Lowe's Companies, Inc.

Q2 sales were $26 billion, up 8.3% year over year, and comparable sales increased 0.2% (May -0.4%, June +1.7%, July -1.2%). GAAP diluted EPS was $4.27 and adjusted diluted EPS was $4.40, with both including a $0.11 benefit from IEEPA tariff refunds; the quarter also included $96 million of pre-tax non-GAAP charges tied to acquisition-related intangible amortization. Gross margin was 33%, down 80 bps year over year, while SG&A was 17.2% of sales, adjusted operating margin was 14%, inventory ended at $17.7 billion, free cash flow was $3.1 billion, capex was $542 million, and cash and equivalents were $3.2 billion. For full-year 2026, Lowe’s now expects sales of approximately $92 billion, roughly flat comparable sales, adjusted operating margin of approximately 11.6%, adjusted EPS of approximately $12.25, and capex of up to $2.5 billion; Q3 comp sales are expected to be in line with full-year outlook and adjusted EPS to be approximately 7% below prior-year adjusted EPS.

Marvin Ellison framed the quarter as evidence that Lowe’s Total Home strategy is working, pointing to strength in Pro, Online, and Home Services despite macro pressure and softer DIY discretionary spending. He stressed that the business remained disciplined on pricing, expenses, and productivity, and said the company is making long-term investments in FBM, ADG, digital, loyalty, and fulfillment to be better positioned when housing and DIY eventually improve. His tone was confident but cautious: optimistic on the strategy, but clear that the near-term environment remains dynamic and cautious.

Brandon Sink said Q2 performance was driven by operating discipline, productivity gains, and cost control, which helped offset softer sales and input-cost pressure. He highlighted the $4.40 adjusted EPS result, $3.1 billion of free cash flow, $542 million of capex, $673 million of dividends, $3.2 billion of cash, and 3.0x adjusted debt-to-EBITDA as the company moves toward its 2.75x target in mid-2027. He also noted gross margin pressure from FBM/ADG dilution, elevated fuel and transportation costs, and that the guidance update reflects first-half results, softer DIY demand, and continued residential construction weakness.

Analysts focused on July promo intensity, whether competitor tariff refunds created a new normal, and whether Lowe’s would match the pricing. Management said the pressure was transitory, centered on seasonal categories like grills, patio, and live goods, and that Lowe’s chose not to match unprofitable promotions; instead it leaned on loyalty offers, events, and disciplined pricing. Questions also covered FBM/ADG exposure to residential construction, with management saying ADG is fully exposed and FBM about 45% exposed, and that elevated rates are suppressing new builds and near-term demand.