You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the risk factors, MD&A and other sections of our annual report on Form 10-K and our other SEC filings.
Additionally, we'll be discussing certain non-GAAP financial measures.
I'd like to begin by taking a moment to extend my thoughts and prayers to those who are impacted by the ongoing pandemic as well as the many wildfires.
At Lowe's, we remain committed to the health and safety of our associates and customers while supporting the communities in which we operate.
The resilience of our customers and our associates is something that I admire on a daily basis.
Now, turning to our results.
We are very pleased with the performance for the second quarter.
Our outstanding two year performance was driven by great execution of our total home strategy, which allowed us to win with both the pro and DIY customers while meeting the aggressive growth demands across Pro, Lowes.com and our installation services business.
As anticipated, during the quarter, we saw a decline in DIY demand versus last year as many families transition back to pre-COVID purchase patterns and weekend mobility after Memorial Day.
But because of the agility of our total home strategy, we were able to capitalize on pro demand driving growth of 21% this quarter and 49% on a two year basis.
This level of pro growth would not have been possible without our intense focus on the pro customer over the past 24 months.
This intense pro focus includes our U.S. stores reset project that we executed last year.
This reset has allowed us to create a more intuitive store layout for the pro aligned across product adjacencies, so pros can quickly and easily locate all products they need for their jobs.
And as a reminder, our core pro customer is a small- to medium-sized business owner.
These customers shop frequently across the store, impacting numerous product categories.
And as we continue to capture more of their spend, we will continue to increase productivity across the top and bottom line of our stores.
Later in the call, Bill will discuss how we will continue to expand our pro product offerings and then Joe will discuss our enhanced online experience for the Pro.
We also delivered double-digit growth this quarter in our installation services.
We continue to expand the products available for installation and we're leveraging our enhanced e-commerce platform and our revamped business model to deliver a better customer experience.
We expect our installation services business to continue to play an important role in our total home strategy as customers increasingly look to us to provide an end-to-end turnkey solution for their home project needs.
And at Lowes.com, sales grew 7% on top of 135% growth in the second quarter of 2020, which represents a 9% sales penetration this quarter and a two year comp of 151%.
Our enhanced omnichannel offering continues to resonate with our customers who increasingly expect total flexibility in shopping however, whenever and wherever they choose.
We're also pleased with the performance of our Canadian business.
In the second quarter, Canada delivered comp growth in line with the U.S. despite several COVID-related operating restrictions.
We also continued to elevate our product offering, which is another pillar of our total home strategy as we help fulfill the aspirations of our customers to upgrade their homes and style.
And we delivered strong positive comps across kitchen and bath, flooring, appliances and decor on top of 20% growth in these categories last year.
The 17% growth we experienced in ticket over $500 was in large part driven by these categories, reflecting continued consumer confidence in investing in their homes.
This also reinforces the consumers' confidence in Lowe's as the right destination for their home decor needs.
And during the quarter, operating margin expanded approximately 80 basis points leading to diluted earnings per share of $4.25, which is a 13% increase as compared to adjusted diluted earnings per share in the prior year.
In the face of unprecedented lumber price volatility during the second quarter, our improved operating performance reflects the benefits of our new price management system along with our disciplined focus on perpetual productivity improvement, or PPI.
Bill and Joe will discuss both these initiatives in more detail later in the call.
I'd now like to take a moment to discuss a very important milestone in the company's transformation.
When I joined Lowe's as CEO back in July of 2018, I discussed the importance of transforming and modernizing our supply chain.
The foundation of this transformation is transitioning the company from a store-based delivery model to a market-based delivery model for big and bulky products.
I'm pleased to announce that this quarter, we completed the conversion of our Florida region to a market-based delivery model for appliances and other big and bulky items like grills, riding lawn mowers and select patio furniture.
In this new delivery model, product flows from the bulk distribution centers to cross-dock terminals directly to customers' homes, bypassing the stores altogether.
This replaces a legacy store delivery model where we hold appliances in stockrooms and storage containers behind our stores and then leverage store-based trucks and associates to deliver these products to customers' homes.
To say this legacy process is inefficient would be an extreme understatement.
The new market-based delivery model is already driving higher appliance sales, improved profitability, lower inventory, higher on-time delivery rates and improved customer satisfaction.
And we're freeing up space in our stockrooms, which will enable us to expand our same-day and next-day pro and DIY fulfillment capabilities in the near future.
over the next 18-plus months.
