Lowe’s CEO Marvin Ellison & LVMH’s Middle East Market 4/14/26

Summary

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Squawk Pod Episode Summary

Episode Title: Lowe’s CEO Marvin Ellison & LVMH’s Middle East Market
Date: April 14, 2026
Hosts: Joe Kernen, Kelly Evans, Andrew Ross Sorkin
Featured Guests: Marvin Ellison (CEO, Lowe’s), Robert Frank (CNBC Wealth Reporter), Steve Liesman (CNBC Senior Economics Reporter)

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Episode Overview

This episode centers on two major themes:

• Lowe’s Innovation & Labor Challenges:
  An interview with Lowe’s CEO Marvin Ellison explores their new "Home Care Plus" subscription service, efforts to combat the skilled trades gap in the U.S., and the impact of the housing market on their business.

• Luxury Market Headwinds:
  CNBC reporters analyze the effects of the ongoing Iran war on luxury conglomerate LVMH’s Middle East operations and examine the resilience of the global luxury consumer.

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Key Segments & Timestamps

1. Lowe’s New Home Services & Strategy (16:07-29:20)
2. Skilled Trades Gap & National Impact (20:58-23:18)
3. Housing Affordability & Business Climate (23:18-29:20)
4. LVMH & Luxury Market Amid Geopolitics (29:25-35:04)
5. Economic Sentiment and Small Business (05:44-13:45)

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Lowe’s New Home Services & Strategy (16:07–29:20)

Launch of Home Care Plus

• Service Details:

  • $99/year for two home visits by a Lowe’s store associate (not a third-party contractor).
  • Services: filter changes, dryer vent cleaning, lubricating garage doors, flushing water heaters, changing smoke detector batteries, and lightbulb replacement—even in hard-to-reach places.
  • Associates use customized vehicles equipped with supplies.

• Quote:

  “For $99 a year, you get two home visits from a Lowe's associate working in the local store. This is not a third party, it's not a contractor.”
  — Marvin Ellison, [01:15], [17:02]

• The initiative aims to deepen customer relationships and set Lowe's apart, building both loyalty and recurring revenue.

• Training:

  • Associates are specialized and trained.
  • Kelly Evans questions the depth of training:

    “These people are trained to know how to do all this?”
    — Kelly Evans, [18:03]

  • Ellison assures specialized training.

• Pilot & Differentiation:

  • The service was piloted for eight months, confirming both viability and customer demand (19:07).
  • Meant for brand differentiation and as a “human capital” play.

• Profitability:

  “But more importantly than making money, we create incredible long term relationships with customers... That customer, if they have a great experience, they come back and they buy more.”
  — Marvin Ellison, [19:45]

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Skilled Trades Gap & National Impact (20:58–23:18)

• Lowe’s Trades Training Initiative:

  • Committing $250 million to train 250,000 skilled trades workers—plumbers, electricians, HVAC pros.
  • Addressing a nationwide shortage: about 350,000 new tradespeople needed yearly, plus 40% of current skilled trades workers will retire within five years.

• Quote—On Urgency:

  “This is, I believe, not only a need for the construction trade. This could be a national security issue because of all the infrastructure repairs and work needed over the next decade.”
  — Marvin Ellison, [21:42]

• AI’s Role:

  • Lowe’s leverages AI (Nvidia, Palantir, OpenAI) for customer support and internal efficiencies, but emphasizes the irreplaceable value of trades:

    “AI can write code, but AI can't climb a ladder and it can't fix a hole on your roof... you're going to need a combination of AI and a combination of skilled trades for the future of our country.”
    — Marvin Ellison, [21:42], [22:52]

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Housing Affordability & Business Climate (23:18–29:20)

• Home Improvement Demand:

  • Lowe’s overall business remains “pretty good” but limited by flat home turnover.
  • 2/3 of Lowe’s revenue is from maintenance/repair, which is robust due to the U.S.’s oldest-ever housing stock.
  • For accelerated growth, need more home sales (turnover), which is constrained by mortgage rates above 6%.

    “For us to see, you know, really accelerated growth, we're going to need housing turnover to come back, and we believe that will require mortgage rates to fall below 6%.”
    — Marvin Ellison, [14:21], [23:49]

• Macro Headwinds:

  • Tariffs, inflation, and housing remain key challenges, but Lowe’s has diversified sourcing away from China (from 90% to 15%) to lessen tariff impact (25:45).
  • The consumer base is resilient: an average household income over $100,000, $400,000 in equity, facing wage growth.

• Market Share Focus:

  • Despite a flat home improvement market, Lowe’s believes it can “take share” and grow revenue.

