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 Q2 EPS of $4.33 beat estimates, up 5.6% y/y, with comps rising 1.1%.
The ADG acquisition bolsters Pro spending reach, while Lowe's also announced the FBM deal.
FY25 sales view raised to $84.5B-$85.5B, with EPS forecast at $12.10-$12.35 for the year.
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same. The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter. Management also updated its full-year outlook following the completion of the Artisan Design Group (ADG) acquisition.
The home improvement retailer posted adjusted earnings of $4.33 per share, which beat the Zacks Consensus Estimate of $4.23. The figure marked a 5.6% increase from earnings of $4.10 per share reported in the same period last year. Including costs related to the acquisition of ADG, quarterly earnings came in at $4.27 per share, up from $4.17 in the prior-year period.
Net sales of $23,959 million marginally missed the consensus estimate of $23,961 million but rose from $23,586 million in the year-ago period. The growth was driven by a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. We had anticipated a 1.5% increase in comparable sales.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe’s reported an adjusted gross margin of 33.8%, an increase of 37 basis points from the same quarter last year. We had expected gross margin to remain flat year over year.
Adjusted selling, general and administrative expenses totaled $4,149 billion, up from $4,068 million from the year-ago period. As a percentage of net sales, the metric came in at 17.3%, almost flat year over year.
The adjusted operating income increased to $3,512 million from $3,404 million a year earlier. We observe that the operating margin expanded 23 basis points to 14.7%. We anticipated a 10-basis-point lift in the operating margin.
Lowe’s Pro Strategy: ADG Closed; FBM Deal Announced
The acquisition of ADG expands Lowe’s ability to capture a greater share of Pro planned spending and strengthens its reach in new home construction. Building on this, the company has entered into an agreement to acquire Foundation Building Materials (FBM) for roughly $8.8 billion.
With more than 370 locations in the United States and Canada, and about 40,000 Pro customers, FBM generated an estimated $6.5 billion in revenues and $635 million in adjusted EBITDA in 2024 on a pro forma basis. The deal, to be funded with debt, is expected to be accretive to adjusted earnings per share in the first full year post-close and significantly advance Lowe’s Total Home and Pro strategies.
LOW’s Financial Health Snapshot
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $4,860 million, long-term debt (excluding current maturities) of $30,548 million, and a shareholders’ deficit of $11,400 million.
For the first half of fiscal 2025, operating cash flow totaled $7,610 million, while free cash flow stood at $6,597 million after accounting for capital expenditures of $1,013 million. The company returned value to its shareholders by paying $645 million in dividends during the quarter, in addition to investing $1.3 billion toward the ADG acquisition.
As of Aug. 1, 2025, Lowe's operated 1,753 stores, encompassing a total of 195.5 million square feet of retail selling space.
A Sneak Peek Into LOW’s FY25 Outlook
Management raised its full-year sales guidance to reflect ADG’s contribution. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5 billion to $84.5 billion. Comparable sales are expected to be flat to up 1%. The operating margin forecast is 12.1%-12.2% (previously between 12.3% and 12.4%), with the adjusted operating margin guided to 12.2%-12.3%.
Lowe’s foresees earnings per share to be in the band of $12.10 to $12.35 (previously $12.15 to $12.40) with adjusted earnings projected in the range of $12.20 to $12.45 per share. Capital expenditures remain guided at approximately $2.5 billion.
Lowe’s Stock Price Performance
Shares of Lowe’s have advanced 17.2% in the past month compared with the industry’s rise of 13%.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and earnings implies growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Grocery Outlet (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2 at present. GO has a trailing four-quarter earnings surprise of 28.2%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales suggests growth of around 8.2% from the year-ago reported numbers.
Ollie's Bargain Outlet Holdings (OLLI - Free Report) is a value retailer of brand-name merchandise at drastically reduced prices and currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 2%, on average.
The Zacks Consensus Estimate for Ollie's current fiscal-year sales and earnings implies growth of 14.2% and 14%, respectively, from the year-ago reported numbers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lowe's Q2 Earnings Beat, Comps Rise Y/Y, View Revised on ADG Inclusion
Key Takeaways
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same. The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter. Management also updated its full-year outlook following the completion of the Artisan Design Group (ADG) acquisition.
