costs and improve delivery efficiency.
4. **Pro Loyalty Program Revamp**: The introduction of the MyLowe’s Pro Rewards program, tailored to enhance engagement with small to medium-sized professional customers, suggests a targeted approach to loyalty program management that could have reduced costs associated with customer retention.
5. **AI-Powered Virtual Advisor**: The upcoming launch of an AI-powered home improvement virtual advisor indicated Lowe's commitment to leveraging technology to provide personalized services while potentially reducing the need for physical staff in certain areas.

In summary, Lowe's reduced operating expenses in Q4 2025 by focusing on strategic growth initiatives, enhancing operational efficiency through digital tools, optimizing store locations, revamping loyalty programs, and investing in innovative technologies like AI-powered virtual advisors. These measures collectively contributed to cost savings and improved profitability.