  “We believe even in spite of those things, we can run an effective business. We can grow revenue, we can serve our customers well, and we can be really competitive.”
  — Marvin Ellison, [27:10]

• Memorable, Human Touch:

  • Joe jokes about doing his own lightbulbs and toilet repairs, as Ellison cautions:

    “I have an advice for anybody over 40, never get on a ladder taller than 6ft because bad things can happen.”
    — Marvin Ellison, [17:02]

  • Lowe’s AI assistant “Milo” can walk customers through DIY jobs via video.

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Economic Sentiment and Small Business (05:44–13:45)

• NFIB Survey:

  • Small business optimism at a low not seen since April 2025 due to tariffs and the Iran war.
  • Plunge in plans to hire, price increases, and general outlook.

  “With all the uncertainty in the economy, tariff surcharges, higher freight charges, skyrocketing insurance rates and the war with Iran, I feel to cover the increased costs, I may price myself out of the market.”
  — Iowa retailer quoted by Steve Liesman, [07:43]

• Contrast with Large Companies:

  • Joe Kernen and Steve Liesman debate how uncertainty impacts small vs. large firms; tariffs benefit big companies at small ones’ expense.

    “One of the things that looks like it’s happening with tariffs is something where big business is taking market share from small business, and that’s because of the tariff.”
    — Steve Liesman, [12:32]

• Sentiment as Contrarian Indicator:

  • Joe argues low sentiment is often a “buy signal”—it’s “always darkest right before the dawn.”

    “So many times in the past when things seem really dire, that's the time—the hard decision is to buy and it ends up being the right decision.”
    — Joe Kernen, [11:36]

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LVMH & Luxury Market Amid Geopolitics (29:25–35:04)

• Impact of Iran War:

  • LVMH’s Middle East sales dropped 50% in March; company shares down 27% YTD.
  • CEO statement: No signs of tourism rebounding in Dubai post-conflict, hurting luxury sales.

    “The company’s Middle east sales falling by 50% in March. That was after the start of the Iran war. Luxury sales in that region are very dependent on tourists...”
    — Andrew Ross Sorkin, [31:52]

• Global Offsets:

  • U.S. luxury demand steady; Chinese consumer spending picking up both domestically and abroad.

• K-Shaped Economy:

  • The wealthy continue to spend on luxury despite stock market volatility.

    “At least on the luxury side that hasn’t happened a little bit... the wealthy consumer was going to pause spending in March because of what we’re seeing in stock markets; at least on the luxury side that hasn’t happened.”
    — Andrew Ross Sorkin, [33:42]

• Wines & Champagne:

  • “People are drinking less but drinking better. So this is great for a company that’s Dom Perignon, Krug, Cheval Blanc, Yquem...”
    — Robert Frank, [33:14]

• Dubai's Reputation:

  • Tourism in Dubai has plummeted, and its place as a stable hub for capital is under question.

    “Dubai’s reputation as a secure and stable place for capital and people has been damaged. There’s no question.”
    — Andrew Ross Sorkin, [34:36]

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Notable Quotes

• Marvin Ellison on Home Services:

  "This is not a third party, it's not a contractor. It's an actual associate that works in your local store. They'll come in, they'll do an assessment, but they will change all your filters, your dryer vent, lubricate your garage, flush your electric water heater, all your smoke detector batteries."
  — [17:02]

• On AI and the Skilled Trades:

  “AI can write code, but AI can't climb a ladder and it can't fix a hole on your roof.”
  — Marvin Ellison, [22:52]

• Steve Liesman on Tariffs:

  "Big business is taking market share from small business, and that's because of the tariff."
  — [12:32]

• Joe Kernen on Contrarian Investing:

  “It’s always darkest right before the dawn.”
  — [12:32]

• Robert Frank on LVMH’s Resilience:

  "People are drinking less but drinking better. So this is great for a company that’s Dom Perignon, Krug, Cheval Blanc, Yquem, all the high end brands."
  — [33:14]

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Tone & Takeaways

• The episode maintains a pragmatic optimism amid uncertainty—Joe Kernen's persona as the "eternal optimist" offers a counterpoint to downbeat business sentiment reports.
• Marvin Ellison is practical about macroeconomic headwinds but points to innovation, workforce investment, and AI as key to Lowe's adapting.
• The discussion of luxury markets highlights the continued bifurcation of the economy: top-tier consumers are largely unaffected by shocks impacting the middle and lower rungs.
• Listeners gain real-world examples of how large enterprises navigate market disruption, labor shortages, and evolving consumer demand.

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In summary:
Lowe’s is betting on a hybrid of technology and human touch to stay ahead, with workforce development central to its long-term strategy. Even as the luxury sector weathers geopolitical storms in the Middle East, global demand and the “K-shaped” economy keep the sector on solid footing. All this plays out against a challenging economic backdrop for America’s small businesses, continuing trade policy friction, and persistent inflation and affordability concerns.

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Transcript

[Katie Kramer]

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[Joe Kernan]

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[Andrew Ross Sorkin]

FDIC subject to credit approval.

