Lowe’s (LOW) Q1 2027 earnings summary

Executive summary

• Q1 2026 sales reached $23.1 billion, up 10.3% year-over-year, with comparable sales up 0.6% and adjusted diluted EPS of $3.03, a 3.8% increase versus prior year.

• Net earnings were $1.6 billion, nearly flat compared to Q1 2025, with diluted EPS at $2.90; growth was driven by Pro, appliances, online, and home services, despite weather-related headwinds.

• Strong execution in Pro, online, and home services, supported by the Total Home strategy, loyalty programs, and AI-powered tools, led to continued market share gains.

• Integration of FBM and ADG acquisitions is on track, with focus on cost synergies, cross-selling, and $96 million in pre-tax acquisition-related expenses recognized in Q1.

• $250 million commitment to skilled trades training announced, aiming to support 250,000 individuals.

Financial highlights

• GAAP diluted EPS was $2.90; adjusted diluted EPS was $3.03, up from $2.92 last year, with net earnings margin at 7.05%.

• Gross margin was 32.68%, down 70 bps, mainly due to the dilutive impact of FBM and ADG acquisitions.

• SG&A was 19.2% of sales, leveraging 17 bps; adjusted operating margin was 11.5%, down 43 bps.

• Free cash flow was $2.8 billion; cash and cash equivalents at quarter-end were $786 million.

• Cash flows from operations were $3.4 billion, supporting $674 million in dividends and $365 million in share repurchases.

Outlook and guidance

• Fiscal 2026 sales expected in the range of $92–$94 billion, with comparable sales flat to up 2%.

• Adjusted operating margin expected at 11.6%–11.8%; full-year adjusted diluted EPS of $12.25–$12.75.

• Capital expenditures up to $2.5 billion; Q2 comp sales expected near the midpoint of full-year guidance.

• Q2 adjusted EPS expected to be about 2% below prior year due to acquisition impacts and higher transportation costs.

• Management remains focused on disciplined execution, productivity, and strategic investments for long-term growth.