Group 1 - The core point of the article is that Lowe's (LOW.US) stock price increased by 3.74% in pre-market trading, reaching $265.95, following the announcement of its second-quarter earnings [1] - Lowe's adjusted earnings per share for the second quarter were reported at $4.33, exceeding the estimated $4.24 [2] Group 2 - The closing price on August 19 was $256.36, with a pre-market price of $265.95 on August 20 [1] - The stock's highest price during the trading session was $258.38, and the lowest was $254.76, with a trading volume of 4.7026 million shares [1] - The total market capitalization of Lowe's is approximately $143.674 billion, with a total share count of 560 million [1]

Core Viewpoint - The stock of the company has seen a pre-market increase of 6% as of August 20 [1] Group 1 - The company's stock performance indicates a positive market reaction [1]

Group 1 - Lowe's exceeded Wall Street's earnings expectations, driven by increased demand for home projects during the quarter [1] - The company announced the acquisition of Foundation Building Materials for approximately $8.8 billion to enhance its business with home professionals [1] - Lowe's revised its full-year sales outlook to a range of $84.5 billion to $85.5 billion, up from the previous range of $83.5 billion to $84.5 billion [2] Group 2 - For fiscal Q2, Lowe's reported a net income of $2.4 billion, or $4.27 per share, compared to $2.38 billion, or $4.17 per share, in the same period last year [3] - Revenue for the quarter increased to $29.36 billion, surpassing expectations of $23.96 billion [6] - The company reiterated its comparable sales forecast, expecting them to be flat to up 1% from the prior year [2]

Acquisition - Lowe's agreed to acquire Foundation Building Materials for approximately $88 billion [1] Industry - Foundation Building Materials is a North American distributor of drywall and other building products [1]

Core Viewpoint - American Securities LLC and CD&R have entered into a definitive agreement to sell Foundation Building Materials, Inc. (FBM) to Lowe's Companies, Inc. for $8.8 billion [1] Company Overview - FBM is a leading North American distributor of interior building products, including drywall, metal framing, ceiling systems, commercial doors and hardware, insulation, and complementary products, serving large residential and commercial professionals [2] - Founded in 2011 and headquartered in Santa Ana, California, FBM operates over 370 locations across the U.S. and Canada, catering to 40,000 professional customers [5] Financial Performance - Under the ownership of American Securities and CD&R, FBM has achieved 27% annual revenue growth and 31% annual EBITDA growth [3] - The growth has been driven by both organic expansion and strategic acquisitions, including the purchase of Beacon Roofing Supply's interior products business and others [3] Strategic Initiatives - FBM has launched a new e-commerce platform and digital application to enhance customer service and has invested in expanding its commercial capabilities [3] - The company has focused on strengthening its capabilities and enhancing its customer value proposition through organic growth initiatives and strategic acquisitions [4][3] Transaction Details - The transaction is expected to close in the fourth quarter of 2025, pending customary closing conditions and regulatory approvals [4]