[Marvin Ellison]

Bring in show music please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, home improvement retailer Lowe's launching a new subscription service. CEO Marvin Ellison sits down to tell us all about it.

[Marvin Ellison]

For $99 a year, you get two home visits from a Lowe's associate working in the local store. This is not a third party, it's not a contractor.

[Katie Kramer]

How Lowe's aims to address the trade skills gap in America's workforce and why it is critical to do so.

[Marvin Ellison]

This is, I believe, not only a need for the construction trade. This could be a national security issue because of all the infrastructure repairs and work needed over the next decade, plus

[Katie Kramer]

housing affordability crisis and the next generation labor market.

[Marvin Ellison]

What I do know is AI can write coal, but AI can't climb a ladder and it can't fix a hole on your roof.

[Katie Kramer]

The Iran war taking a toll on LVMH's luxury sales, but our wealth reporter Robert Frank says there's good news for the likes of Krug and Dom Perignon

[Andrew Ross Sorkin]

in this wine and spirits business. People are drinking less but drinking better.

[Katie Kramer]

All that today with our eternal optimist Joe Kernan.

[Joe Kernan]

I just think a lot of times the consensus is wrong on everything and it's always darkest right before the dawn.

[Katie Kramer]

And Kelly Evans, I'll be sure to

[Kelly Evans]

be more dismissive so that it can

[Katie Kramer]

Please it is Tuesday, April 14, 2026. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand by in 3, 2, 1.

[Kelly Evans]

Good morning and welcome to Squawk Box here on CNBC we're live the NASDAQ marketsite in Times Square. I'm Kelly Evans along with Joe Kernan. This morning. Becky and Andrew are off. How many push ups today?

[Joe Kernan]

None, because I had done three days in a row and then I did him here.

[Kelly Evans]

I was going to ask if you were sore.

[Joe Kernan]

No, I don't get sore anymore. But you're chipper because it's Tuesday.

[Kelly Evans]

I think I'm overcompensating.

[Joe Kernan]

No, tomorrow. Tomorrow there's a reason it's called hump day. You'll see. Tomorrow is going to be tougher for you. But thank you for being here.

[Kelly Evans]

Thank you for having me. And we talked about the turnaround yesterday that we saw in the markets. 300 up, 300 on the Dow.

[Joe Kernan]

Goldman recovered but was still down 17 points. So add that. Yeah, that's like, like another 100, but another 100 on the Dow, we would have 400 probably.

[Kelly Evans]

Yeah. Treasury yields, by the way, always worth keeping an eye on. But again, crypto, and I'm sorry, crude prices have moderated. There's the 10 year at 428.

[Joe Kernan]

So actually 96.

[Kelly Evans]

Yeah, 96 for WTI. 90.

[Joe Kernan]

They didn't have crypto in the. For you to do. And I got. No, make her do. Make her do Bitcoin. Because every time you talk about like at 27,000 when you were laughing at me.

[Kelly Evans]

I was not.

[Joe Kernan]

You were laughing at me at a few years ago.

[Kelly Evans]

Oh, yeah, last year. I don't, I can't remember now, but you're right. I.

[Joe Kernan]

Yesterday it was under 70 and now it's 74.

[Kelly Evans]

It was 70 yesterday.

[Joe Kernan]

Well, it might have been 71, but it had a nice.

[Kelly Evans]

I'll be sure to be more dismissive

[Andrew Ross Sorkin]

so that it can please.

[Joe Kernan]

And they were. So you bought I bonds.

[Marvin Ellison]

Oh, gosh.

[Kelly Evans]

I.

[Joe Kernan]

It's $10,000. It's so you get what kind of interest? With the interest, you can go to dinner but don't get an appetizer, you know.

[Kelly Evans]

And at the time, it was free money. It was. It felt like the one way you could benefit from the inflation surge during the Biden administration. And it turns out.

[Joe Kernan]

What did I tell you? You should have bought at 30.

[Kelly Evans]

Was it Bitcoin?

[Joe Kernan]

No.

[Kelly Evans]

Oh. Oh, Versant.

[Joe Kernan]

You work for the company.

[Kelly Evans]

I never said it was a bad idea.

[Joe Kernan]

I thought it was a great idea. It's the only stock you can buy.

[Kelly Evans]

I'm not even sure we can buy it. But see, you're.

[Joe Kernan]

What do you mean you're not sure you can buy?

[Kelly Evans]

You could if you buy, I don't think anyone's going to give you a hard time about it. But if I buy it, I'm going to be the one person who gets in trouble.

[Joe Kernan]

We could own Comcast. We could, but I don't.

[Kelly Evans]

You're fine. Me, I don't know.

[Joe Kernan]

Yeah. Because I'm so black and white. I'm so powerful.

