8-K: Lowe's Q4 2025 Sales Rise, Pro & Online Drive Growth

Lowe's reported a 1.3% comparable sales increase in Q4 2025, driven by Pro, online, and home services, alongside a full-year 2026 outlook.

Summary

• Total sales for the fourth quarter ended January 30, 2026, were $20.6 billion, compared to $18.6 billion in the prior-year quarter.
• Comparable sales for the fourth quarter increased 1.3%, driven by continued growth in Pro, online, and home services sales, as well as strong holiday performance.
• Diluted earnings per share (EPS) for the fourth quarter were $1.78, compared to $1.99 in the fourth quarter of 2024.
• Adjusted diluted EPS for the fourth quarter increased 2.6% to $1.98, excluding $149 million in pre-tax expenses associated with the acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG).
• For the fiscal year ended January 30, 2026, total sales were $86.3 billion, compared to $83.7 billion in the prior fiscal year.
• Fiscal year diluted EPS was $11.85, compared to $12.23 in the prior fiscal year.
• Fiscal year adjusted diluted EPS was $12.28, compared to $11.99 in the prior fiscal year, a 2.4% increase.
• The company awarded $125 million in discretionary bonuses to frontline associates.
• Lowe's returned $673 million to shareholders through dividends in the fourth quarter and $2.6 billion for the full fiscal year.
• As of January 30, 2026, Lowe's operated 1,759 stores, representing approximately 196 million square feet of retail selling space.
• Positive comparable sales were achieved in 9 of 14 product categories and 12 of 15 regions in Q4 2025.
• The company closed on the acquisitions of Foundation Building Materials and Artisan Design Group and launched 'Mylow,' an AI-powered home improvement virtual advisor.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a solid performance given the challenging housing market, with strategic initiatives driving adjusted earnings growth and a clear outlook for the next fiscal year. The GAAP EPS decline is primarily due to acquisition-related expenses, which are non-recurring operational costs.

Positives

• Q4 2025 comparable sales increased by 1.3%, driven by strong performance in Pro, online, and home services.
• Adjusted diluted EPS for Q4 2025 increased 2.6% to $1.98, demonstrating operational strength excluding acquisition-related costs.
• Total sales for Q4 2025 grew to $20.6 billion from $18.6 billion in the prior-year quarter.
• The company awarded $125 million in discretionary bonuses to frontline associates, recognizing their contributions.
• Shareholders received $673 million in dividends during Q4 2025, contributing to a total of $2.6 billion returned for the fiscal year.
• The 'Total Home strategy' is resonating with both Pro and DIY customers, leading to positive comparable sales in 9 of 14 product categories and 12 of 15 regions.
• Successful relaunch of MyLowes Pro Rewards and the commencement of a multi-year buildout of the Pro Extended Aisle.
• Completed the acquisitions of Foundation Building Materials and Artisan Design Group, expanding market reach.
• Launched 'Mylow,' an AI-powered home improvement virtual advisor, enhancing customer and associate experience.

Negatives

• GAAP diluted EPS for Q4 2025 decreased to $1.78 from $1.99 in Q4 2024.
• GAAP diluted EPS for fiscal year 2025 decreased to $11.85 from $12.23 in fiscal year 2024.
• The company recognized $149 million in pre-tax expenses in Q4 2025 associated with the FBM and ADG acquisitions, impacting GAAP earnings.
• Operating income as a percentage of sales decreased to 8.30% in Q4 2025 from 9.87% in Q4 2024.
• Operating income as a percentage of sales decreased to 11.77% in FY 2025 from 12.51% in FY 2024.
• Gross margin decreased to 32.46% in Q4 2025 from 32.86% in Q4 2024.
• The housing macro environment remains pressured, posing ongoing challenges.

Risks

• Changes in general economic conditions, including volatility and/or lack of liquidity in U.S. and world financial markets, leading to reduced availability and/or higher cost of borrowing.
• Slower rates of growth in real disposable personal income that could affect the rate of growth in consumer spending.
• Inflation and its impacts on discretionary spending and on company costs.
• Shortages and other disruptions in the labor supply.
• Interest rate and currency fluctuations.
• Home price appreciation or decreasing housing turnover, and the age of housing stock.
• The availability of consumer credit and of mortgage financing.
• Trade policy changes or additional tariffs.
• Outbreaks of pandemics.
• Fluctuations in fuel and energy costs, and inflation or deflation of commodity prices.
• Natural disasters, geopolitical or armed conflicts, and acts of both domestic and international terrorism.
• Other factors that can negatively affect customers.

Future Outlook

For fiscal year 2026, Lowe's projects total sales between $92.0 billion and $94.0 billion, representing an increase of approximately 7% to 9% compared to the prior year. Comparable sales are expected to be flat to up 2% as compared to the prior year. The company anticipates an operating income as a percentage of sales (operating margin) of 11.2% to 11.4% (adjusted operating margin of 11.6% to 11.8%). Diluted earnings per share are projected to be approximately $11.75 to $12.25 (adjusted diluted earnings per share of approximately $12.25 to $12.75). Capital expenditures are estimated at approximately $2.5 billion, with net interest expense of approximately $1.6 billion and an effective income tax rate of approximately 24.5%.

Management Comments

• "We delivered strong results this quarter, as our Total Home strategy is resonating with both our Pro and DIY customers, which was evident during a great holiday season."
• "Given our outperformance this quarter, we awarded $125 million in discretionary bonuses to our frontline associates in recognition of their hard work and outstanding customer service."
• "While the housing macro remains pressured, we are focused on directing what is within our control, which includes our ongoing productivity initiatives."
• "We remain confident that we are well-positioned to take share regardless of the macro environment."

Industry Context

StockSavvy.ai notes that Lowe's performance, particularly the growth in Pro, online, and home services sales, demonstrates resilience despite a 'pressured housing macro.' The company's 'Total Home strategy' and focus on productivity initiatives are key differentiators in a competitive home improvement market, aiming to capture market share irrespective of broader economic headwinds. The launch of an AI-powered virtual advisor also indicates an investment in technological innovation to enhance customer experience, a trend seen across various retail sectors.

Stakeholder Impact

• Shareholders: The company returned $673 million in dividends in Q4 and $2.6 billion for the fiscal year, demonstrating a commitment to shareholder value.
• Employees: Frontline associates received $125 million in discretionary bonuses, recognizing their hard work and outstanding customer service.
• Customers (Pro & DIY): Benefit from the 'Total Home strategy,' growth in online and home services, and new initiatives like MyLowes Pro Rewards and the AI-powered virtual advisor 'Mylow.'

Next Steps

• A conference call to discuss fourth quarter 2025 operating results is scheduled for February 25, 2026, at 9 a.m. ET.
• Continued focus on directing what is within control, including ongoing productivity initiatives.
• Continued execution of the 'Total Home strategy' to resonate with Pro and DIY customers.
• Multi-year buildout of the Pro Extended Aisle to enhance offerings for professional customers.

Key Dates

Recommendation

While Lowe's demonstrated resilience with positive comparable sales and adjusted EPS growth in a challenging housing market, the decline in GAAP EPS and operating margin, coupled with ongoing macroeconomic pressures, suggests a 'hold' recommendation. The strategic initiatives and shareholder returns are positive, but the overall environment warrants a cautious stance until clearer signs of sustained improvement in the housing sector emerge.

Keywords

Home Improvement, Retail, Lowe's, Earnings, Financial Results, Q4 2025, Fiscal 2025, Comparable Sales, EPS, Pro Customer, Online Sales, Dividends, Acquisitions, Outlook 2026, Housing Market