10-Q · May 28, 2026
Lowe's Q1 2026 results exceeded expectations with net sales of $23.1 billion, a 10.3% increase over Q1 2025. The diluted EPS was reported at $2.90, slightly lower than the $2.92 for the same quarter last year, impacted…
Earnings analysis · 10-Q
LOW earnings analysis
Filed August 27, 2026 · Our reading of the company's report
The latest report
Lowe’s delivered 8.3% second-quarter sales growth to $25,956 million, supported by Pro, Online, Home Services and acquired businesses, but comparable sales were only up 0.2% as transactions declined 2.1%. Gross margin…
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Lowe’s delivered 8.3% second-quarter sales growth to $25,956 million, supported by Pro, Online, Home Services and acquired businesses, but comparable sales were only up 0.2% as transactions declined 2.1%. Gross margin fell 77 basis points to 33.04% and operating margin fell 81 basis points to 13.67%, leaving GAAP diluted EPS flat at $4.27 despite adjusted EPS rising to $4.40. Cash generation remained strong at $7,009 million of operating cash flow and approximately $5,946 million of free cash flow, although working capital and higher interest expense remain concerns. The 10-Q introduced no new formal risk-factor changes or new sales/EPS guidance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $4.27
What stood out
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Sales grew despite weak DIY demand
Second-quarter net sales increased 8.3% year over year to $25,956 million, while comparable sales increased 0.2%. Pro, Online and Home Services growth helped offset persistent DIY pressure.
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Acquired businesses broadened sales base
Retail Home Improvement sales increased to $24,015 million from $23,821 million, while the Other segment increased to $1,941 million from $138 million following the FBM and ADG acquisitions.
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Strong cash generation funded deleveraging
Six-month operating cash flow was $7,009 million and capital expenditures were $1,063 million, implying approximately $5,946 million of free cash flow and capex intensity of 2.2% of sales.
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Debt repayment and liquidity remained solid
The company repaid $2,397 million of debt during the first six months, compared with $796 million in the prior-year period. Cash and cash equivalents were $3,172 million at July 31, 2026, with $5,000 million of undrawn revolver capacity.
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Adjusted EPS improved modestly
Adjusted diluted EPS increased to $4.40 from $4.33 year over year, excluding $96 million of acquisition-related intangible-amortization expense in the quarter.
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Tariff refunds supported profitability
The company recognized approximately $80 million of pre-tax IEEPA tariff refunds in the quarter, providing partial support to gross margin.
What to watch
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Margin pressure from acquisitions and fuel
Gross margin declined 77 basis points to 33.04% from 33.81%, driven by the operational cost structure of the 2025 acquisitions and higher fuel costs; tariff refunds and credit revenue only partially offset the pressure.
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DIY demand and traffic remained weak
Comparable customer transactions fell 2.1% to 219 million, while comparable average ticket rose 2.3% to $107.90. Management cited persistent discretionary DIY pressure, challenging weather and economic uncertainty.
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Higher debt burden raises interest costs
Net interest expense increased to $374 million from $313 million in the quarter, and total current plus long-term debt was $37,556 million at July 31, 2026 versus $34,723 million a year earlier.
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Working capital consumed cash
Six-month operating cash flow fell to $7,009 million from $7,610 million, while inventory increased to $17,737 million from $16,342 million. Management attributed the cash-flow decline primarily to working-capital timing.
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No new formal risk-factor changes
The filing states there were no material changes to risk factors from the March 23, 2026 Annual Report. Separately, the final consent decree related to lead-safe installation practices requires a $12.5 million civil penalty.
Management's outlook
The 10-Q does not provide new sales or EPS guidance. It states fiscal 2026 capital-expenditure guidance of approximately $2.5 billion and says liquidity is expected to remain adequate for the next twelve months. Prior numeric fiscal 2026 guidance was disclosed in the August 19, 2026 earnings release rather than this filing.
Earlier filings 4
10-K · March 23, 2026
Lowe's Companies, Inc. continues to strengthen its market position through strategic acquisitions and a focus on its Total Home strategy, which emphasizes servicing professional customers and enhancing omnichannel…
10-Q · November 26, 2025
Lowe's reported Q3 2025 earnings with revenue slightly below expectations while EPS exceeded estimates. The company experienced a revenue decline compared to both the previous quarter and the prior year, attributed to a…
10-Q · August 28, 2025
Lowe's Q2 2025 results showed stable growth, with revenues totaling $23.96 billion, a 1.6% increase from Q2 2024. Diluted EPS rose to $4.27, outperforming both the prior quarter and analyst expectations. Despite lower…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.