Financial Data and Key Metrics Changes - In Q2 2025, the company reported sales of $24 billion, with comparable sales increasing by 1.1% [7][26] - Adjusted diluted earnings per share reached $4.33, marking a 5.6% increase compared to the previous year [7][25] - Adjusted gross margin improved to 33.8%, up 37 basis points from the prior year [26] - Inventory at the end of Q2 was $16.3 billion, down $499 million year-over-year [27] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in nine out of fourteen merchandise divisions, particularly in pro and online segments [12] - Strong performance was noted in seasonal categories, especially in lawn and garden, tools, and building products [12][14] - The flooring category showed strength across carpet, tile, and adhesives, with the introduction of Dal Tile expected to enhance offerings [65] Market Data and Key Metrics Changes - The macro environment remains supportive for homeowners, with strong balance sheets and low unemployment contributing to a positive outlook for the home improvement industry [10] - Analysts estimate approximately $50 billion in deferred project demand due to delayed discretionary projects over recent years [10] - The need for an estimated 18 million new homes by 2033 indicates a healthy pipeline for home improvement and new construction [11] Company Strategy and Development Direction - The acquisition of Foundation Building Materials (FBM) is seen as a transformational move to enhance the company's pro offerings and diversify revenue streams [5][6] - The company aims to leverage FBM's capabilities to serve larger professional customers within a $250 billion total addressable market [5][42] - The strategy focuses on integrating acquisitions to create a comprehensive interior solutions platform for large pro customers [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the uncertain environment while providing value to customers [28] - The outlook for the home improvement market remains flat, with expectations for gradual improvements in the underlying business [29][77] - Management highlighted the importance of continuous improvement initiatives and the positive sentiment among professional customers regarding their job prospects [21][64] Other Important Information - The company generated $3.7 billion in free cash flow during Q2, with $1.3 billion allocated for the acquisition of ADG [28] - The acquisition of FBM is expected to close in 2025, with a purchase price of $8.8 billion [44] - The company plans to maintain its investment-grade credit ratings while focusing on growth and shareholder returns [45] Q&A Session Summary Question: Can you expand on Foundation's year-to-date performance in 2025? - Management refrained from providing specific details until after the transaction closes but expressed excitement about FBM's historical performance [50] Question: What percentage of the 33,000 SKUs will be net new to Lowe's offering? - Management indicated it is too early to provide specifics but sees significant opportunities for complementary products [51] Question: Can you provide insights from the pro sentiment survey? - Pros reported stable backlogs and confidence in job prospects, although labor costs are rising [63][64] Question: What is happening in the flooring category? - Strength was noted in both DIY and pro segments, with the introduction of Dal Tile expected to enhance offerings [65] Question: Can you provide customer numbers or makeup for FBM? - FBM has about 40,000 customers, with a balanced mix of residential and commercial clients [72] Question: How much of the guidance for the back half is due to pricing? - Management indicated that pricing strategies are dynamic and will continue to be competitive [78] Question: Is there a secondary investment cycle emerging in the core Lowe's supply chain? - Management acknowledged the need for continuous investment in the platform but does not foresee another large acquisition soon [86]

Financial Data and Key Metrics Changes - The company reported sales of $24 billion for the quarter, with comparable sales increasing by 1.1% [6][24] - Adjusted diluted earnings per share reached $4.33, marking a 5.6% increase compared to the previous year [6][23] - Adjusted gross margin improved to 33.8%, up 37 basis points from last year [25] - Inventory at the end of Q2 was $16.3 billion, down $499 million year-over-year [26] Business Line Data and Key Metrics Changes - Positive comparable sales were delivered in nine of the fourteen merchandise divisions, with notable growth in pro and online sales [11][12] - The lawn and garden category saw strong performance, driven by live goods and seasonal offers [12] - Building products, including plumbing repair and drywall, also experienced positive comps, reflecting ongoing momentum in repair and maintenance projects [13] Market Data and Key Metrics Changes - The macro environment remains supportive for homeowners, with strong balance sheets, wage growth, and low unemployment [9] - Analysts estimate approximately $50 billion in deferred project demand due to delayed discretionary projects over the past few years [9] - The need for an estimated 18 million new homes by 2033 indicates a healthy pipeline for home improvement and new construction [10] Company Strategy and Development Direction - The acquisition of Foundation Building Materials (FBM) is seen as a transformational move to enhance the company's pro offerings and capture a larger share of the $250 billion total addressable market [5][39] - The company aims to integrate FBM's capabilities to improve job site delivery and expand product offerings for pro customers [37][39] - The strategy focuses on leveraging acquisitions to strengthen the pro distribution platform and enhance overall growth potential [38][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the home improvement industry, driven by aging housing stock and pent-up demand [9][10] - The company anticipates a flat home improvement market for the remainder of the year, with expectations for gradual improvements in underlying business performance [28][72] - Management highlighted the importance of continuous improvement initiatives to navigate the uncertain environment and deliver value to customers [27][60] Other Important Information - The company generated $3.7 billion in free cash flow during the quarter and paid $645 million in dividends [27] - The acquisition of ADG was completed in June, and it is expected to complement the FBM acquisition by offering a comprehensive interior solutions platform [10][41] Q&A Session Summary Question: Can you expand on Foundation's year-to-date performance in 2025? - Management refrained from providing specific details until after the transaction closes but expressed excitement about FBM's historical performance [46] Question: What percentage of the 33,000 SKUs will be net new to Lowe's? - Management indicated it is too early to provide specifics but sees significant opportunities for complementary products [47] Question: Can you elaborate on the pro sentiment survey results? - Pros reported stable backlogs and confidence in job prospects, although labor costs are rising [58][60] Question: What is the customer makeup of FBM? - FBM serves about 40,000 customers with a balanced mix of 45% residential and 55% commercial, minimizing concentration risk [68] Question: How does the company plan to leverage the acquisitions? - The combination of FBM and ADG is expected to create differentiation and allow the company to capture a larger share of the pro market [95]