[Kelly Evans]

United Airlines CEO Scott Kirby reportedly floating the idea of a combination of his company with American Airlines. Reuters says the United CEO pitched the idea to President Trump during a meeting on February 25 and he told Trump administration officials a combined United American would be a stronger competitor in international markets. That's the pitch the tie up would create. The world's largest airline. United, American and the Department of Transportation did not comment on the reports. But in an interview with CNBC last week, I believe on Power Lunch, fabulous afternoon show, by the way, groundbreaking Secretary Sean Duffy indicated that the Trump administration is open to airline M and A. Yeah.

[Andrew Ross Sorkin]

Who knows who's going to match up, right? There's always chatter, but is there room for some mergers in the aviation industry?

[Joe Kernan]

Yeah, I think there is.

[Andrew Ross Sorkin]

But, but I think here in the United States.

[Kelly Evans]

Yeah.

[Joe Kernan]

Yeah, I think so. Delta's number one.

[Kelly Evans]

What, what's your.

[Joe Kernan]

I would love it because I love United because of Newark, because I use it all the time. I have had some mixed experiences recently with American and people that I know have had some mixed experiences. I think they could use, you know, but I don't, I'm not an investment banker but I'd like to be able to have all of American's routes or routes, whatever it is, come out of Newark and be under the United umbrella.

[Kelly Evans]

It'd be good for you, I guess, if you didn't care if you were price insensitive. But I just find, I guess they blocked Spirit and Frontier. Was that before this administration must have been.

[Joe Kernan]

And that was tiny. Yeah. So if they keep the Dallas hub, I'm sure American.

[Kelly Evans]

We have new data on how American small businesses are feeling. Steve Liesman joins us with those findings. Hi, Steve.

[Steve Liesman]

Good morning, Kelly. The NFIB small business optimism index for March plunging to the lowest level since the Liberation day tariffs in April 2025 underscores how the Iran war and the oil price surge are hitting confidence levels for both consumers. Data we had earlier and and for small businesses. The National Federation of Independent Business, their optimism index falling to 95.8, down three points, the biggest drop since April when Liberation Day tariffs were announced. The outlook for earnings net 20, net negative 25%. That's down 11 points. Those expecting the economy to prove net positive 11, but that's down 7 points and a zero on plans to increase employment, in part because of pessimism but also difficulty in finding workers. Overall, eight of 10 categories declined, two unchanged on the month. An Iowa retailer quoted in the survey saying, the overall state of my business is good at the moment. However, with all the uncertainty in the economy, tariff surcharges, higher freight charges, skyrocketing insurance rates and the war with Iran, I feel to cover the increased costs, I may price myself out of the market. The report showed the percent raising selling prices remains elevated, but little change from the prior month. Plans to increase prices, they actually fell, a possible sign of concern that consumers will reject higher price tags. The separate uncertainty index rose 4 points to 92, the highest level since September. It's been a feature of the Trump presidency that optimism is higher among small business owners than under Biden, but uncertainty has also been elevated over that period of time. The good news is the optimism index recovered from the April lows after President Trump backed off his harshest tariffs, but it has not regained the levels that accompanied his election. For now, small business owners who. Well, optimism goes along with the plunge in consumer confidence as a fallout from the war. Neither may be decisive for the economy, but both bear watching.

[Kelly Evans]

Guys, that's a pretty bad reading, obviously. And you know, we get all these yesterday, we're talking about CEO confidence. Steve, that was at, what do you say? It was like all time high or it was up significantly, Something to that extent.

[Joe Kernan]

But consumer sentiment was low. It's just when you said Liberation Day, I was thinking maybe this is a great indicator, you know, if that's what it was, a great time to buy in terms of stock.

[Steve Liesman]

Yeah.

[Joe Kernan]

If you know what I mean.

[Steve Liesman]

I mean, if you think it's good policy, Joe, to scare the bejesus out of small business owners.

[Joe Kernan]

You talk about policy. I'm just talking about buying, you know, just not panicking when you shouldn't be panicking. Talking about, you know, when you buy something when everyone else is selling you. You would have made how much money buying on Liberation Day? Steve, you can, you know, you can complain about policy all you want, but I'm just talking about, you know, during COVID everybody was selling in, in March and April of, of that year and, and this, the S and p went to 2,300 and now it's at 7,000. So. Oh, that was horrible. Yeah, it's horrible. And maybe the policies are bad. I'm Just making the point that maybe that tells you we've, we've got a V in right now on the S and P. I don't know whether it lasts and we could go to new lows. So. But if you look at an S and P chart right now we're almost back to 7,000. Steve.

[Steve Liesman]

So Joe, can I make, I like to make one point on that and sort of incorporating what Kelly said, which is that the executive survey that Kelly's talking about is largely talking about big businesses. The stock market you're talking about is largely big businesses. I think what we're talking about here is small businesses and their ability to cope with the uncertainty that's out there and the changes in policies and tariffs and all that other stuff. I think it's worse for small business and I think there's a longer term erosion and difficulty that they have.