[Lowe's Second Quarter 2025 Earnings Release](index=1&type=section&id=Lowe%27s%20Second%20Quarter%202025%20Earnings%20Release) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Lowe's Q2 2025 saw total sales of **$24.0 billion**, **1.1%** comparable sales growth, and adjusted diluted EPS of **$4.33**, up **5.6%** Q2 2025 Key Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales (USD Billions) | $24.0 | $23.6 | +1.7% | | Comparable Sales (%) | +1.1% | N/A | N/A | | Net Earnings (USD Billions) | $2.4 | N/A | N/A | | Diluted EPS (USD) | $4.27 | $4.17 | +2.4% | | Adjusted Diluted EPS (USD) | $4.33 | $4.10 | +5.6% | - The acquisition of Artisan Design Group (ADG) incurred **$43 million** in pre-tax expenses, which negatively impacted the second quarter diluted EPS by **$0.06**[1](index=1&type=chunk) [Management Commentary and Strategic Updates](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Updates) Management highlighted positive comparable sales in Pro and DIY, with the ADG acquisition expanding into new home construction - Positive comparable sales were driven by solid performance in both the Professional (Pro) and Do-It-Yourself (DIY) customer segments[2](index=2&type=chunk) - The acquisition of Artisan Design Group (ADG) is intended to strengthen the company's ability to capture a larger share of Pro customer spending and expand its presence in the new home construction market[2](index=2&type=chunk) - As of August 1, 2025, Lowe's operated **1,753 stores**[2](index=2&type=chunk) [Capital Allocation](index=1&type=section&id=Capital%20Allocation) Lowe's Q2 capital allocation included a **$1.3 billion** ADG acquisition and **$645 million** in shareholder dividends Q2 2025 Capital Allocation Summary | Capital Allocation Activity | Amount (USD Billions/Millions) | | :--- | :--- | | Acquisition of ADG | $1.3 billion | | Dividends Paid | $645 million | [Full Year 2025 Business Outlook](index=3&type=section&id=Full%20Year%202025%20Business%20Outlook) Full-year 2025 outlook updated for ADG acquisition, projecting total sales of **$84.5-$85.5 billion** and adjusted diluted EPS of **$12.20-$12.45** - The company's full-year 2025 outlook has been updated to reflect the inclusion of the recently acquired Artisan Design Group (ADG)[5](index=5&type=chunk) Full Year 2025 Financial Outlook | Metric | Full Year 2025 Outlook | | :--- | :--- | | Total Sales (USD Billions) | $84.5 to $85.5 | | Comparable Sales (%) | Flat to +1% | | Operating Margin (%) | 12.1% to 12.2% | | Adjusted Operating Margin (%) | 12.2% to 12.3% | | Diluted EPS (USD) | $12.10 to $12.35 | | Adjusted Diluted EPS (USD) | $12.20 to $12.45 | | Capital Expenditures (USD Billions) | Approx. $2.5 | [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Lowe's consolidated statements of earnings, balance sheets, and cash flows [Consolidated Statements of Earnings](index=5&type=section&id=Consolidated%20Statements%20of%20Earnings) Q2 2025 net sales rose to **$23.96 billion** with improved gross margin, while operating margin slightly decreased, and net earnings remained flat Consolidated Statements of Earnings (Three Months Ended) | (USD Millions) | Three Months Ended Aug 1, 2025 | Three Months Ended Aug 2, 2024 | | :--- | :--- | :--- | | Net sales | $23,959 | $23,586 | | Gross margin | $8,101 | $7,895 | | Operating income | $3,469 | $3,447 | | Net earnings | $2,398 | $2,383 | | Diluted EPS (USD) | $4.27 | $4.17 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to **$46.6 billion** due to cash and acquisition-related intangibles, with liabilities decreasing and shareholders' deficit improving Consolidated Balance Sheets (As of) | (USD Millions) | August 1, 2025 | August 2, 2024 | | :--- | :--- | :--- | | Total current assets | $22,639 | $22,337 | | Merchandise inventory - net | $16,342 | $16,841 | | Goodwill | $691 | $311 | | Intangibles - net | $976 | $284 | | Total assets | $46,614 | $44,934 | | Total liabilities | $58,014 | $58,697 | | Total shareholders' deficit | $(11,400) | $(13,763) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to **$7.6 billion**, investing activities surged to **$2.3 billion** due to an acquisition, and financing cash outflow decreased Consolidated Statements of Cash Flows (Six Months Ended) | (USD Millions) | Six Months Ended Aug 1, 2025 | Six Months Ended Aug 2, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,610 | $7,415 | | Net cash used in investing activities | $(2,343) | $(800) | | Net cash used in financing activities | $(2,168) | $(3,176) | | Net increase in cash and cash equivalents | $3,099 | $3,439 | - The significant increase in cash used for investing activities was driven by a **$1.314 billion** payment for the acquisition of a business[17](index=17&type=chunk) - Share repurchases for the six-month period decreased dramatically from **$1.93 billion** in 2024 to **$113 million** in 2025[17](index=17&type=chunk) [Non-GAAP Financial Measure Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measure%20Reconciliation) This section reconciles GAAP to non-GAAP diluted EPS, adjusting for ADG acquisition expenses in Q2 2025 and Canadian retail business sale gain in Q2 2024 - In Q2 2025, GAAP earnings were adjusted to exclude **$43 million** in pre-tax expenses from the Artisan Design Group acquisition[19](index=19&type=chunk) - In Q2 2024, GAAP earnings were adjusted to exclude a **$43 million** pre-tax gain related to the sale of the Canadian retail business[20](index=20&type=chunk) Diluted EPS Reconciliation (Non-GAAP) | Reconciliation | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted EPS, As Reported (GAAP) (USD) | $4.27 | $4.17 | | Artisan Design Group acquisition impact (USD) | +$0.06 | - | | Canadian retail business transaction impact (USD) | - | -$0.07 | | **Adjusted Diluted EPS (Non-GAAP) (USD)** | **$4.33** | **$4.10** | [Disclosure Regarding Forward-Looking Statements](index=4&type=section&id=Disclosure%20Regarding%20Forward-Looking%20Statements) This standard disclaimer cautions that forward-looking statements involve risks and uncertainties, and actual results may differ due to economic and market factors - The press release includes forward-looking statements involving risks and uncertainties, and the company provides no assurance that they will prove to be correct[10](index=10&type=chunk) - Potential risks that could affect results include changes in economic conditions, inflation, labor supply issues, interest rate fluctuations, and housing market turnover[11](index=11&type=chunk)

Core Viewpoint - Lowe's Companies, Inc. has announced a definitive agreement to acquire Foundation Building Materials for approximately $8.8 billion, aiming to enhance its offerings for professional customers and position the company for long-term sustainable sales growth and profit expansion [1][4]. Company Overview - Lowe's is a leading home improvement company in North America, serving around 16 million customer transactions weekly, with total fiscal year 2024 sales exceeding $83 billion and operating over 1,700 stores [9]. - Foundation Building Materials is a prominent distributor of interior building products in North America, with over 370 locations and a revenue of approximately $6.5 billion in 2024 [2][10]. Acquisition Details - The acquisition price of $8.8 billion reflects an adjusted EBITDA multiple of 13.4x, and Lowe's has secured $9.0 billion in bridge financing from Bank of America and Goldman Sachs [5][6]. - The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approval, and is anticipated to be accretive to adjusted diluted earnings per share in the first full year post-closing [6]. Strategic Implications - The acquisition is expected to accelerate Lowe's Total Home strategy by enhancing its offerings to professional customers through improved capabilities, faster fulfillment, and better digital tools [3][4]. - The combined strengths of Lowe's and FBM are projected to create a premier platform for serving professional customers in a $250 billion total addressable market [4]. Financial Performance - FBM has demonstrated significant growth, achieving a compound annual growth rate (CAGR) of approximately 25% for revenue and 30% for adjusted EBITDA from 2019 to 2024 [2].

