Lowe’s (LOW) Stock Drops Despite Q1 Earnings Beat as Conservative Outlook Weighs

Quick Overview

• The home improvement chain delivered Q1 adjusted EPS of $3.03, surpassing the Street’s $2.97 projection, while revenue hit $23.08B versus $22.97B expected
• Comparable store sales climbed 0.6%, driven by a robust 15.5% surge in digital sales plus solid performance in appliances, Pro segment, and home services
• The company’s full-year adjusted EPS outlook of $12.25–$12.75 centers at $12.50, falling short of Wall Street’s $12.59 target
• Shares of LOW declined approximately 2.9% despite beating quarterly expectations, as market participants zeroed in on the underwhelming forecast
• Chief Executive Marvin Ellison acknowledged the “challenging housing macro” environment while standing by the firm’s Total Home strategic initiative

The nation’s second-largest home improvement retailer delivered quarterly results that exceeded expectations across key metrics. Yet investors sent the stock lower — with attention fixed squarely on management’s conservative annual outlook.

Shares of LOW retreated roughly 2.9% following the disclosure, trading around $213 in after-hours action.

Lowe’s Companies, Inc., LOW

The Mooresville-based retailer posted adjusted diluted earnings per share of $3.03 for its fiscal quarter that concluded on May 1, outpacing analyst projections of $2.97. Total revenue reached $23.08 billion, reflecting a 10.4% year-over-year increase and exceeding the Street’s $22.97 billion forecast.

Comparable sales registered a 0.6% gain during the period. Digital channels demonstrated particular strength, surging 15.5%. The appliances category, home services division, and professional contractor business also delivered positive contributions.

On a GAAP basis, net earnings totaled $1.63 billion, translating to $2.90 per diluted share — virtually unchanged from the year-ago period’s $1.64 billion, or $2.92 per share.

The quarter incorporated $96 million in pre-tax costs associated with the company’s recent acquisitions of Foundation Building Materials and Artisan Design Group.

Annual Forecast Trails Wall Street Expectations

Investors reacted negatively to the forward-looking commentary. Management established full-year adjusted EPS guidance spanning $12.25 to $12.75 — yielding a midpoint of $12.50 that trails the analyst consensus figure of $12.59.

The company’s revenue projection for the full year of $92 billion to $94 billion likewise came in marginally under consensus estimates of $93.07 billion.

Lowe’s anticipates comparable sales will land in a range from flat to up 2% for the complete fiscal year — reflecting caution given persistent consumer uncertainty and elevated gasoline prices.

Competitor Home Depot Also Updated Outlook Recently

Notably, Home Depot released quarterly results earlier in the week and similarly exceeded projections. The larger rival maintained its existing full-year guidance and characterized its core customer base as resilient. Home Depot also disclosed it has submitted applications for tariff refunds that could partially mitigate rising fuel expenses.

In February, Lowe’s eliminated approximately 600 positions across corporate and support functions, explaining the move would enable greater investment in frontline store personnel.

Ellison’s “Total Home strategy” — designed to capture both do-it-yourself consumers and professional contractors — has served as the primary growth driver for the organization.

The professional contractor segment and online sales channels continue generating momentum, with both areas posting strength during the first quarter.

The retailer maintained its full-year revenue target of $92 billion to $94 billion, representing year-over-year growth of 7% to 9%.

On an adjusted basis, full-year earnings per share are projected to fall within the $12.25 to $12.75 range.

The first-quarter performance marked the fourth consecutive period of positive comparable sales growth for the company — a trend management aims to sustain throughout the critical spring selling season and into the latter half of the year.

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