We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lowe's (LOW) Tops Earnings Estimates on Pro and DIY Strength
Lowe’s reported its second-quarter results on Wednesday morning before the opening bell, beating expectations on the bottom line. Adjusted earnings during the quarter of $4.33 per share topped the Zacks Consensus Estimate by 2.36% and jumped 5.4% from the second quarter of 2024. The company hasn’t missed the EPS mark since 2019.
The positive earnings surprise is helping to quell concerns around what has been a difficult operating environment for these home improvement chains. Lowe’s faces countless headwinds, perhaps most notably the elevated interest rate backdrop. The home improvement sector has witnessed a sharp slowdown over the last few years as high mortgage rates, rising home prices and refinancing costs stifled demand.
Despite the less-than-ideal setting, Lowe’s executed extremely well during the second quarter, and the market appears to be rewarding the performance. Shares of LOW, which remain a Zacks Rank #3 (Hold), were up approximately 1% in early trading Wednesday morning.
Image Source: StockCharts
The quarterly results underscore the home improvement retailer’s continued investments in service offerings and operational efficiency. Strategic growth initiatives within its Total Home strategy along with its AI-powered shopping assistant supported demand.
Acquisitions to Help Drive Pro Customer Segment
Warmer weather in the latter half of the second quarter translated into increased traffic, positively impacting sales and helping to reverse a decline in comp sales in the first quarter. Total revenues of $23.96 billion were mainly in line with estimates, improving from the $23.59 billion during the year-ago period. Comparable sales for the quarter increased 1.1%. CEO Marvin Ellison emphasized the solid performance was due to strength in both Pro and DIY customer segments.
The retailer is also leveraging advanced technology through partnerships with Apple, allowing customers to visualize kitchen designs using Apple Vision Pro, and NVIDIA to integrate AI into its operations. These initiatives include the expansion of Lowe's outlet stores and the rural strategy, which have shown promising results and are expected to contribute to future growth.
While second-quarter EPS was negatively impacted by the acquisition of Artisan Design Group – which closed in June – the move is already benefitting the company’s reach to larger professional customers in the design, distribution and installation space for new home construction and large-scale renovation projects.
The acquisition should help offset an environment that has been plagued by soft residential remodeling activity and focused on smaller, maintenance-driven projects. With an estimated 18 million new homes needed in the United States by 2033, this acquisition positions Lowe’s to capitalize on long-term Pro spending in a fragmented $50 billion addressable market.
Alongside the release of its quarterly results this morning, Lowe’s also announced an agreement to acquire Foundation Building Materials (FBM), a leading North American distributor of interior building products. FBM is expected to enhance Lowe’s offering to Pro customers through expanded capabilities, faster fulfillment, and improved digital tools. Under the terms of the agreement, Lowe’s will acquire FBM for $8.8 billion in cash and is expected to close in the fourth quarter of 2025.
Despite these tailwinds, we expect the housing downturn to delay a sustained recovery for these home improvement giants as interest rate cuts are drawn out by a concerned Federal Reserve. As we’ve seen in recent weeks, inflation continues to rear its ugly head and will likely prolong the rate-cut process. The true impact of tariffs is also yet to be felt; Lowe’s is vulnerable to cost increases as the company relies more heavily on imports from China, Canada, and Mexico.
Bottom Line
Similar to Home Depot’s case, several risks remain evident for Lowe’s (LOW - Free Report) . Shares of the Mooresville, North Carolina-based retailer face mounting pressure from rising SG&A costs and high debt levels, testing its margin resilience and financial flexibility amid macroeconomic headwinds. Former weakness in large-scale discretionary projects may linger, further underscoring the pressure on this core segment that represents a significant portion of the company’s revenues.
Despite recent gains, LOW stock is showing just a 7% year-to-date advance and is underperforming the major U.S. indexes thus far in 2025.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lowe's (LOW) Tops Earnings Estimates on Pro and DIY Strength
Lowe’s reported its second-quarter results on Wednesday morning before the opening bell, beating expectations on the bottom line. Adjusted earnings during the quarter of $4.33 per share topped the Zacks Consensus Estimate by 2.36% and jumped 5.4% from the second quarter of 2024. The company hasn’t missed the EPS mark since 2019.
The positive earnings surprise is helping to quell concerns around what has been a difficult operating environment for these home improvement chains. Lowe’s faces countless headwinds, perhaps most notably the elevated interest rate backdrop. The home improvement sector has witnessed a sharp slowdown over the last few years as high mortgage rates, rising home prices and refinancing costs stifled demand.
Despite the less-than-ideal setting, Lowe’s executed extremely well during the second quarter, and the market appears to be rewarding the performance. Shares of LOW, which remain a Zacks Rank #3 (Hold), were up approximately 1% in early trading Wednesday morning.
Image Source: StockCharts
The quarterly results underscore the home improvement retailer’s continued investments in service offerings and operational efficiency. Strategic growth initiatives within its Total Home strategy along with its AI-powered shopping assistant supported demand.
Acquisitions to Help Drive Pro Customer Segment
Warmer weather in the latter half of the second quarter translated into increased traffic, positively impacting sales and helping to reverse a decline in comp sales in the first quarter. Total revenues of $23.96 billion were mainly in line with estimates, improving from the $23.59 billion during the year-ago period. Comparable sales for the quarter increased 1.1%. CEO Marvin Ellison emphasized the solid performance was due to strength in both Pro and DIY customer segments.
The retailer is also leveraging advanced technology through partnerships with Apple, allowing customers to visualize kitchen designs using Apple Vision Pro, and NVIDIA to integrate AI into its operations. These initiatives include the expansion of Lowe's outlet stores and the rural strategy, which have shown promising results and are expected to contribute to future growth.
While second-quarter EPS was negatively impacted by the acquisition of Artisan Design Group – which closed in June – the move is already benefitting the company’s reach to larger professional customers in the design, distribution and installation space for new home construction and large-scale renovation projects.
The acquisition should help offset an environment that has been plagued by soft residential remodeling activity and focused on smaller, maintenance-driven projects. With an estimated 18 million new homes needed in the United States by 2033, this acquisition positions Lowe’s to capitalize on long-term Pro spending in a fragmented $50 billion addressable market.
Alongside the release of its quarterly results this morning, Lowe’s also announced an agreement to acquire Foundation Building Materials (FBM), a leading North American distributor of interior building products. FBM is expected to enhance Lowe’s offering to Pro customers through expanded capabilities, faster fulfillment, and improved digital tools. Under the terms of the agreement, Lowe’s will acquire FBM for $8.8 billion in cash and is expected to close in the fourth quarter of 2025.
Despite these tailwinds, we expect the housing downturn to delay a sustained recovery for these home improvement giants as interest rate cuts are drawn out by a concerned Federal Reserve. As we’ve seen in recent weeks, inflation continues to rear its ugly head and will likely prolong the rate-cut process. The true impact of tariffs is also yet to be felt; Lowe’s is vulnerable to cost increases as the company relies more heavily on imports from China, Canada, and Mexico.
Bottom Line
Similar to Home Depot’s case, several risks remain evident for Lowe’s (LOW - Free Report) . Shares of the Mooresville, North Carolina-based retailer face mounting pressure from rising SG&A costs and high debt levels, testing its margin resilience and financial flexibility amid macroeconomic headwinds. Former weakness in large-scale discretionary projects may linger, further underscoring the pressure on this core segment that represents a significant portion of the company’s revenues.
Despite recent gains, LOW stock is showing just a 7% year-to-date advance and is underperforming the major U.S. indexes thus far in 2025.