Lowe's Reports Flat Q2 Comparable Sales Growth, Narrows Full-Year Guidance
Home improvement retailer posts $4.27 diluted EPS as Pro segment strength offsets persistent DIY headwinds, while management cuts upper end of fiscal 2026 outlook.
Q2 Results Show Modest Growth Amid Mixed Consumer Demand
Lowe's Companies, Inc. reported second quarter fiscal 2026 results that reflected divergent performance across customer segments, with professional contractors and online channels offsetting weakness in do-it-yourself sales. The Mooresville, North Carolina-based retailer posted diluted earnings per share of $4.27 for the quarter ended July 31, 2026, flat compared to $4.27 in the prior-year period (8-K filing, 2026-08-19).
Total sales reached $26.0 billion, up from $24.0 billion year-over-year, while comparable sales increased just 0.2% (8-K filing, 2026-08-19). Net earnings totaled $2.4 billion for the quarter.
Chairman, President and CEO Marvin R. Ellison attributed the performance to "sustained growth in Pro, Online and Home Services" that "led to our fifth consecutive quarter of positive comp sales, despite pressure in discretionary DIY spending" (8-K filing, 2026-08-19). Online sales surged 15.7% during the quarter, while the company noted "persistent DIY macro pressures" (8-K filing, 2026-08-19).
Acquisition Costs Impact Reported Earnings
The quarter included $96 million in pre-tax expenses related to the acquisitions of Foundation Building Materials and Artisan Design Group (8-K filing, 2026-08-19). Excluding these costs, adjusted diluted EPS rose 1.6% to $4.40 compared to the prior year.
Both reported and adjusted EPS figures incorporated an $0.11 benefit from IEEPA tariff refunds received during the quarter (8-K filing, 2026-08-19).
Operating income reached $3.549 billion, representing 13.67% of sales, down from 14.48% in the year-ago quarter. Gross margin compressed to 33.04% from 33.81% year-over-year (8-K filing, 2026-08-19).
Guidance Narrowed to Reflect Current Demand Environment
Lowe's updated its fiscal 2026 outlook, narrowing several key metrics while maintaining the lower end of previous ranges. The company now expects total sales of $92.0 billion, down from the prior range of $92.0 to $94.0 billion, and comparable sales to be flat versus the previous expectation of flat to up 2% (8-K filing, 2026-08-19).
Operating margin guidance tightened to 11.2% from the prior 11.2% to 11.4% range, while adjusted operating margin is now projected at 11.6% compared to the previous 11.6% to 11.8% (8-K filing, 2026-08-19). Diluted EPS is expected to be approximately $11.75, down from $11.75 to $12.25, while adjusted diluted EPS guidance narrowed to approximately $12.25 from $12.25 to $12.75 (8-K filing, 2026-08-19).
Management noted the updated outlook "reflects operational results for the first half of the year as well as current demand trends" and includes second quarter tariff refunds but excludes "any potential additional tariff refunds in the second half of the year" (8-K filing, 2026-08-19).
Capital Allocation and Store Footprint
The company returned $673 million to shareholders through dividends during the quarter (8-K filing, 2026-08-19). As of July 31, 2026, Lowe's operated 1,761 stores representing 196.0 million square feet of retail selling space (8-K filing, 2026-08-19).
MarginX data shows recent insider activity included stock awards to executives Lawrence Simkins (117.371 shares), Brian C. Rogers (117.371 shares), and Laurie Z. Douglas (70.423 shares).
This article was generated by MarginX from the 8-K filing on 2026-08-19. It is not investment advice.