Lowe’s Posts $2.4 Billion Q2 Profit as Online Sales Jump 15.7%

Lowe’s Companies reported second-quarter net earnings of $2.399 billion, essentially unchanged from $2.398 billion a year earlier, even as quarterly sales rose by nearly $2 billion. Diluted earnings per share were $4.27, matching the prior-year quarter, while total sales reached $25.956 billion from $23.959 billion.

The more revealing operating figure was comparable sales, which increased just 0.2%. Lowe’s said growth in its Pro business, home services and digital channel offset continued weakness in discretionary do-it-yourself spending. Online sales rose 15.7%, giving the retailer a stronger digital contribution even as the broader home-improvement consumer remained cautious.

In its second-quarter earnings release, Lowe’s said the period marked its fifth consecutive quarter of positive comparable sales. Lowe’s also narrowed its fiscal 2026 outlook, setting several major targets at the low end of the ranges it had previously provided.

Online, Pro and home services support comparable sales

The 15.7% increase in online sales stood out against the modest 0.2% rise in comparable sales. Lowe’s includes online activity in its comparable-sales calculation, so digital growth directly supported the quarterly comp even as pressure on discretionary DIY projects limited the overall increase.

The company had already been pointing to Pro customers, online demand and home services as important growth areas earlier in the year. In the first quarter, comparable sales increased 0.6%, and Lowe’s said online sales added about 185 basis points to that result. The second-quarter figures indicate that digital demand remained a meaningful source of growth rather than a one-quarter boost.

Professional customers are also central to Lowe’s acquisition strategy. Lowe’s completed its $1.3 billion acquisition of Artisan Design Group in June 2025 and its $8.8 billion acquisition of Foundation Building Materials in October 2025. ADG provides interior design, distribution and installation services to homebuilders and property managers, while FBM distributes building materials and construction products. Lowe’s has positioned both businesses as ways to expand its reach with larger professional customers and homebuilders.

Those acquisitions also help explain why investors should not treat the roughly 8.3% rise in total sales and the 0.2% comparable-sales increase as interchangeable measures. Lowe’s says acquisitions are typically added to comparable sales only after they have been owned for more than 12 months, while comparable locations must generally have been open longer than 13 months. The company operated 1,761 stores at the end of the quarter, representing 196.0 million square feet of retail selling space.

Profit holds steady as margins narrow

Net earnings were almost exactly flat from a year earlier, but the underlying income statement showed a mix of higher sales and lower margins. Gross margin fell to 33.04% of sales from 33.81%, while operating margin declined to 13.67% from 14.48%. Even so, operating income increased to $3.549 billion from $3.469 billion because the company generated more revenue on the larger sales base.

Selling, general and administrative expense improved slightly as a share of sales, falling to 17.17% from 17.42%. Depreciation and amortization rose to 2.20% of sales from 1.91%, and net interest expense increased to 1.44% from 1.31%. Lowe’s reported $96 million of pre-tax expenses tied to intangible-asset amortization from the ADG and FBM acquisitions.

Excluding those acquisition-related expenses, adjusted diluted EPS was $4.40, up 1.6% from the prior-year adjusted figure. Both reported and adjusted EPS included an $0.11 per-share benefit from refunds of tariffs imposed under the International Emergency Economic Powers Act. Earlier in 2026, Lowe’s had described the timing and ultimate amount of such refunds as uncertain, making the recognized benefit a meaningful item when comparing the quarter with underlying operations.

The company also furnished the quarterly results to the Securities and Exchange Commission on Form 8-K. For the first six months of fiscal 2026, Lowe’s generated $7.009 billion of operating cash flow, down from $7.610 billion in the comparable period, and spent $1.063 billion on capital expenditures. It also repaid $2.397 billion of debt during the first half and made $1.346 billion of cash dividend payments. In the second quarter alone, the company said it paid $673 million in dividends.

Lowe’s narrows its 2026 outlook

The outlook update was the clearest sign that management is not assuming the stronger areas of the business will translate into a broad rebound in home-improvement demand this year. Lowe’s now expects fiscal 2026 total sales of $92.0 billion, compared with its previous range of $92.0 billion to $94.0 billion. Comparable sales are now expected to be flat, versus the earlier forecast of flat to up 2%.

Management also set its operating-margin forecast at 11.2%, the bottom of its prior 11.2% to 11.4% range. Adjusted operating margin is expected to be 11.6%, compared with the previous 11.6% to 11.8% range. Diluted EPS is now projected at about $11.75, down from a prior range of $11.75 to $12.25, while adjusted diluted EPS is expected to be about $12.25, compared with the earlier $12.25 to $12.75 range.

Lowe’s kept several other assumptions largely steady, including net interest expense of about $1.6 billion, an effective tax rate of roughly 24.5% and capital expenditures of up to $2.5 billion. Lowe’s said the updated guidance includes tariff refunds already recognized in the second quarter but does not assume any additional refunds during the second half of the year.

Strong online growth and continued Pro and home-services demand gave Lowe’s pockets of momentum in the quarter, but discretionary DIY spending remained a constraint. The revised guidance reflects the first-half results and the demand trends the company now sees for the rest of fiscal 2026. Lowe’s lists its third-quarter 2026 earnings conference call for Nov. 18 on a tentative basis, providing the next scheduled checkpoint on whether those pressures are easing.