stockrowWhat it does
Lowe’s is a home-improvement retailer founded in 1921, headquartered in Mooresville, and led by Chairman, President and Chief Executive Officer Marvin R. Ellison. It sells products for construction, maintenance, repair, remodeling and decorating, including appliances, lumber, lawn and garden products, tools, paint, flooring, kitchens and bath products, building materials, electrical products and décor.
The company serves homeowners and renters undertaking do-it-yourself projects or using installation help, as well as professional customers. Its core Pro customer base includes tradespeople, repair and remodel businesses, and property managers. Foundation Building Materials (FBM) and Artisan Design Group (ADG) extend its offering to larger residential and commercial professionals through branches that provide building-material distribution, design and installation services.
Lowe’s combines physical retail stores, branches, websites, mobile applications, contact centers and on-site sales specialists. Customers can research online, purchase in stores or digitally, collect purchases in store or at curbside, use lockers, arrange delivery, or buy products and installation together. It also offers in-home consultation for selected exterior projects.
Lowe’s operated 1,759 home-improvement stores and outlets in the United States as of January 30, 2026, alongside over 540 branch locations in the United States and Canada.
How it makes money
Lowe’s makes most of its money by selling home-improvement merchandise through its stores, branches and digital channels. A typical Lowe’s-branded store stocks approximately 37,000 items, while its online channel adds further assortment. The company sells both national brands and private brands, and tailors in-store assortments to local markets and to Pro and do-it-yourself demand.
The retail model combines product sales with fulfillment and service. Online shoppers can choose store pickup, curbside collection, same-day delivery through a gig network, or shipment to homes and businesses. Pro sales managers work at customers’ businesses and jobsites, using stores and distribution facilities to supply projects. Larger Pro customers are served by branch locations that distribute building materials and provide design and installation services.
Installation is another source of sales. Lowe’s sells projects in categories including Kitchens & Bath, Flooring, Appliances, Millwork and Rough Plumbing, while independent contractors perform many installations. It also sells extended protection plans in a range of product categories; those plans add coverage and repair services beyond manufacturers’ warranties.
Pricing reflects a mix of value-oriented private brands and national power brands. The company also receives vendor funds associated with purchase volumes, early payments and vendor promotions; most are recorded as reductions to inventory cost and then cost of sales when the related merchandise is sold.
Fiscal 2025 net sales were $86.3 billion; second-quarter 2026 sales were $26 billion.
Customers and how it sells
Lowe’s customers fall into two broad groups: individual homeowners and renters, and professional customers. Homeowners and renters use the company for projects ranging from do-it-yourself work to do-it-for-me projects that include installation. Its Pro focus has historically been small and medium-sized customers—tradespeople, repair and remodelers, and property managers—but FBM and ADG expand its reach to larger residential and commercial customers.
The retail store base is in the United States: 1,759 stores and outlets represented approximately 196 million square feet of retail selling space as of January 30, 2026. Its more than 540 branches operate across the United States and Canada. Lowe’s also has support offices in India and China.
Customers can shop in-store, online, on-site, through branches or contact centers. The company seeks to connect these channels through a single view of the customer, allowing orders and service to move between channels. Digital customers can use delivery, pickup and curbside fulfillment options, while Pro sales managers visit businesses and jobsites.
The MyLowe’s Rewards loyalty program serves both Pro and do-it-yourself customers. Management said on the call that the program had 30,000,000 members in Q2 FY2026, and that members shop more frequently and spend more per visit than non-members.
Suppliers and costs
Lowe’s sources merchandise from vendors worldwide and believes alternative, competitive suppliers are available for virtually all of its products. It buys directly from manufacturers where possible to create customer savings and improve gross margin. The company has strategic relationships with selected suppliers of national brands, including some exclusive arrangements, and supplier relationships supporting private-brand products.
China and Mexico are its principal import sources. Tariffs, customs actions and other trade-policy changes can raise the cost of imported merchandise, including private-brand and national-brand goods. The company also identifies fuel, freight, labor, shipping capacity, port conditions and vendor financial health as factors that can affect product availability and cost.
Lowe’s owns and operates more than 120 supply-chain facilities, including regional, flatbed, import and bulk distribution centers, cross-dock terminals and fulfillment centers. These facilities replenish stores and support delivery. Management said on the call that elevated fuel and transportation costs largely offset the second-quarter tariff-refund benefit, and it expects fuel and transportation costs to be more elevated in the second half as newer cost layers flow through.