With this new delivery model, we will continue to drive sales, inventory turns and operating leverage through a technology-driven, simplify and customer-centric process.
Before I close, I'd like to share my perspective on the home improvement market as well as Lowe's opportunity to win in this market.
The outlook for the home improvement industry remains very positive.
Residential investment is expected to remain high due to historically low mortgage rates while home prices continue to appreciate.
We're also pleased that we continue to see higher household formation trends and longer-term wallet share shift to the home.
It's also worth noting that any near-term pressures on housing turnover is not related to an economic downturn as typical.
In fact, there is more housing demand than supply, resulting in home prices continuing to rise.
And because of this, consumers have an increased confidence in repairing and remodeling their homes.
As a reminder, approximately two-thirds of Lowe's annual sales are generated from repair and maintenance activity.
Further, our research shows that it will take years for the supply of homes to meet the projected demand.
This remains a very positive indicator for home improvement.
In addition, the customers' mindset regarding their home is very straightforward.
As long as their home is increasing in value, they see upgrades and enhancements to their home as an investment and not an expense.
Looking ahead, although the business environment remains uncertain, we are confident that our total home strategy provides us with the agility to operate with profitability in times of high and low customer mobility.
And finally, I would like to extend my heartfelt appreciation to our frontline associates.
As I travel the country on a weekly basis visiting stores, I'm continually inspired by the hard work and commitment of our associates to support our communities while providing excellent customer service.
U.S. comparable sales were down 2.2% in the second quarter but up 32% on a two year basis.
We drove solid positive comps in our building products and home decor divisions.
And while we delivered a terrific spring over the first half of the year, the pivot in consumer behavior after Memorial Day resulted in negative comps in our seasonal categories this quarter.
However, growth was broad-based on a two year basis with all product categories up more than 15% in that time frame.
In building products, we delivered double-digit comps in electrical and lumber driven by strong pro demand as well as high levels of inflation.
And as Marvin mentioned, our merchandising and finance teams navigated through unprecedented lumber price volatility this quarter.
Our enhanced pricing systems enabled us to effectively mitigate the impact on our product margins.
Dave will provide more detail on the near-term impact of the lumber price decline on our margins and sales, but I'm confident that our talented teams have the right pricing tools and processes to continue to manage through elevated levels of inflation and pricing volatility.
I'm also pleased with our performance in home decor as DIY customers continue to rely on Lowe's for their home remodeling needs.
By leveraging our total home strategy, we delivered positive comps across appliances, kitchens and bath, flooring and decor on top of over 20% growth in these categories last year.
Capitalizing on our No.
1 position in appliances, we delivered strong comps in the category this quarter with particularly standout performance in washers and dryers as well as refrigerators and freezers.
Countertops, kitchen cabinets and vanities were the strongest contributors to our kitchen and bath comps as our customers continue to appreciate the new on-trend, coordinated styles that are available in our own allen + roth brand.
Vinyl flooring was the top-performing category within flooring driven by new and innovative WetProtect product from Pergo.
It's a leading brand in this category that is exclusive to Lowe's and this product provides peace of mind to our customers with its guaranteed waterproof protection for both the flooring and sub-floor.
We also delivered a strong spring season in the first half of the year that kicked off with the launch of our new SpringFest event.
We were very pleased that our customers took advantage of the strong product offerings to help make the most out of their outdoor living spaces In this quarter, we delivered over 30% growth in battery-operated outdoor power equipment.
Both our DIY and pro customers are drawn to the convenience and the quality of the EGO, Kobalt, CRAFTSMAN and Skill brands with their zero-emission, rechargeable equipment.
And the addition of the EGO and Skill brands only bolsters our No.
1 position in outdoor power equipment and they truly complement our other leading brands such as John Deere, Honda, Husqvarna, Aaron's and CRAFTSMAN.
We continue to add new brands and products to our lineup, especially for our pro customer.
This quarter, with the launch of Flex Power Tools, we featured an in-store demo station for our new Flex cordless power tools.
This brand is exclusive to Lowe's and delivers innovation to the power tool category, bringing more power and faster charging time than its competition.
We also introduced the Mansfield brand across our bath department with drop-in tubs, showers and toilets.
Another exclusive in the home center space, Mansfield is a strong pro brand and their products are made right here in the United States.
