Marvin Ellison: No, Michael, it’s a fair question. If you strip out storm overlaps, geographically, our performance is relatively balanced. So there are really no outliers. When you look at markets that had a dramatic run-up in housing costs and some level of moderation, there is really no material impact to our business based on that. Obviously, it’s something that we stay very close to, we’re paying attention to it, but as of right now, it’s not material, and we don’t see it as something that’s going to affect our business in the near term.
Michael Lasser: Thank you and have a great holiday.
Marvin Ellison: Thank you, sir.
Operator: The next question comes from the line of Brian Nagel with Oppenheimer and Company. Please proceed with your questions.
Brian Nagel: Hi. Good morning. Thanks for taking my questions. So a couple of questions on top line. I’ll merge them together. But first off, a bit of a follow-up is on appliances. So, Marvin, you talked about maybe some normalization in overall promotion, vendor led. I guess the question I have on appliance is, are you seeing a big shift in the market? And obviously, we’ll get there through a demand backdrop. Are you seeing anything shift from a competitive standpoint? And then my second question, just with respect to the underlying cadence of the business, we saw what appears to be weakening trends through the fiscal third quarter and then presumably here into the fourth quarter. Anything that you can — clearly, there’s some seasonal factors there, but is there anything else you can really call out that you have identified as kind of a driver of that weakening trend in the overall business? Thank you.
Marvin Ellison: Michael (ph), I’ll take both and just allow Brandon or Bill to jump in if they have any additional comments. On the planned shift, I mean, we’re not seeing anything other than what Bill talked about, where you have vendor funded promotions kind of driving average ticket down. And also, as we mentioned in the prepared comments, we’re seeing customers being just a little more specific on their purchases going from an entire suite to just a refrigerator, as an example. And I think that’s just the cautious nature of the DIY discretionary spending on some of these bigger-ticket categories we talked about. We are the market leader in the U.S. in appliances. And as I mentioned earlier, 14% of our annual revenue is predicated to appliances.
And so when the market is soft, we have a disproportionate impact. Having said that, we feel great about our market leading position. And as Bill outlined, we have some competitive offers on single unit purchases for the holiday season that’s the best in the industry. And so we feel like we’re in a good place relative to the marketplace. On weakening trends, there’s not anything we can put our finger on it. I mean, you know all of the macro indicators with resumption of student loan debt and sustained inflation, interest rates and I just think that those things, combined with the fact that people are just choosing to take discretionary dollars and have more experiences with those dollars is really leading into some of the things that we’re seeing.
And when those discretionary categories are impacted, those are typically DIY-related purchases and again at 75% penetration in DIY, we just have a disproportionate impact to that. So I’ll let Brandon or Bill add anything else if they have it in addition to what I just said.
William Boltz: The only thing that I would add, Brian, is that just as I said earlier, just a reminder that over 100,000 units of appliances break in the marketplace every week and we’ve got to be there for that consumer as the market leader, and that’s what we’re trying to do and do that in a responsible manner to make sure that we can hit all the financial targets that we need to hit, but also make sure that we can meet the customer where they want to be met, both online and in store.
Brandon Sink: Yeah. And Brian, this is Brandon. Just to wrap it out in terms of how we are looking at Q4, I think our outlook, largely a continuation of the macro and the traffic trends that we’ve experienced in Q3. We do expect a light or a slight impact from lumber deflation as we transition into Q4. All of the offers that Bill has talked about with appliance holiday offers are reflected in there. We do expect some light pressure from cycling Hurricane Ian. So we triangulated all that, we’ve looked at one, two, four-year trends. All of that sort of baked into the expectations that we set and we believe it’s very achievable for us here for Q4.
Brian Nagel: All right, guys. Appreciate all the color. Happy Thanksgiving. Thank you.
Marvin Ellison: Thank you, Brian.
Brandon Sink: Thank you, Brian.
Kate Pearlman: Thank you all for joining us today. We’d like to wish everyone a Happy Thanksgiving and a wonderful holiday season, and we look forward to speaking with you on our fourth quarter earnings call in February.
Operator: Thank you. This concludes the Lowe’s third quarter 2023 earnings call. You may now disconnect.
