Home Depot & Lowe's Earnings: Turnaround Time?

Core Insights - Lowe's (LOW) and Home Depot (HD) are in a competitive market, both facing challenges as consumer spending on big-ticket home improvement items has decreased post-COVID [1][15] - Both companies have underperformed relative to the S&P 500 in 2025, reflecting a similar trajectory in their stock performances [1][7] Analyst Expectations - Analysts have not revised EPS and sales estimates for both companies recently, with LOW expected to see 1.5% EPS growth on 3.4% higher sales, while HD is projected to have a 5.4% increase in EPS with 1.0% sales growth [3] - Despite LOW's anticipated stronger sales growth, HD has shown more resilience in its top line, with year-over-year (YoY) growth rates turning positive after previous declines [4][5] Sales and Performance Metrics - LOW's YoY sales growth rates have been negative since early 2023, while HD's sales have shown improvement with a smaller YoY decline of 0.3% compared to LOW's 1.7% [8][10] - HD's shares trade at a forward 12-month earnings multiple of 25.3X, a 29% premium over LOW's 19.6X, indicating a historical premium for HD [9] Market Environment - Both companies are navigating a challenging demand environment post-COVID, with rising interest rates contributing to softer consumer demand [15][16] - Guidance from Home Depot's earnings report will be crucial for LOW's expectations, as both companies maintain a Zacks Rank 3 (Hold) [17]