Core Insights - Lowe's Companies, Inc. reported net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.27 for the quarter ended August 1, 2025, an increase from diluted EPS of $4.17 in the same quarter of the previous year [2][16] - Comparable sales increased by 1.1% during the quarter, with total sales reaching $24.0 billion compared to $23.6 billion in the prior-year quarter [3][4] - The company recognized $43 million in pre-tax expenses related to the acquisition of Artisan Design Group (ADG), which negatively impacted diluted EPS by $0.06 [2][21] Financial Performance - Adjusted diluted EPS for the quarter was $4.33, reflecting a 5.6% increase compared to the prior-year adjusted diluted EPS of $4.10 [2][24] - Gross margin for the quarter was $8.1 billion, representing 33.81% of net sales, compared to 33.47% in the prior-year quarter [16] - Operating income was $3.469 billion, with an operating margin of 14.48% for the quarter [16] Capital Allocation - The company invested $1.3 billion in the acquisition of ADG and paid $645 million in dividends during the quarter [5][16] - Cash and cash equivalents at the end of the period were $4.86 billion, an increase from $4.36 billion a year earlier [19][18] Business Outlook - Lowe's updated its full-year 2025 outlook to reflect the inclusion of ADG, maintaining expectations for core business performance [6][12] - The company anticipates total sales for fiscal 2025 to be between $84.5 billion and $85.5 billion, with comparable sales expected to be flat to up 1% compared to the prior year [12][6] Operational Highlights - As of August 1, 2025, Lowe's operated 1,753 stores, representing 195.5 million square feet of retail selling space [4] - The company serves approximately 16 million customer transactions weekly in the United States [10]

Market Overview - U.S. stock futures declined on Wednesday following mixed trading on Tuesday, with major benchmark indices showing lower futures [1] - The S&P 500 and Nasdaq 100's retreat was attributed to failed peace talks involving President Trump and European leaders [1] - The Dow Jones index ended slightly higher, while the S&P 500 and Nasdaq Composite saw declines of 0.59% and 1.46% respectively [6][7] Economic Indicators - Investors are focused on Federal Reserve Chair Jerome Powell's upcoming speech for signals on interest rates, with an 82.9% likelihood of a rate cut projected for the September 17 decision [2] - The 10-year Treasury bond yielded 4.31%, while the two-year bond was at 3.76% [2] - U.S. housing starts increased by 5.2% to an annualized rate of 1.428 million in July, while building permits declined by 2.8% to an annualized rate of 1.354 million [5] Company Performance - Intel Corp. saw a 7% rally, extending its monthly gains to 27% after a $2 billion investment from SoftBank Group [5] - Palo Alto Networks Inc. jumped over 3% after reporting strong quarterly results [5] - La-Z-Boy Inc. dropped 24.57% after reporting weaker-than-expected financial results for Q1 of fiscal 2026 [15] Sector Performance - Real estate, utilities, and consumer staples stocks recorded the biggest gains on Tuesday, while information technology and communication services sectors closed lower [4] - Small-cap and value stocks have shown a tight correlation with interest rate expectations, becoming increasingly reactive to the Fed's next move [10][11] Analyst Insights - Economist Jeremy Siegel emphasized that Powell's speech could significantly influence market direction, with two primary scenarios outlined [9][10] - A dovish tone from Powell could signal a 25-basis-point rate cut, potentially benefiting small-cap stocks [14] - Conversely, a hawkish signal could lead to negative reactions in risk markets [14]

Group 1 - Lowe's Companies, Inc. is set to release its second-quarter earnings results on August 20, with expected earnings of $4.24 per share, an increase from $4.10 per share in the same quarter last year [1] - The company is projected to report quarterly revenue of $23.96 billion, compared to $23.59 billion generated in the same quarter last year [1] Group 2 - In the first quarter of fiscal 2025, Lowe's reported mixed results, with shares gaining 2.2% to close at $256.36 [2] - Analysts have provided various ratings for Lowe's, with Citigroup maintaining a Neutral rating and lowering the price target from $253 to $242 [7] - Guggenheim reiterated a Buy rating with a price target of $300, while RBC Capital maintained a Sector Perform rating and cut the price target from $244 to $242 [7] - Baird maintained an Outperform rating and reduced the price target from $295 to $285, and DA Davidson maintained a Neutral rating, slashing the price target from $270 to $240 [7]