Lowe’s is using artificial intelligence to simplify its assortment and reduce inventory levels, a strategy that continues to have measurable impact on its latest quarterly results.
Lowe’s reported $17.2 billion in inventory at the end of the third quarter, down roughly $400 million from the prior year. Chief financial officer Brandon Sink told analysts the decrease came “even after absorbing nearly $600 million in inventory related to acquisitions and increased tariffs.” He said improvements were tied to “ongoing inventory productivity initiatives.”
Lowe’s is in the middle of a multiyear effort to reduce its product assortment by about 15% by the end of 2025, focusing on underperforming and duplicative SKUs. Executive vice president of merchandising Bill Boltz described the effort on the call as a “disciplined process” tied to category resets and productivity improvements.
The SKU reductions are supported by a technology overhaul that began last year. Lowe’s announced in 2024 that it would deploy AI-driven forecasting and replenishment technology from RELEX Solutions, implemented in partnership with Accenture, to improve seasonal planning and inventory visibility across stores and distribution centers.
These systems provide the data backbone for determining which SKUs stay, which go, and how quickly items should be replenished.
Lowe’s has also rolled out AI tools that give employees and customers improved access to product and inventory information:
- Mylow virtual adviser, introduced in March 2025, uses generative AI to answer project questions and recommend products on Lowes.com and the Lowe’s app, according to Digital Commerce 360.
- Mylow Companion, deployed chainwide on May 5, 2025, provides store associates with real-time access to product details, stock information, and project guidance. Lowe’s said it is the first large-scale AI assistant deployed across a home-improvement retail workforce.
Lowe’s has also built AI-powered digital twins of all stores, updated several times per day, and used to test layout changes and evaluate product placement.. The simulations allow teams to model SKU removals and category resets before executing changes in physical locations.
To support these applications, Lowe’s is leveraging Dell Technologies and Nvidia to run AI workloads closer to stores. According to Dell’s disclosures and industry reporting, the systems support tasks such as forecasting, computer vision, store simulation, and project guidance.
Taken together, the company’s earnings disclosures and public statements show:
- Inventory is down year over year, even with added acquisition-related stock and tariff impacts.
- Gross margin improved, with executives directly attributing the gain to SKU exits and better inventory productivity.
- AI tools are embedded across forecasting, planning and store operations, rather than limited to pilot deployments.
Lowe’s said it will continue to cut SKUs through 2025 while expanding its use of AI tools across more categories and store processes. The retailer told analysts it expects inventory discipline and SKU productivity to remain central to its operating plan as it enters 2026.
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