Lowe’s (LOW) Q4 2025 earnings

On Lowe’s earnings call, CEO Marvin Ellison said the backdrop remains challenging for home improvement due to a mix of higher inflation, economic uncertainty and elevated mortgage rates.

“A persistent lock-in effect remains in place, keeping housing turnover and new home starts under pressure, leading us to expect improvement in both the housing and home improvement markets to be gradual,” he said.

Still, he said the company’s strategy is resonating with its do-it-yourself customers and home professionals, as it offer more flexible delivery options, better digital experiences and more installation services.

And, he added, its recent acquisitions of two home professional-focused companies means Lowe’s is “well positioned to participate in the expected recovery in housing as we start the year.”

The company said it expects total sales for the full current fiscal year to range between $92 billion and $94 billion, which would be a roughly 7% to 9% increase over the prior year. It said it projects adjusted earnings per share to be between $12.25 and $12.75 for the full year. Lowe’s said it expects comparable sales, a metric that takes out one-time factors, to be approximately flat to up 2%.

Shares of Lowe’s fell more than 3% in early trading on Wednesday as the company’s earnings per share projections for the year fell short of analysts’ consensus expectations of $12.95, according to LSEG.

Here’s what Lowe’s reported for the fiscal fourth quarter compared with Wall Street’s estimates, according to a survey of analysts by LSEG:

• Earnings per share: $1.98 adjusted vs. $1.94 expected
• Revenue: $20.58 billion vs. $20.34 billion expected

Lowe’s net income for the three-month period that ended Jan. 30 dropped to $999 million, or $1.78 per share, from $1.13 billion, or $1.99 per share, in the year-ago quarter. Excluding one-time factors, including expenses associated with recent acquisitions, Lowe’s reported adjusted earnings per share of $1.98.

Revenue rose from $18.55 billion in the year-ago period.

Comparable sales for the quarter climbed 1.3%, higher than the 0.2% that analysts were expecting, according to StreetAccount. The company said in a news release that growth was driven by its gains with home professionals, online sales and home services, along with a strong holiday season.

Lowe’s posted growth in nine of its 14 merchandising categories, said Bill Boltz, executive vice president of merchandising, on the company’s earnings call. Some of the categories and items that sold well are more closely tied to pros, such as sales of plumbing supplies like water heaters and millwork for windows and doors, Boltz said. Yet the company also saw strength with paint sales, as customers bought interior and exterior paint, primer and stains, he said.

Lowe’s results reinforce the housing market’s struggles a day after rival Home Depot said it is still seeing similar reluctance to take on big housing projects.

Home Depot on Tuesday beat Wall Street’s earnings and revenue expectations, but stuck by conservative full-year guidance. Its quarterly results reflected that home improvement demand remains tepid, as U.S. consumers continue to put off big projects because of high borrowing costs and housing prices as well as economic concerns.

Like Home Depot, Lowe’s has felt pinched by a tougher backdrop for the industry. Both have acquired companies that cater to contractors and other professionals, which tend to be a steadier source of business.

Last year, Lowe’s acquired Foundation Building Materials, a distributor of drywall, insulation and other interior building products for large residential and commercial professionals, for about $8.8 billion. It also bought Artisan Design Group, which provides design services and installation of flooring, cabinets and countertops for homebuilders and property managers, for about $1.33 billion.

Lowe’s has also made its own moves to reach customers who are delaying home purchases, such as launching a third-party marketplace to expand its mix of merchandise, tapping influencers to raise its visibility on social media and reaching out to young families by relaunching its kids’ program.

Yet Lowe’s and Home Depot are still waiting for signs that U.S. consumers are ready to jump back in to buying, selling and fixing up their homes at a more typical rate.

Ellison said on the company’s earnings call that Lowe’s still expects “relatively flat” demand in the home improvement industry this year. Its own full-year sales forecast is based on expectations that it will outperform the market, he said.

He said the company is closely watching if there’s a shift toward more pricier discretionary purchases.

“When we start to see a sustained number of discretionary big-ticket purchases from the DIY [do-it-yourself shopper], that’s going to give us an indication that the consumer is getting healthier and they’re more confident in making those purchases,” he said.

As of Tuesday’s close, Lowe’s shares are up nearly 16% year to date, surpassing the S&P 500’s roughly 1% gains during the same period. Its stock has risen about 15% over the past year, almost matching the S&P 500’s approximately 16% gains over that time.