Lowe’s Companies, Inc. reported second-quarter fiscal 2026 net sales of $26.0 billion, an 8.3% increase year-over-year (y-o-y), driven by ongoing contributions from its acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG). Consolidated comparable store sales edged up 0.2%, marking the company’s fifth consecutive quarter of positive comps, led by sustained momentum in Pro customer demand, home services, and a 15.7% expansion in online sales, which helped mitigate persistent headwinds in discretionary DIY big-ticket spending.
Net earnings stood at $2.40 billion with diluted EPS flat y-o-y at $4.27. Excluding $96 million in pre-tax acquisition-related expenses, adjusted diluted EPS grew 1.6% to $4.40, benefiting from a $0.11 per share contribution from IEEPA tariff refunds. Operating income reached $3.55 billion on an operating margin of 13.67%, while gross profit was $8.58 billion (33.04% gross margin).
Note: Lowe's FY'25 ended on January 31, 2026. Q2'26 refers to the quarter ending July 31, 2026.
The company updated its full-year fiscal 2026 guidance outlook to the lower end of its previous target ranges to reflect first-half results and persistent macro pressures on discretionary DIY spending. The company now expects total net sales of approximately $92.0 billion (down from its previous range of $92.0 billion to $94.0 billion) and comparable store sales to be roughly flat. Full-year operating margin is projected at approximately 11.2% on an as-reported basis and about 11.6% on an adjusted basis. Diluted earnings per share are expected to be approximately $11.75 on a reported GAAP basis and around $12.25 on an adjusted basis (down from prior adjusted EPS guidance of $12.25 to $12.75).
The adjusted figures continue to exclude approximately $96 million in pre-tax intangible asset amortization expenses tied to the acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG). The updated outlook reflects ongoing strength in Pro contractor demand, online sales, and home services, balanced against continued consumer hesitation surrounding higher-ticket, discretionary home improvement projects.
Lowe's EBITDA Margin: From 2019-2021, Lowe's improved margins from 11.6% to 15.3% by streamlining its operations, supply chain, and cutting down heavily on its SG&A expenses. However, this value was down to 13.3% in 2022, due to the rampant inflation before again growing to 16.3% in 2023. Productivity initiatives and lower transportation costs drove the margin increase for the year. However, the retailer's margins were down to 14.8% in 2024. Slower housing turnover and higher borrowing costs have kept some customers on the sidelines. In 2025, the figure declined to 14.3%. Margins declined due to a combination of structural mix shifts, cyclical demand weakness, and one-off costs.
Lowe's is the world's second-largest retailer of home improvement products, after Home Depot. Through its 1,700 stores spread across the U.S.(having exited from Mexico and Canada), Lowe's offers a wide range of home improvement products and installation services to individual homeowners as well as professional builders. In addition to the physical stores, consumers can buy these products through the company's dedicated website.
Lowe's has deep penetration levels in the U.S. Lowe's main selling point is that it outshines its main competitor, Home Depot in terms of the in-store shopping experience for consumers. This has forced Home Depot to upgrade its store environment and provide better customer service. Also, Lowe's is more focused on the do-it-yourself niche while its main rival's sales are divided equally into pro sales and DIYs.
The U.S. home improvement retail segment remains the most significant contributor to Lowe's valuation, supported by its nationwide store footprint and broad product assortment.
Lowe's operates a large network of stores across the U.S., enabling strong market penetration and convenient access for both DIY and Pro customers. Its brand recognition and scale support steady traffic and vendor relationships.
The company's increasing focus on professional customers provides more predictable demand and higher ticket transactions. Investments in Pro services, supply chain, and product offerings are strengthening its competitive positioning despite near-term margin trade-offs.
Demand for home improvement products remains closely tied to housing activity and interest rates. Elevated mortgage rates have dampened DIY spending, and a sustained recovery in housing will be critical for accelerating growth.
Lowe's is prioritizing disciplined capital allocation with relatively low capex and a focus on free cash flow generation. This supports shareholder returns through buybacks and dividends but reflects a cautious stance on near-term growth.
The continued expansion of the Pro segment is reshaping Lowe's business mix. While this enhances revenue stability and repeat business, it also introduces margin pressure, making execution critical for long-term profitability improvement.
