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Lowe’s reported Q2 FY2027 revenue of $26.0 billion, up 8.34% from $24.0 billion a year earlier, while revenue as the consensus counts it was $26.0 billion versus the consensus of $26.1 billion. The company’s adjusted EPS, as the consensus counts it, was $4.40, above the $4.22 consensus estimate; GAAP diluted EPS was $4.27, unchanged from a year earlier.
The filing said comparable sales increased 0.2%, as a 2.3% increase in comparable average ticket was partly offset by a 2.1% decline in comparable customer transactions. Lowe’s said nine of its 13 product categories posted positive comparable sales, led by Rough Plumbing, Electrical, and Tools & Hardware, with Pro and online-channel momentum contributing. The company reported online sales growth of 15.7%.
The filing showed gross margin of 33.0%, down −0.8 percentage points from 33.8%, and operating margin of 13.7%, down −0.8 percentage points from 14.5%. Lowe’s attributed the gross-margin decline primarily to the operational cost structure of 2025 acquisitions and increased fuel costs, partly offset by credit revenue and tariff refunds. The company generated $3.1 billion in free cash flow, compared with $3.7 billion a year earlier.
| Q2 FY2027 | Q2 FY2026 | Change | |
|---|---|---|---|
| Revenue | $26.0 billion | $24.0 billion | 8.34% |
| Diluted EPS | $4.27 | $4.27 | 0.00% |
| Gross margin | 33.0% | 33.8% | −0.8 percentage points |
| Operating margin | 13.7% | 14.5% | −0.8 percentage points |
| Free cash flow | $3.1 billion | $3.7 billion | −16.6% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $4.40 | $4.22 | Beat by 4.27% |
| Revenue | $26.0 billion | $26.1 billion | Missed by 0.68% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Marvin Ellison, chairman and chief executive officer, said elevated fuel prices and broader economic uncertainty had influenced household budgets, and customers were cautious about when and where to invest in their homes. He said discretionary DIY demand remained under pressure, while Pro, online and home-services activity helped offset softer DIY discretionary spending and weather around Memorial Day weekend.
Ellison said competitors became more aggressive on pricing in July, particularly in seasonal categories, and linked that activity to tariff refunds. When analysts asked whether that environment represented a lasting change, Ellison said Lowe’s viewed it as transitory and did not match promotions that were outside its financial plan or that it did not consider financially prudent. Brandon Sink, executive vice president and chief financial officer, said the company had observed increased customer take rates during promotional periods and was using member offers, store events and fulfillment initiatives in the second half.
Sink said second-quarter gross margin included an approximately $80 million tariff-refund benefit, which was largely offset by elevated fuel and transportation costs. He said Lowe’s expects fuel and transportation pressure to be more elevated in the second half as newer cost layers flow through, while the outlook does not include potential additional tariff refunds because the timing is uncertain. Sink said any further refunds would be considered for customer-facing actions, but he did not quantify future refund amounts or their use.
On investment and residential construction, Ellison said the company was integrating Foundation Building Materials and Artisan Design Group to build solutions for customers and pursue larger Pro business over the long term. Sink told analysts that ADG is fully exposed to residential construction and FBM has about 45% exposure; the company’s outlook assumes pressure in that end market continues through the second half and affects both businesses’ top and bottom lines. He said Lowe’s expects continued momentum in Pro, online, loyalty and home services, while third-quarter comparable sales are expected to align with the full-year outlook.
Guidance
Lowe’s updated its FY2026 outlook from sales of $92.0 billion to $94.0 billion to approximately $92.0 billion, and from comparable sales ranging from 0.00% to 2.00% to roughly flat. The company changed its adjusted operating-margin outlook from 11.6% to 11.8% to approximately 11.6%, and its adjusted diluted EPS outlook from $12.25 to $12.75 to approximately $12.25. Lowe’s also changed its GAAP diluted EPS outlook from $11.75 to $12.25 to approximately $11.75. The company continues to expect capital expenditures of up to $2.5 billion.