[Kelly Evans]

I feel, I hear Barry Knapp here, he was here with us recently. But his whole thing is it's not just K shaped, it's K shape for business. Exactly what you're saying. That's why he thinks the rate should come down, you know, sell the balance sheet, seeping the curve, whatever. But he thinks small businesses are, you know, so it's not just policy, it could be rates too.

[Steve Liesman]

Yeah, I mean the things that are driving the economy right now is a big business thing. You think about the investment and all that stuff, that's, that's just big, big, big, big business and that's not something. And, and the way that small businesses coping, some are getting through and if you lose that generation of jobs, that comes a small business, I'm not saying you'll lose it, but you saw that the plans to hire a zero, you saw, you can read in the commentary that they're affected by the immigration rules that are out there, the ability to find skilled workers. So. But Joe is right because the investment thesis is one based on big businesses. And I guess you would make money as I cover the macro economy and the whole economy. I guess this is a warning flag and a flag to think about what's going on at the small business level.

[Joe Kernan]

I hear you on the, the how it affects smaller businesses differently and maybe worse. But I'd still bet you the overall climate can be misjudged and the future climate of business can be misjudged equally by big and small businesses. And whatever overall economic conditions are affecting the big businesses probably are affecting the small business maybe differentially based on not being able to hire great accountants for tariffs and all that stuff. And not being able to deal in as well as big companies. But I just think a lot of times the consensus is wrong on everything. And it's always darkest right before the dawn. And so many times in the past when things seem really dire, that's the time the hard decision is to buy and it ends up being the right decision, or the easy thing is to sell. Oh, my God.

[Steve Liesman]

Let me make two points off of that. First of all, if you're saying that, which I think is what you began saying, is that these uncertainty and optimism indices can be contrarian indicators, you're 100% right, that that can often be the case. And I have long said that, you know, don't follow necessarily what they say. Watch what they do, especially with consumers. Confidence is one thing, and like I said at the end of my report, it's not decisive for the economic outcome. But I'll add one other thing, Joe, which I think is really important, which is that one of the things that looks like it's happening with tariffs is something where big business is taking market share from small business, and that's because of the tariff. So in that context, it's something else that's, that's going on here where the inability to either pass along the price increases. And you saw that Iowa retailer we quoted. There are many comments in that vein. So it's something you want to think about where what is the balance in policy here between the policies that benefit big business that can go in and get a tariff exemption and small business? So it's worth watching here. Yeah, you're right. All confidence numbers can be consumed contrarian indicators. But it also is important to listen to what businesses are saying.

[Joe Kernan]

Okay, thanks, Steve.

[Andrew Ross Sorkin]

Cheese will be next.

[Katie Kramer]

Coming up on Squawk Pod, a rare interview with the CEO of Lowe's, Marvin Ellison. The company has launched a new subscription service that come to your house. It's called Home Care Plus.

[Marvin Ellison]

We're able to do these very basic maintenance services. That customer, if they have a great experience, they come back and they buy more and they want to engage with Lowe's for other larger projects.

[Katie Kramer]

But those maintenance calls only go so far. Ellison addresses how America's housing affordability affects his bottom line.

[Marvin Ellison]

We have the oldest housing stock in the history of the US Right now. And so as homes get older, things break, things need to be replaced. But that's just two thirds of our revenue to us for us to see, you know, really accelerated growth. We're going to need housing turnover to come back, and we believe that will require mortgage rates to fall below 6%.

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[Katie Kramer]

welcome back to Squawk Pod

[Andrew Ross Sorkin]

from CNBC standby Joe His Mike Q

[Joe Kernan]

home improvement retailer Lowe's recently announced several new initiatives. A subscription business. We're going to talk about that. It sounds too good to be true. Offering in home services to the members and the company's foundation is investing 250 million to train tradespeople and address an urgent workforce shortage Low CEO Marvin Ellison is here on set, joining us for an exclusive interview on CNBC. Welcome.

[Marvin Ellison]

Pleasure to be here.

[Joe Kernan]

We started with the $99. I said no way. And you were explaining all the things a subscription service will do for you for $99. And I said, I have dealt with these local heating and air conditioning and they have something similar cost a lot more and they don't show. They don't show at the beginning of spring or the beginning of fall. You'll show twice a year. Change Filter what all will you do for $99?

[Marvin Ellison]

So we call it Home Care Plus. It is a subscription service newly launched. It ties to our loyalty program, which is our Lowe's rewards program. And for $99 a year you get two home visits from a Lowe's associate working in the local store. This is not a third party. It's not a contractor. It's an actual associate that works in your local store. They'll Come in, they'll do an assessment, but they will change all your filters, your dryer vent lubricate, your garage, their flush, your electric water heater, all your smoke detector batteries. And I have an advice for anybody over 40, never get on a ladder taller than 6ft because bad things can happen. And so when you have those hard to reach light bulbs, we change all those bulbs. It's a very simple program. It's really about human capital. It's about leveraging the uniqueness that we have. And it's great associates and it's something we just launched and we're extremely excited about it.

