Lowe's CEO Cites Pressure on Discretionary DIY Spending, Cuts Full-Year Guidance

Lowe's Companies shares fell in premarket trading Wednesday after the home improvement retailer reported mixed fiscal 2026 second-quarter results and lowered its full-year outlook below Wall Street expectations.

Lowe's Q2 Earnings Beat, Revenue Misses

Lowe's reported net earnings of $2.4 billion, with GAAP diluted earnings per share of $4.27, flat compared with the same period last year.

Adjusted earnings per share rose 1.6% to $4.40, above $4.33, surpassing the analyst estimate of $4.22. Both GAAP and adjusted earnings included an 11-cent benefit from IEEPA tariff refunds.

Net sales rose 8.3% to $25.96 billion, up from $23.96 billion last year, but missed the $26.16 billion expectation.

Comparable sales grew 0.2%, supported by strong performance in the Pro channel and home services. Online sales increased 15.7%. However, continued pressure on discretionary DIY spending weighed on demand.

"Ongoing growth in Pro, online, and home services drove our fifth consecutive quarter of positive comparable sales, despite pressure on discretionary DIY spending," said Chairman, President and CEO Marvin R. Ellison.

He added that the company remains focused on executing its Total Home strategy and investing to support growth and profitability in a dynamic near-term environment.

The quarter included $96 million in pretax charges related to the acquisitions of Foundation Building Materials and Artisan Design Group.

As of July 31, 2026, Lowe's operated 1,761 stores, representing 196 million square feet of retail selling space.

Gross Margin Narrows, Operating Income Rises

Gross margin narrowed to 33.04% from 33.81% last year. Operating income rose to $3.55 billion from $3.47 billion, while operating margin declined to 13.67% from 14.48%.

For the first six months, operating cash flow totaled $7.01 billion, compared with $7.61 billion last year. Capital expenditures were $1.06 billion.

Lowe's ended the quarter with $3.17 billion in cash and cash equivalents and paid $673 million in dividends during the quarter.

Lowe's Cuts 2026 Outlook

Lowe's lowered its fiscal 2026 sales guidance to approximately $92 billion from the previous range of $92 billion to $94 billion, below the analyst estimate of $93.35 billion.

The company now expects adjusted earnings per share of approximately $12.25, down from the prior range of $12.25 to $12.75, missing the $12.88 estimate.

Lowe's expects GAAP earnings per share of approximately $11.75, flat comparable sales, an operating margin of approximately 11.2%, and an adjusted operating margin of approximately 11.6%.

The outlook includes tariff refunds recognized in the second quarter but excludes potential additional refunds in the second half of the year.

LOW Stock Performance: Lowe's shares fell 3.54% to $208.01 in premarket trading Wednesday.