LOW’s Quarterly Performance: Key Metrics & Insights
The home improvement retailer posted adjusted earnings of $4.33 per share, which beat the Zacks Consensus Estimate of $4.23. The figure marked a 5.6% increase from earnings of $4.10 per share reported in the same period last year. Including costs related to the acquisition of ADG, quarterly earnings came in at $4.27 per share, up from $4.17 in the prior-year period.
Net sales of $23,959 million marginally missed the consensus estimate of $23,961 million but rose from $23,586 million in the year-ago period. The growth was driven by a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. We had anticipated a 1.5% increase in comparable sales.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote
LOW’s Margin & Cost Details
Lowe’s reported an adjusted gross margin of 33.8%, an increase of 37 basis points from the same quarter last year. We had expected gross margin to remain flat year over year.
Adjusted selling, general and administrative expenses totaled $4,149 billion, up from $4,068 million from the year-ago period. As a percentage of net sales, the metric came in at 17.3%, almost flat year over year.
The adjusted operating income increased to $3,512 million from $3,404 million a year earlier. We observe that the operating margin expanded 23 basis points to 14.7%. We anticipated a 10-basis-point lift in the operating margin.
Lowe’s Pro Strategy: ADG Closed; FBM Deal Announced
The acquisition of ADG expands Lowe’s ability to capture a greater share of Pro planned spending and strengthens its reach in new home construction. Building on this, the company has entered into an agreement to acquire Foundation Building Materials (FBM) for roughly $8.8 billion.
With more than 370 locations in the United States and Canada, and about 40,000 Pro customers, FBM generated an estimated $6.5 billion in revenues and $635 million in adjusted EBITDA in 2024 on a pro forma basis. The deal, to be funded with debt, is expected to be accretive to adjusted earnings per share in the first full year post-close and significantly advance Lowe’s Total Home and Pro strategies.
LOW’s Financial Health Snapshot
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $4,860 million, long-term debt (excluding current maturities) of $30,548 million, and a shareholders’ deficit of $11,400 million.
For the first half of fiscal 2025, operating cash flow totaled $7,610 million, while free cash flow stood at $6,597 million after accounting for capital expenditures of $1,013 million. The company returned value to its shareholders by paying $645 million in dividends during the quarter, in addition to investing $1.3 billion toward the ADG acquisition.
As of Aug. 1, 2025, Lowe's operated 1,753 stores, encompassing a total of 195.5 million square feet of retail selling space.
A Sneak Peek Into LOW’s FY25 Outlook
Management raised its full-year sales guidance to reflect ADG’s contribution. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5 billion to $84.5 billion. Comparable sales are expected to be flat to up 1%. The operating margin forecast is 12.1%-12.2% (previously between 12.3% and 12.4%), with the adjusted operating margin guided to 12.2%-12.3%.
Lowe’s foresees earnings per share to be in the band of $12.10 to $12.35 (previously $12.15 to $12.40) with adjusted earnings projected in the range of $12.20 to $12.45 per share. Capital expenditures remain guided at approximately $2.5 billion.
Lowe’s Stock Price Performance
Shares of Lowe’s have advanced 17.2% in the past month compared with the industry’s rise of 13%.
Don’t Miss These Solid Bets
The Kroger Co. (KR - Free Report) operates in the thin-margin grocery industry, and currently carries a Zacks Rank #2 (Buy). KR has a trailing four-quarter earnings surprise of 1.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and earnings implies growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Grocery Outlet (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2 at present. GO has a trailing four-quarter earnings surprise of 28.2%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales suggests growth of around 8.2% from the year-ago reported numbers.
Ollie's Bargain Outlet Holdings (OLLI - Free Report) is a value retailer of brand-name merchandise at drastically reduced prices and currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 2%, on average.
The Zacks Consensus Estimate for Ollie's current fiscal-year sales and earnings implies growth of 14.2% and 14%, respectively, from the year-ago reported numbers.