And I'm excited to announce that we'll be bringing more U.S.-manufactured product to Lowe's this fall with the launch of SPAX fasteners.
SPAX is the market leader in multi-material construction screws.
Their industry-leading innovation delivers some of the most advanced fasteners on the market.
The addition of SPAX to the fastener program now rounds out the pro assortment in this category that our pro customers need.
The addition of Flex Power Tools, Mansfield plumbing products and SPAX fasteners, continues to enhance our pro brand arsenal, which already includes strong pro brands such as Simpson Strong-Tie, DEWALT, Bosch, Spyder, GRK, FastenMaster, ITW, Lufkin, Marshalltown, S-Wing, Eaton, SharkBite and LESCO.
As Marvin previously discussed, we delivered strong sales growth of 7% and a two year growth of 151% on Lowes.com.
This quarter, we enhanced our omnichannel customer experience with the launch of our virtual kitchen design, which enables customers to create their dream kitchen, allowing them to work on their projects seamlessly between Lowes.com and the specialists on our virtual central design team.
As part of our total home strategy, we are launching virtual search in our stores, which now allows a customer to hover their smartphone over a product and explore an endless aisle of similar items on Lowes.com.
This is just one example of how we continue to integrate the online and in-store shopping experiences.
And looking ahead, we are excited about the upcoming fall and winter holiday seasons as our customers will turn their attention to doing their homes and outdoor living spaces as the weather cools.
We are confident that our total home strategy will enable us to continue to elevate our product assortment and allow us to take market share across our DIY and pro customers.
We will also continue to leverage our new price management system to effectively manage our product margins with a disciplined approach to vendor cost management and a data-driven portfolio approach to pricing to further enhance and refine our everyday competitive price strategy.
And before I close, I'd like to once again extend my appreciation to our vendor partners and our merchants for their commitment to serving our customers.
For the second quarter, we continued to drive improved execution in our stores with our associates laser-focused on serving customers and maintaining a safe store environment.
In early August, in response to the surge of the Delta variant, we reinstated mask requirements for all of our associates regardless of their vaccination status.
I'm appreciative that our associates are once again rising to the dynamic challenges presented by this pandemic.
I'm pleased to announce that for the sixth consecutive quarter, 100% of our stores earned a Winning Together profit-sharing bonus, resulting in a $91 million expected payout to our frontline hourly associates.
And because our efforts once again exceeded expectations, this represents an incremental $20 million over the target payment level.
We're also very pleased that our PPI initiatives continue to gain traction, driving operating efficiency again this quarter as we leverage store payroll through operational process improvements and technology enhancements, reducing the amount of time our associates spend on tasking activities so they can focus instead on serving the customer.
During the quarter, we maintained strong staffing levels despite isolated labor shortages in some areas of the country.
We continue to enhance the labor scheduling system that we launched in 2019, which allows us to align our payroll hours with customer traffic patterns.
It also enables us to respond rapidly and effectively to changing market conditions so that we can ensure that we continue to provide great customer service while also driving operating leverage.
This year, we've installed our homegrown self-checkout solution in over 550 stores that did not have any self-checkout capability for our customers.
This Lowe's-designed self-checkout was built with the home improvement shopper in mind, featuring a simplified user interface, multiple ways to scan product and the ability to use Lowe's military and credit card discounts.
This new solution is already driving higher customer adoption rates and incremental payroll leverage.
And with the digital signs fully rolled out across lumber and appliances, we are not only driving labor savings but also enhance product margins as we can now adjust prices more quickly to protect share and margins during periods of price volatility.
As previously discussed, our online penetration for the quarter was 9%.
And with approximately 60% of online orders picked up in the store, our dedicated in-store fulfillment teams are an integral part of the Lowe's omnichannel customer experience.
We are continuing to leverage technology to improve efficiency in the customer experience, whether customers get their orders the front desk or through curbside or through their favorite option, our new pickup lockers.
Now, let's turn to our performance of the pro customer.
As discussed earlier, pro continues to outpace DIY with pro comps of 21% for the quarter and 49% on a two year basis.
We continue to expand our digital connection with the pro customers.
We just completed the migration of Lowe's for pros to the cloud.
This important step in our pro business evolution enables enhanced features, faster updates, improved site stability and more personalized offers for the Pro.
One new feature is rapid reorder, which enables our pro customers to quickly reorder items that they frequently purchase through Lowe's.
