Lowe's Companies, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported net earnings of $2.4 billion and diluted EPS of $4.27 for the quarter ended July 31, 2026, matching diluted EPS of $4.27 in the prior-year quarter.
• Adjusted diluted EPS increased 1.6% to $4.40, excluding $96 million in pre-tax expenses related to the acquisitions of Foundation Building Materials and Artisan Design Group.
• Both GAAP and adjusted EPS included an $0.11 benefit from IEEPA tariff refunds.
• Total sales reached $26.0 billion, up from $24.0 billion in the prior-year quarter.
• Comparable sales increased 0.2% year-over-year.
• Online sales grew 15.7% year-over-year.
• Gross margin was 33.04% for the quarter, down from 33.81% in the prior-year quarter.
• Operating income was $3.549 billion (13.67% of sales) compared to $3.469 billion (14.48% of sales) in the prior year.
• Net interest expense for the quarter was $374 million.
• Cash dividends paid during the quarter totaled $673 million.
• As of July 31, 2026, total assets were $55.881 billion, with total liabilities at $63.318 billion and shareholders' deficit at $(7.437) billion.
• Long-term debt, excluding current maturities, stood at $35.204 billion.
• Merchandise inventory net increased to $17.737 billion from $16.342 billion in the prior year.
• For the six months ended July 31, 2026, net cash provided by operating activities was $7.009 billion.
• Capital expenditures for the six months ended July 31, 2026, were $1.063 billion.
• Repurchases of common stock for the six months ended July 31, 2026, totaled $366 million.

Guidance and Future Outlook

• Updated fiscal year 2026 outlook to reflect first-half operational results and current demand trends.
• Revised total sales guidance to $92.0 billion (previously $92.0 to $94.0 billion).
• Revised comparable sales guidance to flat (previously flat to up 2%).
• Revised operating margin guidance to 11.2% (previously 11.2% to 11.4%).
• Revised adjusted operating margin guidance to 11.6% (previously 11.6% to 11.8%).
• Revised diluted EPS guidance to approximately $11.75 (previously $11.75 to $12.25).
• Revised adjusted diluted EPS guidance to approximately $12.25 (previously $12.25 to $12.75).
• Net interest expense guidance is approximately $1.6 billion.
• Effective income tax rate guidance is approximately 24.5%.
• Capital expenditures guidance is up to $2.5 billion.
• Fiscal year 2026 outlook includes tariff refunds recognized in the second quarter but excludes potential additional refunds in the second half.
• Full-year adjusted guidance excludes an expected 40 basis points and $0.50 after-tax impact from intangible asset amortization related to acquisitions.

Business Segments and Product Lines

• Comparable sales growth was driven by strong performance in Pro and Home Services sales.
• The company operates 1,761 stores with 196.0 million square feet of retail selling space as of July 31, 2026.
• The company employs approximately 300,000 associates and operates over 1,750 home improvement stores, 540 branches, and 120 distribution centers.
• The company recognized $96 million in pre-tax expenses associated with the acquisitions of Foundation Building Materials and Artisan Design Group.

Market and Competitive Landscape

• Persistent DIY macro pressures partially offset growth in Pro and online sales.
• The company noted sustained growth in Pro, Online, and Home Services for its fifth consecutive quarter of positive comp sales.
• The company is advancing its "Total Home" strategy.

Risks and Challenges

• Forward-looking statements highlight risks including changes in general economic conditions, volatility in financial markets, and reduced availability or higher cost of borrowing.
• Risks include slower growth in real disposable personal income, inflation impacts on discretionary spending, labor supply shortages, and interest rate fluctuations.
• Potential risks include home price appreciation or decreasing housing turnover, age of housing stock, and availability of consumer credit.
• Risks also encompass trade policy changes, additional tariffs, pandemics, fuel and energy cost fluctuations, commodity price volatility, natural disasters, and geopolitical conflicts.

Management Commentary and Tone

• Marvin R. Ellison, Chairman, President, and CEO, stated that sustained growth in Pro, Online, and Home Services led to five consecutive quarters of positive comp sales despite pressure in discretionary DIY spending.
• Management described the near-term as dynamic but affirmed that teams are executing at a high level.
• The CEO thanked frontline associates for their hard work and dedication.

Other Key Points

• The company is a FORTUNE 100 home improvement company with fiscal year 2025 sales of more than $86 billion.
• Lowe's is a core value S&P 500 equity stock and a dividend aristocrat.
• The company operates programs focused on creating safe, affordable housing, improving community spaces, developing skilled trade experts, and providing disaster relief.
• A conference call to discuss results was scheduled for August 19, 2026, at 9 a.m. ET.
• The company recognized $43 million in pre-tax expenses in the second quarter of 2025 related to the acquisition of Artisan Design Group.