[Kelly Evans]

Are they trained to do that?

[Marvin Ellison]

They are.

[Kelly Evans]

It's not just going to be like the person you know, they're going to show up and say yeah sure. You know, this is someone who's a, who's when you say associate, these people are trained to know how to do all this.

[Marvin Ellison]

Absolutely.

[Kelly Evans]

These are expensive systems.

[Marvin Ellison]

You know, I mean, no, these, we're trained, I mean we, we basically designate a certain number of associates per store. We give them specialized training. They have a uniquely customized vehicle that has product in it in case the product is not at the home where it should be. And again, this is, this is about the long term value of the customer relationship and this is really about us leveraging human capital into, in a way that is uniquely positions us to do that. So we're excited about it. Just launched, response has been great. We'll start to market it a little bit more aggressively. But again this is our way of building a long term relationship with our customers and doing something that most companies can't do. Who thought and that's leverage our associates.

[Joe Kernan]

There are other companies that do this, but who decided, you know, maybe we should look into this at Lowe's. How did it come about and how long ago?

[Marvin Ellison]

Well if really it came about last year we piloted this, you know, for eight months in a couple of markets just to understand a, is there customer demand? B, can we do it without disappointing the customer? And we got yes on we can do it really well and be the customer. Response was incredibly positive. And really it was something that we thought about, you know, about quitting differentiation. You know, in any business you always ask the question, how can you do something uniquely different from the market?

[Joe Kernan]

Make money on this?

[Marvin Ellison]

Yeah, we can.

[Joe Kernan]

In addition to this, branding and loyalty

[Marvin Ellison]

and we can make money. But more importantly than making money, we create incredible long term relationships with customers. Because what we're learning is as we enter the customer's home, we're able to do these very basic maintenance services. That customer, if they have a great experience, they come back and they buy more and they want to engage with Lowe's for other larger projects. But our associates are trained just to do those services. They're not in there to do anything other than that. This isn't about trying to do anything other than leveraging a unique capability we have, which is trained associates, local stores, product and differentiation.

[Kelly Evans]

And maybe you've got a light bulb to replace. Yeah, you're doing vocational training as well or investing in that. That's. They say the area that is more immune. I'm not a big pessimist about AI, but I think that if you are, you look at vocational training and think, you know, plumbers and all that. The counterpoint to that that I've heard is, you know, people. And we've done this a little bit ourselves, you can get on Gemini or whatever and say, you know, hey, this is happening with the dishwasher. What should I do? And it'll say, okay, take this piece out. And maybe it would help people actually replace me. That first call. Need for. For someone to come to the house.

[Marvin Ellison]

Yeah. I mean, going back to your point about skilled trades, I mean, we're, as a Foundation, we're investing $250 million to create 250,000 skilled trades positions. So it's a combination of we're investing in skilled trades, and when I say skilled trades, I'm referring to electricians, plumbers, H vac professionals, etc. These are individuals where we have an overall need in the marketplace. We estimate that there's roughly 350,000 net new skill traits people require this year just to fill the jobs that are available.

[Kelly Evans]

But are you experiencing, like, what's your skin in the game to kind of train this workforce? It. Because you need that workforce built for some of the initiatives we're talking about.

[Marvin Ellison]

No, it's really. It's really our. Our attempt to do something for the country. This is, I believe, not only a need for the construction trade. I mean, this could be a national security issue because of all the infrastructure repairs and work needed over the next decade. We simply don't have the skilled trades to do it. So our foundation is making this $250 million investment with the goal to create 250,000 skilled trades positions. In addition to that, you know, 40% of all skilled trades employees today are going to be retiring over the next five years. So not only do you have a 350,000 net need, but you have 40% of the existing workers that's going to be retiring. And so we want to get off the sidelines as a company, step up and do something to address this. And we're challenging all other companies out there. Let's take a look at this need. Because AI is going to create short and long term unique differences in our workplace. But like you, I'm not an AI pessimist. As a matter of fact, I mean, we're fully committed in AI as a company. We partner with in video, Palantir, Open Air, really as a platform for our virtual assistant that we call Milo, that we get a million questions a month on right now. And so it's an incredibly powerful tool for customers and for associates. But what I do know is I can write code, but I can't climb a ladder and it can't fix a hole on your roof. And so you're going to need a combination of AI and a combination of skilled trades for the future of our country. And so we're committed to that morphine

[Joe Kernan]

house business rates, mortgage rates backed up. They were down below 6% percent every third of a point. A million people can't afford a home under those mortgage rates. Are you a will Lowe's and Home Depot do better when people can't move to a new home because they're doing do it yourself improvements or is. You saw the housing number was terrible yesterday, the day before when that came out. How's the business for you right now with inflation and tariffs and everything else?