- Revenue$86.3B
- Cost of revenue−$57.4B
- Selling, general and administrative−$16.8B
- Other operating costs−$1.9B
- Operating income$10.2B
Competitive position
Lowe’s competes in home-improvement retail with national and regional warehouse chains, lumber yards, hardware and specialist supply retailers, paint stores, garden centers, general-merchandise retailers, warehouse clubs, online retailers, equipment-rental providers, installers and wholesalers. The Home Depot is named as a home-improvement retailer. Competition centers on store and branch location, assortment, pricing, in-stock levels, fulfillment, delivery speed and options, customer service, and technology.
Management said on the call that competitors were aggressive on pricing in seasonal categories during July, including grills, patio and live goods. It said Lowe’s did not match promotions it considered outside its financial plan or financially imprudent.
Our reading: The store base, branch network and more than 120 supply-chain facilities are a meaningful distribution moat because they support store pickup, delivery, jobsite service and large-Pro distribution across the United States and Canada. [item1]
Our reading: Lowe’s has a meaningful Pro-positioning moat from its specialized sales support, branch capabilities and the FBM and ADG additions, but the company is still exposed to competing retailers, distributors and service providers that can match assortment, price or fulfillment. [item1; item1a]
Our reading: Loyalty, digital tools and Milo can support customer retention and conversion, but they are a developing moat because omnichannel rivals are also investing in technology, personalization and delivery. [item1a; call_prepared]
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| The Home Depot, Inc. | U.S. home-improvement retail | Medium |
Growth opportunities
Lowe’s growth plan is organized around five Total Home priorities: increasing Pro penetration, accelerating online sales, expanding home services, building a loyalty ecosystem and increasing space productivity. The company is expanding Pro assortment, delivery capabilities, extended-aisle inventory and interior-solutions capabilities. It uses FBM and ADG to serve larger Pros in residential and commercial construction.
The company sizes the new-home and multifamily-construction market that it historically did not serve at roughly $250.0 billion. Management said on the call that the company estimates roughly 12,000,000 new homes will be needed by 2033. It also said FBM and ADG position Lowe’s to gain share with larger Pro customers over the long term, although both face pressure from softer residential construction.
Digital growth includes online assortment, simplified customer journeys, visualization tools, fulfillment options and an online marketplace. Management said on the call that online sales grew 15.7% in the second quarter. It also said Milo has supported more than 25 million questions from customers and associates since launch, and online customers using it convert at three times the rate of those who do not.
Home services target replacement and other larger do-it-for-me projects. Loyalty is another growth initiative: MyLowe’s Rewards is being built for Pro and do-it-yourself customers, while HomeCare+ is a subscription service for routine home-maintenance tasks available to program members. The company is also tailoring assortments locally and expanding workwear and pet offerings as part of space productivity.
- $96.3BFY2022
- $97.1BFY2023
- $86.4BFY2024
- $83.7BFY2025
- $86.3BFY2026
Structural risks
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Customer demand can change with economic, social, style and demographic trends. Lowe’s identifies home prices, disposable income, housing turnover and residential and commercial construction as important demand indicators, and management said on the call that discretionary do-it-yourself demand remains under pressure.
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The company faces substantial price, assortment, technology and delivery competition. Customers can comparison shop online in real time, while rivals may use more effective technology, lower-cost methods, faster delivery or different promotional pricing to take sales and market share.
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Supply-chain disruptions, tariffs and trade-policy changes can affect product flow, availability, customer demand and costs. China and Mexico are principal import sources, while shipping delays, port conditions, labor shortages, fuel and third-party delivery providers are additional exposures.
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Lowe’s must execute large, complex omnichannel, technology and supply-chain initiatives. System failures, implementation delays, data losses, cyber events, vendor failures or unsuccessful investments can disrupt operations and reduce the benefits expected from these programs.
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Labor availability and costs are material operating issues. The company competes for retail, technology and support talent, faces wage and benefit pressure, and depends on associates with product knowledge and expanding digital skills.
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FBM and ADG are exposed to residential-construction conditions. Management said on the call that ADG is 100% exposed to residential construction and FBM is about 45% exposed, with continued pressure expected to affect both businesses’ top and bottom lines.
Bottom line
Our reading
Our reading: Lowe’s is a large home-improvement retailer whose operating model combines merchandise sales with omnichannel fulfillment, installation services and a growing branch business for larger professionals. Its strategy depends on improving Pro penetration, digital conversion, loyalty and home services while sustaining a broad store and supply-chain network. [item1; call_prepared]
Our reading: Near-term exposure is concentrated in cautious discretionary DIY demand, residential-construction pressure at FBM and ADG, tariffs, freight and price competition, while the company continues to invest in its Total Home initiatives. [item1a; call_prepared; call_qa]