Lowe’s (LOW) Q1 2026 earnings summary

Executive summary

• Q1 2025 sales were $20.9 billion, down 2.0% year-over-year, with comparable sales declining 1.7% amid housing market and weather challenges; Pro and online sales delivered mid-single-digit growth.

• Net earnings were $1.6 billion, with diluted EPS of $2.92, down from $3.06 last year, but in line with expectations.

• Customer satisfaction ranked #1 by J.D. Power among home improvement retailers; the company also won a Webby Award for its mobile app.

• Announced $1.325 billion acquisition of Artisan Design Group (ADG), expected to close in Q2 2025, expanding Pro market reach.

• Continued investment in technology, including AI-powered Mylow advisor, Pro loyalty program relaunch, and online marketplace enhancements.

Financial highlights

• Gross margin improved by 19 basis points to 33.38% year-over-year, aided by productivity initiatives.

• Operating margin declined 50 basis points to 11.9% due to lower sales and higher SG&A costs.

• Net earnings margin was 7.84%, compared to 8.21% in the prior year.

• Free cash flow was $2.9 billion; net cash provided by operating activities was $3.4 billion.

• Paid $645 million in dividends and repaid $750 million in debt during the quarter.

Outlook and guidance

• Fiscal 2025 sales expected between $83.5–$84.5 billion, with comparable sales flat to up 1%.

• Operating margin forecasted at 12.3%–12.4%; full-year diluted EPS projected at $12.15–$12.40.

• Capital expenditures planned at approximately $2.5 billion, with new store builds ramping up.

• Q2 comp sales expected to be about 150 basis points above the bottom end of the full-year guide.

• Focus remains on driving Pro penetration, accelerating online sales, and expanding home services.