Lowe's Companies, Inc.
LOW · NYSE
Next quarter
Expected to report Nov 18, 2026 — estimated from last year’s reporting date.
Consensus is $2.90 EPS for Oct 2026 across 12 estimates, ranging $2.83 to $3.15.
LOW Jul 2026
- 4.27%
- $4.22
- $4.40
- —
- $25.96B
Reported results
- $25.96B
- 33.04%
- $3.55B
- 13.67%
- $2.40B
- $4.27
Highlights
- Adjusted earnings: Adjusted diluted EPS was $4.40, 4.3% above the $4.22 consensus and up 1.6% from $4.33 a year ago; GAAP diluted EPS was $4.27, unchanged year over year.
- Sales growth: Revenue increased 8.3% to $25.96 billion from $23.96 billion, while comparable sales rose 0.2% for Lowe’s fifth consecutive quarter of positive comps.
- Demand mix: Pro and home services remained strong and online sales increased 15.7%, offsetting persistent pressure on discretionary DIY spending.
- Margin pressure: Gross margin declined to 33.04% from 33.81% and operating margin fell to 13.67% from 14.48%, despite SG&A improving to 17.17% of sales from 17.42%.
- Outlook reset: Fiscal 2026 sales guidance is now $92.0 billion versus a prior $92.0-$94.0 billion range, with comparable sales expected to be flat rather than flat to up 2%.
- Earnings outlook: Lowe’s now expects fiscal 2026 GAAP EPS of approximately $11.75 and adjusted EPS of approximately $12.25, the low ends of the previous $11.75-$12.25 and $12.25-$12.75 ranges.
- Tariff benefit: Both GAAP and adjusted EPS included an $0.11 benefit from IEEPA tariff refunds; the full-year outlook includes refunds recognized in the second quarter but excludes potential additional refunds.
- Capital allocation: The company paid $673 million in dividends during the quarter and generated $7.01 billion of operating cash flow in the first half, alongside $1.06 billion of capital expenditures.
Analysis
Lowe’s delivered a modest beat in the second quarter, with adjusted diluted EPS of $4.40 versus the $4.22 consensus, a 4.3% upside. Sales rose 8.3% year over year to $25.96 billion, and net earnings were $2.40 billion, essentially level with $2.398 billion a year ago. GAAP diluted EPS was $4.27, also unchanged from the prior-year quarter, while adjusted EPS increased 1.6% from $4.33 after excluding $96 million of acquisition-related pre-tax costs. The quarter was materially stronger than the preceding reported quarter, when sales were $23.08 billion, operating income was $2.55 billion and diluted EPS was $2.90, though that comparison includes normal retail seasonality.
The defining feature of the print was a mixed demand environment. Pro, home services and online sales supported a 0.2% comparable-sales gain, but discretionary DIY remained pressured. Revenue growth did not translate into margin expansion: gross margin contracted 77 basis points and operating margin fell 81 basis points, with higher depreciation and amortization also reflecting the acquired businesses. Management responded by narrowing full-year sales guidance to $92.0 billion and moving the comp outlook to flat, while setting GAAP EPS at approximately $11.75 and adjusted EPS at approximately $12.25. Those targets include the second-quarter tariff refund but no further refunds in the second half.
Demand and sales mix
- Comparable sales: Comparable sales increased 0.2%, marking Lowe’s fifth consecutive quarter of positive comps, but the result reflected a split between resilient professional demand and weaker discretionary DIY spending.
- Growth engines: Pro and home services were strong contributors, while online sales rose 15.7% year over year. Total sales reached $25.96 billion, up from $23.96 billion, with the increase also reflecting the contribution from recent acquisitions.
- Store footprint: Lowe’s ended the quarter with 1,761 stores and 196.0 million square feet of retail selling space.
Margins and earnings
- Profitability: Operating income increased 2.3% to $3.55 billion from $3.47 billion, but operating margin declined to 13.67% from 14.48% as sales growth outpaced operating profit.
- Gross margin: Gross profit rose to $8.58 billion, but gross margin fell to 33.04% from 33.81%, a 77-basis-point contraction.
- Cost structure: SG&A increased to $4.46 billion but improved to 17.17% of sales from 17.42%. Depreciation and amortization rose to $572 million from $457 million, increasing to 2.20% of sales from 1.91%.
- Earnings bridge: GAAP net earnings were $2.399 billion versus $2.398 billion a year ago. Acquisition-related expenses reduced current-quarter EPS by $0.13 after tax; excluding them, adjusted EPS was $4.40 versus $4.33. Both measures included an $0.11 tariff-refund benefit.
Fiscal outlook reset
- Sales: Fiscal 2026 sales guidance was reduced to $92.0 billion from a $92.0-$94.0 billion range, and comparable sales are now expected to be flat versus the previous flat-to-up-2% forecast.
- Margins: Lowe’s maintained GAAP operating-margin guidance at 11.2%, but narrowed adjusted operating margin to 11.6% from 11.6%-11.8%.
- EPS: GAAP diluted EPS is expected to be approximately $11.75, versus the previous $11.75-$12.25 range. Adjusted diluted EPS is expected at approximately $12.25, versus the prior $12.25-$12.75 range.
- Assumptions: The outlook includes tariff refunds recognized in the second quarter and excludes any additional refunds in the second half. It also assumes approximately $1.6 billion of net interest expense, a 24.5% effective tax rate and up to $2.5 billion of capital expenditures.
Acquisitions and balance sheet
The Foundation Building Materials and Artisan Design Group acquisitions were a visible drag on reported earnings through $96 million of pre-tax expenses in the quarter, primarily intangible-asset amortization. The acquisitions also changed the balance sheet: intangible assets increased to $5.71 billion from $976 million a year earlier and goodwill rose to $3.96 billion from $691 million. Total assets reached $55.88 billion, while long-term debt increased to $35.20 billion from $30.55 billion.
Cash flow and capital
- Operating cash flow: First-half operating cash flow was $7.01 billion, down from $7.61 billion a year earlier, despite higher earnings-related noncash adjustments and stronger accounts-payable support.
- Investment: Capital expenditures were $1.06 billion in the first half versus $1.01 billion a year ago, with full-year spending planned at up to $2.5 billion.
- Shareholder returns: Lowe’s paid $673 million of dividends in the quarter, while first-half dividend payments totaled $1.35 billion and share repurchases totaled $366 million.
- Liquidity and debt: Cash and cash equivalents were $3.17 billion at July 31, down from $4.86 billion a year earlier; the company repaid $2.40 billion of debt in the first half.
