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Lowe's and Home Depot, two major home improvement retailers, have released quarterly financial results that exceeded analyst expectations for revenue and earnings per share. However, both companies issued cautious forward-looking guidance, reflecting ongoing challenges in the housing market and broader economic conditions.
Lowe's Fiscal Fourth Quarter Results
Financial Performance
For the fiscal fourth quarter ending January 30, Lowe's reported:
- Adjusted earnings per share: $1.98, exceeding the $1.94 analyst consensus.
- Revenue: $20.58 billion, surpassing the $20.34 billion forecast.
- Net income: $999 million ($1.78 per share), down from $1.13 billion ($1.99 per share) in the same period last year.
- Revenue growth: Increased from $18.55 billion in the prior-year period.
- Comparable sales: Rose 1.3%, higher than the 0.2% analysts anticipated.
Full-Year Guidance
For the current fiscal year, Lowe's projects:
- Total sales: Between $92 billion and $94 billion, representing a 7% to 9% increase from the previous year.
- Adjusted earnings per share: $12.25 to $12.75.
- Comparable sales: Approximately flat to up 2%.
Home Depot Fiscal First Quarter Results
Financial Performance
For the fiscal first quarter, Home Depot reported:
- Adjusted earnings per share: $3.43, exceeding the $3.41 analyst consensus.
- Revenue: $41.77 billion, surpassing the $41.52 billion forecast.
- Net income: $3.29 billion ($3.30 per share), down from $3.43 billion ($3.45 per share) a year earlier.
- Revenue growth: Up 5% year-over-year from $39.86 billion.
- Comparable store sales: Increased 0.6% overall and 0.4% in the U.S.
- Customer transactions: Fell 1.3% compared to the prior year.
- Average ticket size: Rose to $92.76 from $90.71.
Full-Year Guidance
Home Depot maintained its fiscal 2026 outlook:
- Total sales growth: Approximately 2.5% to 4.5%.
- Adjusted EPS growth: As much as 4%.
- Comparable sales growth: Flat to up 2%.
Industry and Economic Context
Housing Market Conditions
Both companies noted challenging conditions in the home improvement sector:
- High mortgage rates and slower real estate sales were cited as factors.
- Existing home sales remained flat in April.
- Gasoline prices rose 28% year-over-year, contributing to consumer caution.
Management Commentary
- Marvin Ellison, Lowe's CEO: Stated that the company's strategy is resonating with both do-it-yourself customers and home professionals despite industry challenges.
- Richard McPhail, Home Depot finance chief: Reported that the core homeowner customer remains financially resilient, but noted customers are deferring spending on larger projects.
- Ted Decker, Home Depot CEO: Said underlying demand was similar to fiscal 2025 levels, despite greater consumer uncertainty and housing affordability pressure.
"The core homeowner customer remains financially resilient, but they are deferring spending on larger projects." — Richard McPhail, Home Depot finance chief
Competitive Context
Home Depot noted strength from professional customers and homeowners purchasing spring supplies. Neil Saunders, managing director of GlobalData, commented that Home Depot is navigating the weak housing market well.
Stock Performance
Lowe's
- Year-to-date (as of Tuesday's close): Shares have risen nearly 16%, outperforming the S&P 500's approximately 1% gain.
- Past year: Up about 15%, nearly matching the S&P 500's approximately 16% increase.
- Following the report: Shares declined in premarket trading.
Home Depot
- Following the report: Shares edged higher in pre-market trading.