[Marvin Ellison]

So, Joe, business is actually pretty good for us. You know, we, we gave guidance that we believe we'd have positive growth in 2026 from a revenue perspective. We think the home improvement market is going to be flat. And look, we have historically low housing turnover in the country right now, and that is one of the key drivers of our business. However, 2/3 of our revenue is maintenance and repair. 2/3. And so to your point about aging homes, we have the oldest housing stock in the history of the US right now. And so as homes get older, things break, things need to be replaced. But that's just 2/3 of our revenue to us. For us to see, you know, really accelerated growth, we're going to need housing turnover to come back and we believe that will require mortgage rates to fall below 6%. And to your point, we're back up now. We're hoping the rate environment will normalize. But again, in the meantime, we think we can run a really effective business. But in order for us to get the growth that we want to see year over year, we're going to have to see mortgage rates get below 6%

[Joe Kernan]

so that you connect the dots. So affordability and inflation and oil prices, if that all stays high, interest rates don't come down, mortgage rates stay high, and that's a more challenging environment.

[Marvin Ellison]

It is our. Historically, the demand drivers of our business is age of housing stock, disposable personal income of consumers, and overall consumer sentiment. You know, our customers a little unique. The average Lowe's customer, you know, has a household income of over $100,000. They're homeowners, they have roughly $400,000 in equity, and they've received wage increases. So we have a very resilient consumer. Having said that, this housing market has been really challenging, and I'm incredibly pleased with the performance of our business. In spite of some really, really difficult

[Joe Kernan]

housing metrics in tariffs, managing through that as well at this point, you know what you're doing.

[Marvin Ellison]

Yeah.

[Joe Kernan]

Enough experience.

[Marvin Ellison]

Yeah. You know, the, the Trump 45 administration gave us a view of tariffs and how to manage it. So we put some systems and processes in place. This has been a uniquely difficult environment. We've managed it exceptionally well. I give you an interesting data point. When I arrived at the company in 2018, 90% of our containers came from China from an import perspective. And today, fast forward, 60% 60 of everything we sell is produced in the US 15% out of China, 10% in Mexico, and the rest around the globe. So. So the Lowe's team has done an incredible job of diversifying our global footprint. It doesn't mean we're immune to tariff, because we have to deal with the tariff cost increases like everyone else. We managed it exceptionally well. We think that the first half of this year we'll still manage through it, but we think in the back half, we start to get back into normalized costs, normalized pricing. But we've done a nice job of managing a really difficult and very fluid situation.

[Joe Kernan]

So would you give the economy a B plus where it is right now? Because with all the uncertainty and war and affordability and everything that we hear, I mean, when I read the front page of papers, we're like at a C minus, but then we have people, they come in. So the consumer right now and the overall economy. But how does it seem to you for 2000?

[Marvin Ellison]

Well, I'll speak specifically to Lowe's and our environment. So, as I stated earlier, we believe the home improvement market is going to be flat for 2026. I think if you're flat, that's probably closer to a C You know, b. But we are going to take market share. And so in a flat environment, we're going to grow revenue. And that's really important for us because we want to take share. We want to continue to create the differentiation I talked about with our. With our Home Care plus, you know, subscription service program. These are unique things we're doing to get customers to come and take a shot at Lowe's versus the competition. So we believe in this current environment, we still can grow positive revenue. Now, what we like to see, improved housing, turnover. Absolutely. What we'd like to see, improve, you know, consumer sentiment. We would, but we believe even in spite of those things, we can run an effective business. We can grow revenue, we can serve our customers well, and we can be really competitive.

[Joe Kernan]

Well, it's good to have you on. If I sign up for that, can I keep doing the light bulbs myself? Can I. That's the one thing at home that I'm still like, you can.

[Kelly Evans]

Can do it.

[Joe Kernan]

I'm still able to do. And if you take that away from

[Marvin Ellison]

me, Joe, don't get on a ladder taller than six feet.

[Joe Kernan]

All right, I can do the. The lower lamps. You do those. I have put a new flapper on. I have on. On a. You know what? A flap on a toilet. A flapper on a toilet.

[Kelly Evans]

I have.

[Joe Kernan]

I. I have done that. I got the right size. I did. I did everything correctly. But. But most of the time, DIY does not. That's not something that happens.

[Marvin Ellison]

So, Joe, we have a virtual assistant called Milo that you can go online and it can literally walk you through.

[Joe Kernan]

It. Better be really good.

[Marvin Ellison]

It is really good. It's on an OpenAI platform. In concert with them, you can go online. Not only can you ask a question on how to do a project, you can request a video on. Show me how to do it, and it'll give you the video and then give you product recommendations. So we got it all covered. So we're. We're leveraging skilled trades, we're leveraging AI we think it's a combination of both of those things, and we think that's going to be important for the future of our country.

