Lowe's Earnings - May 2026
Lowe's Companies, Inc.
Fourth straight positive comp, two acquisitions reshape Pro.
Online up 15.5%, Pro and Appliances both positive, FBM and ADG integration on track, and full-year fiscal 2026 guidance affirmed.
Lowe's Companies (NYSE: LOW) reported first-quarter fiscal 2026 results (quarter ended May 1, 2026) on May 20, 2026, posting net sales of $23.08 billion (up 10.3% YoY, driven by the Foundation Building Materials and Artisan Design Group acquisitions), comparable sales of +0.6%, and GAAP diluted EPS of $2.90 (essentially flat versus $2.92 in the prior-year quarter). Adjusted diluted EPS of $3.03, which excludes $96 million in pre-tax acquisition-related amortization, grew 3.8% YoY. Online sales accelerated 15.5%, Pro and Appliances both posted positive comps, and management affirmed the full-year fiscal 2026 outlook.
The fourth consecutive quarter of positive comp sales is an important inflection for a name that endured eight consecutive quarters of negative comps prior to mid-2025. The combination of organic comp recovery and inorganic Pro-channel expansion (FBM acquired late 2025, ADG integration ongoing) positions Lowe's to better compete with Home Depot in the higher-growth Pro segment, where Lowe's has historically been under-indexed.
Lowe's is executing a credible Pro-channel turnaround. The Total Home strategy, the FBM acquisition (which adds drywall, ceiling tile and steel framing distribution), and the ADG transaction (interior design services) are all sensible moves to expand the addressable Pro market and capture a larger share of the home improvement project lifecycle. The Q1 print delivered fourth consecutive positive comps, double-digit online growth, and affirmed guidance. With a Buy consensus, a 12-month average price target near $285 (about 30% upside from current trading levels near $218), Lowe's offers attractive risk-adjusted upside for patient holders, with the catalyst path tied to housing-turnover recovery and successful Pro share gains.
Headline KPIs at a Glance
Acquisitions lift the top line, comp returns to positive.
Net sales of $23.08 billion grew 10.3% YoY, comprised of 0.6% organic comp growth plus the inorganic contribution from FBM and ADG. The headline 10.3% growth rate overstates the underlying organic momentum: excluding acquisitions, the underlying business grew at low-single-digit pace, consistent with Home Depot's Q1 comp performance and the broader home-improvement category.
Margin pressure from acquisitions and mix
GAAP diluted EPS of $2.90 declined modestly versus $2.92 in the prior year, reflecting the $96 million ($0.17 per share) pre-tax acquisition-related intangible amortization. Adjusted diluted EPS of $3.03 grew 3.8% and approximately matched consensus. Excluding the acquisitions, underlying gross margin would have been roughly flat year-over-year.
Pro, online, appliances all positive.
Pro channel. Pro sales outpaced DIY for the fourth consecutive quarter. The acquisitions of FBM and ADG materially expand Lowe's reach into specialty distribution and project services. Pro is a multi-year share-gain opportunity given Lowe's historical under-indexing relative to Home Depot.
Online. Online sales of +15.5% accelerated versus the trailing-twelve-month trend. Mobile app engagement is up meaningfully and the integrated MyLowe's Pro rewards program continues to drive frequency. Online conversion rates improved and contribution margin from the online channel continues to scale toward parity with stores.
Appliances and Home Services. Both posted positive comp sales. Appliances benefit from older installed-base replacement cycles independent of housing turnover, and Home Services continues to be an underappreciated growth lever as Lowe's expands installation services.
Stores and footprint. Lowe's operated 1,759 stores representing 196.0 million square feet of retail selling space at quarter-end. The company also operates 540 branches and 120 distribution centers and employs approximately 300,000 associates.
