01—Abstract
Summary
Summary of the 10-Q filed May 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Lowe's Companies, Inc. reported a 2.0% decrease in net sales for the first quarter of fiscal year 2025, totaling $20.9 billiona, down from $21.4 billion in the prior year period.
This decline was attributed to a 1.7% decrease in comparable sales, driven by a 3.8% drop in customer transactions, although partially offset by a 2.1% increase in average ticket price. Net earnings fell to $1.6 billionb from $1.8 billion, with diluted earnings per share decreasing to $2.92 from $3.06 year-over-year. The company cited ongoing challenges in the housing market, pressure on DIY discretionary spending, and unfavorable early spring weather as factors impacting performance.
Despite these headwinds, Lowe's saw continued growth in its Pro and online sales, reflecting the progress of its "Total Home" strategy. Investments in technology, including the relaunch of the My Lowe's Pro Rewards program and the introduction of an AI-powered virtual advisor, "MyLowe's", are intended to enhance customer experience and drive future growth.
02—Key points
Key Highlights
- Net sales decreased by 2.0% to $20.9 billion compared to $21.4 billion in the prior year, with comparable sales down 1.7%.
- Net earnings decreased to $1.6 billion from $1.8 billion, resulting in diluted EPS of $2.92, down from $3.06.
- The company experienced a 3.8% decrease in comparable customer transactions, partially offset by a 2.1% increase in comparable average ticket.
- Gross margin as a percentage of sales improved by 19 basis points, driven by productivity initiatives and shrink/credit revenue improvements.
- Selling, General, and Administrative (SG&A) expenses deleveraged by 56 basis points as a percentage of sales, primarily due to lower sales volume and increased wage and healthcare costs.
- Lowe's is actively investing in its Pro customer segment with the relaunch of My Lowe's Pro Rewards and developing AI-driven customer tools like MyLowe's.
- Cash flow from operations decreased to $3.4 billion from $4.2 billion in the prior year, impacted by working capital changes and lower net earnings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Lowes Companies Inc kept $0.08.
- Revenue$20.93B100.0%
- Cost of revenue−$13.94B66.6%
- Gross profit$6.99B33.4%
- Operating costs−$4.49B21.5%
- Operating income$2.49B11.9%
- Interest, other & tax−$853.0M4.1%
- Net income$1.64B7.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed May 29, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $20.93B$21.36B | −2.0% |
| Cost of Revenue | $13.94B$14.27B | −2.3% |
| Gross Profit | $6.99B$7.09B | −1.5% |
| SG&A Expenses | $4.05B$4.01B | +0.9% |
| Operating Income | $2.49B$2.65B | −6.0% |
| Net Income | $1.64B$1.75B | −6.5% |
| EPS (Basic) | $2.93$3.06 | −4.2% |
| EPS (Diluted) | $2.92$3.06 | −4.6% |
| Shares Outstanding (Basic) | 559.00M571.00M | −2.1% |
| Shares Outstanding (Diluted) | 560.00M572.00M | −2.1% |
05—Questions
Frequently Asked Questions
What are the primary reasons for the decrease in net sales and earnings compared to the prior year?
The decrease in net sales and earnings is primarily attributed to broader market challenges including a softening housing market, reduced DIY big-ticket discretionary spending, and unfavorable weather conditions early in the quarter. These factors led to a decline in comparable customer transactions, which outweighed the increase in average ticket price.
How is Lowe's addressing the slowdown in customer transactions and discretionary spending?
Lowe's is focusing on its 'Total Home' strategy, emphasizing growth in its Pro customer segment and online sales. Initiatives include the relaunch of the My Lowe's Pro Rewards loyalty program to better serve professional customers and the introduction of AI-powered tools like 'MyLowe's' to enhance the customer experience and provide project support. Investments in technology are aimed at improving online engagement and driving overall sales.
What is the company's outlook on liquidity and capital allocation?
Lowe's maintains a strong liquidity position with $3.1 billion in cash and cash equivalents and $4.0 billion in undrawn capacity on its revolving credit facilities. The company continues to return cash to shareholders through dividends ($645 million paid) and share repurchases. For fiscal year 2025, capital expenditure guidance is approximately $2.5 billion, focused on strategic initiatives and store improvements.
Are there any significant planned acquisitions or divestitures mentioned in this report?
The report notes that Lowe's entered into a definitive agreement on April 9, 2025, to acquire Artisan Design Group (ADG) for $1.325 billion. This acquisition is expected to expand the company's Pro customer offering into new distribution channels and is anticipated to close in the second quarter of fiscal year 2025.
06—Continue