Key Highlights
- The home improvement chain delivered Q1 adjusted EPS of $3.03, surpassing analyst expectations of $2.97, while revenue reached $23.08B versus forecasts
- Comp sales increased 0.6%, driven by robust 15.5% digital sales expansion and gains in appliances, professional customers, and home services
- Annual adjusted EPS outlook of $12.25–$12.75 centers at $12.50, trailing Street consensus of $12.59
- LOW shares declined approximately 2.9% following the report, with investor attention fixed on weaker-than-expected guidance
- Chief Executive Marvin Ellison cited a “challenging housing macro” environment while maintaining commitment to the Total Home approach
The home improvement retailer delivered first-quarter results that exceeded analyst projections across key metrics. Yet shares tumbled anyway — the culprit was forward-looking guidance that left investors wanting more.
LOW shares retreated roughly 2.9% following the announcement, trading around $213 in after-hours activity.
The retailer disclosed adjusted diluted earnings per share of $3.03 for the period ending May 1, topping Wall Street’s $2.97 projection. Total revenue registered $23.08 billion, marking a 10.4% year-over-year increase and exceeding the Street’s $22.97 billion estimate.
Comparable store sales advanced 0.6% during the period. Digital channels paced growth with a 15.5% surge. Categories including appliances, home services, and professional contractor sales also demonstrated strength.
Net earnings totaled $1.63 billion, translating to $2.90 per diluted share under GAAP accounting standards — virtually unchanged from the prior year’s $1.64 billion, or $2.92 per share, reported in Q1 2025.
The quarterly results incorporated $96 million in pre-tax costs associated with the Foundation Building Materials and Artisan Design Group acquisitions.
Chief Executive Marvin Ellison characterized the period as “a solid start to the year” and the retailer’s “fourth consecutive quarter of positive comp sales.”
He acknowledged current headwinds directly: “In spite of a challenging housing macro, we remain focused on advancing our Total Home strategy.”
Forward Outlook Missed the Mark
Investor sentiment soured on the company’s outlook. The retailer projected full-year adjusted EPS ranging from $12.25 to $12.75 — implying a midpoint of $12.50, which falls short of Wall Street’s $12.59 consensus target.
Annual revenue guidance spanning $92 billion to $94 billion also trailed slightly behind the Street’s $93.07 billion projection.
Management anticipates comparable sales performance ranging from flat to up 2% for the fiscal year — a conservative posture reflecting persistent consumer headwinds and elevated fuel prices.
Competitor Home Depot Maintained Its Annual Targets This Week
Notably, Home Depot disclosed results earlier in the week, similarly exceeding forecasts. The rival maintained its annual guidance and characterized its primary customer base as resilient. The company noted it has pursued tariff refund applications that could mitigate rising transportation expenses.
Earlier this year in February, Lowe’s eliminated approximately 600 corporate and support positions, stating the move would enable greater investment in store-level workforce.
Ellison’s “Total Home strategy” — designed to capture both do-it-yourself shoppers and trade professionals — has served as the organization’s primary growth catalyst.
The professional contractor and digital segments remain standout performers, both demonstrating positive trajectory in Q1.
Management reiterated its annual sales target of $92 billion to $94 billion, representing 7% to 9% expansion compared to the previous year.
On an adjusted basis, full-year earnings per share are projected within the $12.25 to $12.75 range.
The Q1 performance marked the fourth consecutive quarter of positive comparable sales for the retailer — a trend management aims to sustain throughout the critical spring selling period and into subsequent quarters.
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