Core Insights - The article discusses the author's long-term investment strategy and experience, particularly focusing on The Home Depot, Inc. (NYSE: HD) after a three-year hiatus in coverage [1]. Company Overview - The author has been managing their own portfolio since 1998, aiming to match the S&P 500 return over the long term with lower volatility and higher income [1]. - The author prefers to hold positions for the long term unless there is a compelling reason to sell, indicating a focus on intrinsic value [1]. Investment Strategy - The investment approach is to seek opportunities without regard to asset class, market cap, sector, or yield, emphasizing the importance of buying when prices are low relative to intrinsic value [1].

Q2 2025 Financial Performance - Lowe's reported positive comparable sales growth of +1.1%[1] and a gross margin of 33.8%[1], which is an increase of +34 basis points compared to the previous year[1] - Adjusted operating margin reached 14.7%[2], up +23 basis points year-over-year[2], with diluted EPS at $4.27[2], a +2.4% increase[2], and adjusted diluted EPS at $4.33[2], a +5.6% increase[2] - The company returned $645 million to shareholders through dividends[2] Sales Trends - Comparable transactions decreased by -1.0%[3], while the comparable average ticket increased by +0.3% to $104.60[3] - Online sales growth experienced a decline of -6.4%[3] - Monthly comparable sales performance varied, with May at -1.8%[3], June at +2.9%[3], and July at +7.5%[3] - Comparable sales by ticket size showed growth in the >$500 range at +3.6%[3], a decrease in the $100-$500 range at -1.4%[3], and a decrease in the <$100 range at -0.1%[3] - Positive comparable sales were achieved in 9 out of 14 product categories[5], including Building Materials, Lawn & Garden, and Appliances[5] Strategic Initiatives - Lowe's closed on the acquisition of Artisan Design Group (ADG)[6] - Pro penetration has increased from approximately 19% in 2019 to approximately 30% in 2025[23] - Lowe's announced the acquisition of Foundation Building Materials (FBM) on August 20, 2025[12] Foundation Building Materials (FBM) Acquisition - FBM has approximately $6.5 billion in pro forma 2024 revenue and $635 million in adjusted EBITDA[27] - The purchase price of $8.8 billion reflects a multiple of 13.4x adjusted EBITDA[50]

Company Overview - The Home Depot is the world's largest home improvement retailer, operating a total of 2,353 retail stores and over 800 branches across various regions including all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico [3] - The company employs over 470,000 associates and its stock is traded on the New York Stock Exchange (NYSE: HD), being included in the Dow Jones industrial average and Standard & Poor's 500 index [3] Upcoming Events - Ted Decker, chair, president and CEO, along with Billy Bastek, executive vice president of merchandising, will present at the Goldman Sachs 32nd Annual Global Retailing Conference on September 3, 2025, at 10:20 a.m. ET [1] - The presentation will be available via a live webcast and will be archived approximately one hour after the event [2]

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]

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].

— Diluted EPS of $4.27; Adjusted Diluted EPS1 of $4.33 — — Comparable Sales increased 1.1% — — Updates Full Year 2025 Outlook — MOORESVILLE, N.C., Aug. 20, 2025 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.27 for the quarter ended Aug. 1, 2025, compared to diluted EPS of $4.17 in the second quarter of 2024. During the second quarter, the company recognized $43 million pre-tax expenses associated with the acquisition ...

U.S. stock futures declined on Wednesday following Tuesday's mixed trading. Futures of major benchmark indices were lower. The S&P 500 and Nasdaq 100's retreat came as peace talks between President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders failed to deliver a breakthrough. After Home Depot Inc. HD, investors await Target Corp.'s TGT earnings today and Walmart Inc.'s WMT on Thursday. Investors are also focused on the Federal Reserve Chair Jerome Powell's speech later this we ...

Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables. Let's have a look at how Benzinga's most-accurate analysts have rated the company in the recent period. Considering buying LOW stock? Here's what analysts think: Lowe's Companies, Inc. LOW will release earnings results for the second quarter, before the opening bell on Wednesday, Aug. 20. Analysts expect the Mooresville, Nor ...