We are focused on making the pro shopping experience both online and in-store as easy and intuitive as possible.
We're also growing our pro loyalty program as we look for innovative ways to expand our members-only benefits.
Every day, we are striving to demonstrate that Lowe's is the new home for pros .
Looking ahead, I'm excited about the second half of the year as we leverage our total home strategy to build on the momentum in pro and installation services while also meeting the needs of the DIY customers as they continue to tackle interior and exterior projects to improve their homes.
Before I close, I would like to once again extend my appreciation to our frontline associates along with other executive and senior officers as well as merchants and field leaders.
I'm out visiting stores on a weekly basis to ensure that we continue to engage with and support our frontline associates in this challenging operating environment.
I'm incredibly proud of this team and their continued hard work and dedication.
In the second quarter, we generated $2 billion in free cash flow driven by continued strong operational execution and consumer demand.
We returned $3.6 billion to our shareholders through a combination of both dividends and share repurchases.
During the quarter, we paid $430 million in dividends at $0.60 per share and we announced a 33% dividend increase to $0.80 per share for the dividend paid on August 4.
Additionally, we repurchased 16.4 million shares for $3.1 billion and we have $13.6 billion remaining on our share repurchase authorization.
Capital expenditures totaled $385 million in the quarter as we invest in the business to support our strategic growth initiatives.
We ended the quarter with $4.8 billion in cash and cash equivalents on the balance sheet, which remains extremely healthy.
At quarter end, adjusted debt-to-EBITDAR stands at 2.08 times, well below our long-term stated target of 2.75 times.
With that, now I'd like to turn to the income statement.
In Q2, we generated diluted earnings per share of $4.25, an increase of 13% compared to adjusted diluted earnings per share last year.
During the quarter, we drove improved operating leverage as we executed against numerous productivity initiatives across the company.
My comments from this point forward will include approximations and comparisons to certain non-GAAP measures where applicable.
Q2 sales were $27.6 billion with a comparable sales decline of 1.6%.
Comparable average ticket increased 11.3% driven by over 400 basis points of commodity inflation, mostly in lumber, as well as higher sales of appliances and installations.
This was offset by comp transaction count declining 12.9% due to lower sales to DIY customers of smaller ticket items like cleaning products, paint, mulch and live goods.
In Q2, we cycled over a period when consumer mobility was limited, so many of our customers were tackling smaller projects around their homes.
Also in Q2 of this year, DIY customers pulled back on purchasing lumber and related attachments due to extremely elevated lumber prices in the quarter.
Keep in mind that comp transactions increased 22.6% last year, which results in a two year comp transaction count increase of 6.8%.
As Marvin indicated, our investments in our total home strategy gave us the ability to pivot during the quarter and led to outperformance in many of our key growth areas with pro up 21%, online up 7%, installation services up 10% and strong positive comps across DIY decor categories.
comp sales were down 2.2% in the quarter but up 32% on a two year basis.
Our U.S. monthly comps were negative 6.4% in May, negative 1.8% in June and a positive 2.6% in July.
After Memorial Day, there was a noticeable increase in consumer mobility and consumers engaged in the opportunity to travel and spend in other discretionary categories.
We saw a related decline in DIY customer traffic in our stores on the weekends while weekday traffic remained strong.
Looking at U.S. comp growth on a two year basis from 2019 to '21, May sales increased 32 and a half percent, June increased 32% and July increased 31 and a half percent.
Gross margin was 33.8%.
As expected, gross margin rate declined 30 basis points from last year but was up 165 basis points as compared to Q2 of '19.
Product margin rate improved 40 basis points.
Our teams effectively managed product cost and pricing this quarter despite unprecedented volatility in lumber prices.
Our teams continue to minimize vendor cost increases driven by higher commodity prices and elevated industry transportation costs.
Also, higher credit revenue drove 30 basis points of benefit to gross margin this quarter.
These benefits were offset by 20 basis points of pressure from shrink and live good damages from the extreme weather conditions in the West, also 25 basis points of mix pressure related to lumber and 20 basis points from less favorable product mix in other categories.
Supply chain costs also pressured margin by 35 basis points as we absorbed some elevated distribution costs and continue to expand our omnichannel capabilities.
Our supply chain team continues to leverage our scale and carrier relationships to minimize the impact of these distribution costs experienced across the retail industry.
Now, I'd like to spend just a moment discussing the near-term impact from the steep drop in lumber prices beginning in early July.
