Lowe's Q1 beats by $0.06, warns on demand

Lowe’s used its first-quarter report to show the split inside the home-improvement market right now: operationally, the company put up a clean quarter; economically, management said the backdrop for do-it-yourself spending is still weak. On May 20, Lowe’s reported adjusted diluted earnings per share of $3.03, ahead of the $2.97 consensus tracked by MarketBeat, while comparable sales rose 0.6% and total sales reached $23.1 billion. Marvin Ellison, Lowe’s chairman and chief executive, paired those numbers with a more cautious description of demand. On the earnings call, Ellison said DIY demand “remains under pressure” in a housing environment shaped by elevated interest rates, higher costs and low housing turnover. ### If Lowe’s beat estimates, why was the tone still cautious? (corporate.lowes.com) Adjusted earnings were stronger than expected partly because Lowe’s got support from categories and customers that have been holding up better than the core DIY shopper. The company said first-quarter performance was driven by strong spring execution, 15.5% online sales growth, and continued strength in appliances, home services and Pro sales. (corporate.lowes.com) Ellison made clear that those gains did not mean the broader market had turned. He told analysts that Lowe’s was still operating in what the company called a “challenging housing macro,” and the call transcript shows management continuing to frame the consumer backdrop as constrained by financing costs and muted home turnover. (corporate.lowes.com) ### What does the $0.06 beat actually tell us? MarketBeat’s consensus comparison shows Lowe’s delivered a modest but real earnings surprise: $3.03 in adjusted EPS versus a $2.97 estimate. Revenue also came in at about $23.08 billion, above the roughly $22.98 billion expectation listed by MarketBeat. The company’s reported diluted EPS under generally accepted accounting principles was lower, at $2.90, because Lowe’s booked $96 million in pre-tax expenses tied to its Foundation Building Materials and Artisan Design Group acquisitions. (corporate.lowes.com) That is why the headline “beat” and the company’s reported EPS are not the same figure. (marketbeat.com) ### Which parts of Lowe’s business are still working? Comparable sales rose 0.6% in the quarter, and Lowe’s said it posted positive comp sales in 9 of 13 product categories and in 11 of 15 regions. The company also said it has now delivered four consecutive quarters of positive comparable sales. (corporate.lowes.com) Pro customers remain central to that story. Lowe’s said Pro, appliances, online and home services continued to provide momentum, which helps explain why the company can still produce positive comps even while management describes the DIY customer as pressured. ### Where is the pressure showing up most clearly? (corporate.lowes.com) The clearest pressure point is the homeowner who would normally fund smaller renovation or repair projects out of confidence, equity or a move. Ellison said the housing environment is being shaped by elevated interest rates and low turnover, a combination that tends to slow the project activity that feeds DIY demand. (corporate.lowes.com) Margins also showed strain. Lowe’s infographic for the quarter said gross margin fell 70 basis points from a year earlier and operating margin fell 85 basis points, while adjusted operating margin was down 43 basis points. ### Did Lowe’s change its outlook? Lowe’s did not cut its full-year 2026 outlook. The company affirmed its forecast for total sales of $92 billion to $94 billion, comparable sales from flat to up 2%, and adjusted diluted earnings per share of $12.25 to $12.75. (corporate.lowes.com) That leaves the next test straightforward. (sec.gov) Investors will be watching whether Lowe’s can keep getting growth from Pro, online, appliances and home services while the company works through a housing market Ellison said remains difficult. (corporate.lowes.com)