Lowe's Companies Inc (NYSE:LOW) reported fourth quarter and full-year results for fiscal 2025 this morning, posting stronger-than-expected earnings for the holiday quarter but offering a conservative outlook for 2026.
Shares traded down almost 5% in early trading following the report.
For the fourth quarter ended Jan. 30, Lowe’s reported net earnings of $1.0 billion and diluted EPS of $1.78, down from $1.1 billion and $1.99, respectively, a year earlier.
The quarter included $149 million in pre-tax expenses related to the acquisitions of Foundation Building Materials and Artisan Design Group. Excluding these items, adjusted EPS rose 2.6% to $1.98, surpassing the analyst consensus of $1.94.
Total sales for Q4 were $20.6 billion, up nearly 11% from $18.6 billion in the prior-year period. Comparable sales increased 1.3%, exceeding the expected 0.2%, driven by strong performance in the Pro segment, online sales, and home services.
For the full fiscal year, Lowe’s reported total sales of more than $86 billion and returned $2.6 billion to shareholders through dividends. The company operates 1,759 stores across the US.
Looking ahead, Lowe’s issued a cautious forecast for 2026 amid a pressured housing market. The company expects total sales of $92 billion to $94 billion, comparable sales to be flat to up 2%, and adjusted EPS of $12.25 to $12.75, below analyst estimates of $12.95.
Operating margins are projected at 11.2% to 11.4%, with adjusted operating margins of 11.6% to 11.8%. Capital expenditures are expected to total approximately $2.5 billion.
Analysts at Jefferies noted that the 1.3% comparable sales increase was “a standout” and exceeded expectations by more than a point, with management highlighting growth in Pro, online, and home services as well as a “strong” holiday season.
They added that gross margin came in slightly better than expected at 32.5%, though adjusted EBIT margin met consensus despite higher sales.
On the 2026 guidance, the analysts wrote that management appears “prudent” in assuming flat to 2% comps, given the lack of clear signs of improvement in housing activity.
They concluded that Lowe’s exposure to DIY does not prevent the company from potentially exceeding the midpoint of its guidance if market conditions improve.