David Lowe on product development
From Graco Inc. (NYSE: GGG) - CFO & Director of Finance, IR, & FFPA - Gabelli PVW Symposium · · GabelliTV
“We invest about 4% a year in product development because in business-to-business environments, where people look to improve productivity and ROI, the best product wins if you can get it into people's hands with high enough quality and support at a reasonable price.”
On , David Lowe, Chief Financial Officer & Treasurer at GRACO INC, spoke about product development during Graco Inc. (NYSE: GGG) - CFO & Director of Finance, IR, & FFPA - Gabelli PVW Symposium on GabelliTV.
About David Lowe
At the Gabelli PVW Symposium on March 17, 2025, David Lowe discussed Graco's business strategy and market conditions. He described the company's focus on niche, sub-billion dollar markets with stable competitors, and noted that Graco invests about 4% of revenue annually in product development. Lowe stated that over the past 20 years, Graco has repurchased more than $2 billion of its stock, achieving a return on investment of approximately 155%. He also said that more than 80% of Graco's manufacturing is based in the U.S., with labor comprising only about 8% of cost of goods sold. Regarding market headwinds, Lowe noted that in 2024, Graco's industrial segment faced strong negative impacts from China and the semiconductor business, though order activity appeared to be stabilizing at lower levels. He pointed to the aging U.S. housing stock—with a median age of 42 years, up from 28 in 2000—as a long-term opportunity for the company's remodel and repaint sector. On tariffs, Lowe said most of Graco's key vendors are domestic or nearby, and that tariffs might add one to two percent to purchase costs, though he acknowledged a lack of complete visibility into vendor sourcing.