Lowe's(LOW) - 2026 Q2 - Quarterly Results

Lowe's Second Quarter 2025 Earnings Release Q2 2025 Financial Highlights 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] Management Commentary and Strategic Updates 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] - 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] - As of August 1, 2025, Lowe's operated 1,753 stores[2] Capital Allocation 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 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] 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 This section presents Lowe's consolidated statements of earnings, balance sheets, and cash flows Consolidated Statements of Earnings 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 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 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] - Share repurchases for the six-month period decreased dramatically from $1.93 billion in 2024 to $113 million in 2025[17] Non-GAAP Financial Measure Reconciliation 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] - 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] 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 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] - Potential risks that could affect results include changes in economic conditions, inflation, labor supply issues, interest rate fluctuations, and housing market turnover[11]