8-K: Lowe's Reports Q2 2026 Results, Updates Outlook

Lowe's Companies, Inc. announced second quarter 2026 financial results, reporting total sales of $26.0 billion and diluted EPS of $4.27, while updating its full-year outlook.

Summary

• Lowe's reported net earnings of $2.4 billion and diluted EPS of $4.27 for the second quarter ended July 31, 2026.
• Excluding $96 million in pre-tax expenses related to acquisitions of Foundation Building Materials (FBM) and Artisan Design Group (ADG), adjusted diluted EPS increased 1.6% to $4.40.
• Total sales for the quarter were $26.0 billion, a 8.3% increase from $24.0 billion in the prior-year quarter.
• Comparable sales increased by 0.2%, driven by Pro and home services, and a 15.7% rise in online sales, despite DIY pressures.
• The company operated 1,761 stores as of July 31, 2026.
• Lowe's updated its full-year 2026 outlook, now projecting total sales of $92.0 billion and comparable sales to be flat.
• Full-year diluted EPS is expected to be approximately $11.75, with adjusted diluted EPS around $12.25.
• Capital expenditures are projected to be up to $2.5 billion for the fiscal year.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive report, with modest sales growth and EPS largely meeting expectations, though offset by acquisition-related expenses and ongoing DIY market pressures.

Positives

• Comparable sales increased by 0.2%, marking the fifth consecutive quarter of positive comp sales.
• Strong performance in Pro and home services sales contributed to the comparable sales growth.
• Online sales saw a significant increase of 15.7%.
• Adjusted diluted EPS increased by 1.6% to $4.40, excluding acquisition-related expenses.
• The company returned $673 million to shareholders through dividends during the quarter.
• Positive comp sales were reported in 9 out of 13 product categories.
• 8 out of 15 regions delivered positive comp sales growth.

Negatives

• Persistent pressure in discretionary DIY spending impacted overall comparable sales.
• The company incurred $96 million in pre-tax expenses related to the acquisitions of FBM and ADG.
• Full-year comparable sales outlook was revised to flat, down from a previous expectation of flat to up 2%.
• Full-year diluted EPS guidance was narrowed to approximately $11.75, with the previous range being $11.75 to $12.25.
• Adjusted operating margin decreased by 62 basis points year-over-year to 14.04%.

Risks

• General economic conditions, including volatility in financial markets and reduced availability/higher cost of borrowing.
• Slower growth in real disposable personal income affecting consumer spending.
• Inflation impacting discretionary spending and company costs.
• Labor supply shortages and disruptions.
• Interest rate and currency fluctuations.
• Home price appreciation or decreasing housing turnover.
• Availability of consumer credit and mortgage financing.
• Trade policy changes and additional tariffs.

Future Outlook

For fiscal year 2026, total sales are projected to be $92.0 billion, with comparable sales expected to be flat compared to the prior year. Operating income margin is anticipated to be 11.2%, and adjusted operating income margin is expected to be 11.6%. Diluted EPS is projected at approximately $11.75, with adjusted diluted EPS around $12.25. Capital expenditures are planned up to $2.5 billion.

Management Comments

• "Sustained growth in Pro, Online and Home Services led to our fifth consecutive quarter of positive comp sales, despite pressure in discretionary DIY spending."
• "While the near-term remains dynamic, our teams are executing at a high level, advancing our Total Home strategy and investing to drive growth and profitability."
• "I would like to thank all of our frontline associates for their hard work and dedication to our customers."

Industry Context

StockSavvy.ai notes that Lowe's performance reflects broader trends in the home improvement sector, with a continued shift towards professional services and online channels, while facing headwinds in do-it-yourself (DIY) discretionary spending due to macroeconomic pressures.

Stakeholder Impact

• Shareholders: The company paid $673 million in dividends, demonstrating a commitment to returning capital. The updated outlook and EPS guidance will influence investor sentiment.
• Employees: Management thanked frontline associates for their hard work, indicating their importance to operations.
• Customers: The company continues to focus on serving both Pro and DIY customers, with specific strategies for each segment.
• Suppliers: Increased sales and inventory levels (merchandise inventory increased to $17.7 billion from $16.3 billion) suggest ongoing relationships and demand.

Next Steps

• Continue executing the Total Home strategy.
• Invest to drive growth and profitability.
• Focus on Pro penetration, accelerating online sales, expanding home services, creating a loyalty ecosystem, and increasing space productivity.
• Hold a conference call to discuss second quarter 2026 operating results.

Key Dates

Recommendation

The filing indicates a mixed performance with modest comparable sales growth and adjusted EPS increase, but also highlights ongoing DIY pressures and a revised, more conservative full-year outlook for comparable sales. While Pro and online segments show strength, the overall environment suggests a cautious approach, making 'hold' appropriate until clearer signs of sustained growth or improvement in DIY spending emerge.

Keywords

home improvement, retail sales, earnings, comparable sales, diluted EPS, Pro sales, online sales, acquisitions