Since that time, we have been selling many of our lumber products at compressed margins because we had previously purchased these products at higher cost.
However, we expect that by the end of August, we will have substantially sold through these higher cost inventory layers.
And despite these short-term pressures, we are still expecting that our gross margin rate to be up slightly for the full year versus last year.
SG&A at 17% of sales levered 135 basis points versus LY driven primarily by lower COVID-related costs.
We incurred $25 million of COVID-related expenses in the quarter as compared to $430 million of COVID-related expenses last year.
The $405 million reduction in these expenses generated 145 basis points of SG&A leverage.
These benefits were offset by 20 basis points of pressure from higher overall employee healthcare costs.
Operating profit was $4.2 billion, an increase of 6% over LY.
Operating margins of 15.3% of sales for the quarter was up 80 basis points to the prior year.
This improvement was generated by improved SG&A leverage, partially offset by lower gross margin.
The effective tax rate was 24.4% and it was in line with prior year.
At the end of the quarter, inventory was $17.3 billion, down $1.1 billion from Q1 and in line with seasonal trends.
This reflects an increase of $3.5 billion from Q2 of 2020 when our in-stock positions were pressured due to elevated demand levels and COVID-related supply disruption.
Current inventory includes a year-over-year increase of $665 million related to inflation, the majority of which is attributable to lumber.
Now, before I close, let me comment on our current trends and how we are planning the business for the second half of this year.
Clearly, we continue to manage our business in a very fluid environment with the Delta variant trends injecting new uncertainty into the forecast.
However, given our strong first half performance, Lowe's is clearly tracking well ahead of our robust market scenario that we shared with investors back in December of 2020.
Our outlook assumes that the home improvement market will moderate somewhat in the second half given lower levels of commodity inflation and a continued increase in consumer mobility driven by return to work and school.
We are expecting Lowe's mix-adjusted market demand to be essentially flat for the full year.
This relevant market view reflects Lowe's higher DIY mix and lower online penetration.
Now, in this revised scenario, we expect Lowe's to deliver sales of approximately $92 billion for the year, representing two year comparable sales growth of approximately 30%.
Month-to-date, August U.S. comp sales trends are materially consistent with July's performance levels on a two year comparable basis.
As expected, we are already seeing a several hundred-basis-point improvement in comp transaction count over the Q2 levels, partially driven by increased unit sales of DIY lumber and related attachments as DIY customers who were sitting on the sidelines reengaged after lumber prices dropped.
Importantly, we expect gross margin rate to be up slightly versus the prior year as we leverage our pricing and promotional strategies to mitigate the impacts of product and transportation cost inflation.
With elevated sales levels projected and our current productivity efforts taking hold, we are now raising our outlook for operating income margin to 12.2% for the full year.
We are expecting a 10-basis-point negative impact from elevated cost inflation.
Furthermore, we are tracking well ahead of our operating plans.
And as such, we now expect to incur higher-than-planned incentive compensation, resulting in 20 basis points of pressure.
Together, these expenses represent 30 basis points of operating margin deleverage relative to the $92 billion revenue outlook.
Without these offsets in expenses, we would be expecting an operating income margin of 12 and a half percent for the full year.
When I consider our outlook for the business for the remainder of this year, I'm very pleased that we are now expected to deliver approximately 145 basis points of operating margin improvement over 2020.
This reflects a disciplined focus on driving productivity and operational excellence across the organization.
We are planning for capital expenditures of $2 billion for the year.
Furthermore, we expect to execute a minimum of $9 billion in share repurchases.
In closing, we are operating in a great sector expected to benefit from the secular tailwinds over the next several years.
We are investing in the business and our total home strategy to drive long-term growth so that we continue to outperform the market and drive meaningful long-term shareholder value.

user
compname reports q2 earnings per share of $4.25.
q2 earnings per share $4.25.
q2 sales $27.6 billion versus refinitiv ibes estimate of $26.85 billion.
q2 earnings per share $4.25 excluding items.
qtrly consolidated comparable sales decreased 1.6%.
qtrly u.s. comparable sales decreased 2.2%.
raises fiscal 2021 financial outlook.
sees fy 2021 revenue of about $92 billion.
for fiscal 2021, company expects capital expenditures of approximately $2 billion.
sees fy 2021 revenue of about $92 billion, representing about 30% comparable sales growth on a two-year basis.

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