[Joe Kernan]

Thank you. Spending all this time with Marvin Ellison, CEO of Lowe's.

[Katie Kramer]

Still to come on, squawk pod. The Iran war taking a toll on lvmh, the parent company of brands like Louis Vuitton, Tiffany and Dior. Luxury sales in the region, region which rely on tourism are down. But the rest of the world is picking up a lot of the slack. CNBC's Robert Frank on the Pulse of

[Andrew Ross Sorkin]

the Wealthy the theory on the K shaped economy was that the top of the K shaped economy is doing better because of the wealth effect from stock markets.

[Joe Kernan]

Right?

[Andrew Ross Sorkin]

We've had a very volatile month in stock markets, so there was a concern that the wealthy consumer was going to pause spending in March because of what we're seeing in stock markets. At least on the luxury side that has happen.

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[Joe Kernan]

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[Katie Kramer]

This is Squawk Pod.

[Kelly Evans]

You're watching Squawk Box on cnbc. I'm Kelly Evans along with Joe Kernan.

[Joe Kernan]

This morning, the war in the Middle east crushing the sales of luxury goods maker lvmh. Robert Frank joins us now with more.

[Andrew Ross Sorkin]

Joe, good morning. Well, LVMH shares lower today, down 27% of the for the year. The company yesterday reporting sales growth of just 1% for the quarter that was lower than expected and due mainly to a big drop in the Middle East. Now the company's Middle east sales falling by 50% in March. That was after the start of the Iran war. Luxury sales in that region are very dependent on tourists, especially the big malls in Dubai. Company CFO saying there are no real signs of improvement in April since we haven't seen tourism pick up again. The hardest hit segments there were watches and jewelry. But fashion and leather goods also getting hit now offsetting the Middle east which accounts for 6% of the sales was strength in the U.S. the company said it hasn't seen any slowdown in spending by Americans on luxury and China also showing signs of improvement with sales improving both within China as well as Chinese nationals spending abroad. The CFO declined to give an outlook on the Middle east. But globally the Louis Vuitton and Dior brands continue to dominate and a turnaround at Tiffany based on new stores and higher end jewelry also showing results. She said that in this wine and spirits business people are drinking less but drinking better. So this is great for a company that's Dom Perignon, Krug, Cheval Blanc, Ekim, all the high end brands rolls off your tongue.

[Kelly Evans]

Dom Perignon was started by a monk by the way.

[Joe Kernan]

Yeah Dom, I saw the other day that Veuve Clicquot was started by a lady and 150 years ago and jeopardy

[Andrew Ross Sorkin]

Champagne sales actually doing better. They had started to decline last year and the year before was was flatter declining and now we're starting to see see Champagne sales that had been a fact but I thought was really because the theory on the K shaped economy was that the top of the K shaped economy is doing better because of the wealth effect from stock markets.

[Joe Kernan]

Right.

[Andrew Ross Sorkin]

We've. We've had a very volatile month in stock markets. So there was a concern that the wealthy consumer was going to pause spending in March because of what we're seeing in stock markets at least on the luxury side that hasn't happened a little bit.

[Joe Kernan]

Not that we didn't not even a correction in the asset.

[Kelly Evans]

We're back to where we were by the way for all but there were

[Andrew Ross Sorkin]

moments in March where it wasn't no doubt it wasn't and we feel like

[Joe Kernan]

there should be more happening with some people do. One of the weirdest things that I'm still coming to grips with was right at the beginning of the war when Iran attacked all its neighbors. No one I don't know whether anyone predicted that in the Gulf or understood it in their you know they're evil but they are crafty in certain ways. There was a method to the madness and look at this.

[Steve Liesman]

Look at what those who lived and

[Kelly Evans]

worked in Dubai though Dubai I'm not hearing that they're leaving. Nobody that I'm talking to is no

[Joe Kernan]

but there's no tourists and there's no

[Andrew Ross Sorkin]

tourists and I think Dubai's reputation as a secure and stable place for capital and people has been damaged. There's no question Dubai going to go to Hong Kong.

[Kelly Evans]

I mean, what do you Singapore there?

[Joe Kernan]

Yes.

[Andrew Ross Sorkin]

A lot of the growth in Dubai is fueled by wealthy Chinese leaving China or Hong Kong. And it's not that that these people will leave Dubai. It's what that growth will look like going forward because the reputation, it's going to take a while.

[Kelly Evans]

And the Trump administration helped that, you know, encourage that. Robert, thanks.

[Katie Kramer]

And that is Squawk Pod for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, Andrew Ross Sorkin and this week Kelly Evans. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest artist takes and analysis from our TV show right into your ears. Please follow Squawk Pod wherever you like to get your podcasts. We'll meet you right back here tomorrow.

[Andrew Ross Sorkin]

We are clear. Thanks, guys.

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