FY26 outlook affirmed.
| Metric | FY2026 Guidance (Affirmed) | Change vs. Prior |
|---|---|---|
| Total Sales | $92.0B to $94.0B (+7-9%) | Affirmed |
| Comparable Sales | Flat to +2.0% | Affirmed |
| Operating Margin (GAAP) | 11.2% to 11.4% | Affirmed |
| Adjusted Operating Margin | 11.6% to 11.8% | Affirmed |
| Effective Tax Rate | ~24.5% | Affirmed |
| Diluted EPS (GAAP) | $11.75 to $12.25 | Affirmed |
| Adjusted Diluted EPS | $12.25 to $12.75 | Affirmed |
| Net Interest Expense | ~$1.6B | Affirmed |
| Capital Expenditures | Up to $2.5B | Affirmed |
Surprises and their stock-price implications
- Fourth consecutive quarter of positive comp sales. The streak ending eight prior quarters of negative comps is genuinely meaningful, even if the magnitude of +0.6% is modest. The directional inflection supports the multi-year recovery thesis.
- Online sales up 15.5%. Acceleration versus prior trend. Pro online ordering, mobile app engagement and the loyalty program are driving frequency.
- Pro outpaced DIY again. Fourth consecutive quarter of Pro outperformance. The FBM and ADG acquisitions extend the Pro share-gain opportunity meaningfully.
- FY26 guidance affirmed, not raised. Like Home Depot, management chose appropriate caution despite the Q1 beat. Reflects visibility limitations on the back half.
- $96 million of acquisition-related amortization. The non-GAAP adjustment is recurring through fiscal 2026 and into fiscal 2027 as intangibles amortize. The $0.17 per share GAAP versus adjusted spread will persist.
- Share repurchases of $363 million. Buybacks have not been fully paused. Management is balancing the FBM/ADG cash deployment with continued capital returns to shareholders.
- Inventory build of approximately $1.1 billion. Working capital absorbed cash in Q1 to support the spring selling season. Likely reverses in Q2 and Q3 as inventory clears.
Buy consensus, ~29% implied upside.
LOW shares closed May 19 at $218.37, then traded down approximately 2.94% to $211.95 in pre-market on May 20 before recovering intraday to close near $221 (+1.23%). The mixed initial reaction reflected investor caution on the housing macro despite the operational beat. The stock has underperformed both Home Depot and the S&P 500 consumer discretionary index year to date (-8.6% YTD) on the same housing-turnover overhang plus modest skepticism on the FBM/ADG integration. The 52-week range is approximately $210 to $295 and the current market capitalization stands at approximately $123 billion.
Analyst recalibration
Sell-side sentiment is constructive. The consensus rating is Buy. According to one tracker, 22 Buy, 12 Hold and 1 Sell ratings underpin the consensus. The 12-month average price target is approximately $285, with a high target of $325 and a low of $220.
Housing turnover, integration risk, leverage.
Primary risks
- Housing turnover. Same headwind as Home Depot: depressed existing-home transaction volumes limit big-ticket discretionary spending. Until mortgage rates ease meaningfully, comp growth will remain modest.
- Acquisition integration. FBM (closed late 2025) and ADG are sizable, complex transactions. Integration execution risk is real, particularly around culture, systems, and Pro-channel cross-sell.
- Pro share gains. Lowe's historical under-indexing in Pro means it has share to gain, but execution must be near-flawless given Home Depot's incumbency.
- Tariff exposure. Like Home Depot, Lowe's imports a meaningful share of merchandise. Tariff pass-through versus absorption is a margin watch item.
- Leverage. Long-term debt grew approximately $6 billion year-over-year to $36.75 billion to fund FBM. Net debt to EBITDA is elevated relative to historical levels; debt paydown will limit buyback capacity in the near term.
Catalysts to watch
- Q2 FY26 print (late August 2026) and updated housing turnover commentary.
- FBM and ADG cross-sell milestones and integration disclosures.
- U.S. mortgage rate trajectory.
- Resumption of pace on share repurchases as leverage moderates.
- Total Home strategy execution updates (Pro-channel share, MyLowe's Pro rewards).
- Hurricane and weather-event-related spending in the back half.
Lowe's delivered a credible Q1 FY26 print: fourth consecutive quarter of positive comps, online sales up 15.5%, Pro outpacing DIY, and full-year guidance affirmed. The FBM and ADG acquisitions reshape the Pro channel meaningfully and extend the multi-year recovery thesis. With a Buy consensus and 12-month average price target near $285 (about 29% upside), LOW offers attractive risk-adjusted upside for patient holders. We view it as a Buy for long-term holders with a 2 to 3 year horizon and a constructive Hold for tactical positioning, with the housing-turnover recovery the principal catalyst path.
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