Q2 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $26 billion | Up 8.3% versus prior year |
| Comparable Sales | 0.2% | Increase |
| Adjusted Diluted EPS | $4.40 | Not stated |
| Gross Margin | 33% | Down 80 basis points versus prior year |
| Online Sales Growth | 15.7% | Not stated |
| Free Cash Flow | $3.1 billion | Not stated |
Guidance and outlook
- Full year sales of approximately $92 billion
- Full year comparable sales roughly flat
- Full year adjusted operating margin of approximately 11.6%
- Full year adjusted diluted earnings per share of approximately $12.25
- Full year capital expenditures of up to $2.5 billion
- Q3 adjusted diluted earnings per share expected to be approximately 7% below prior year adjusted diluted earnings per share
How management sounded
Balanced (+3 on our -10 to +10 scale). Management remains confident in the long-term strategy but lowered the full-year outlook to the bottom end of the previous range due to persistent DIY softness and competitive pricing. Management sounded more upbeat than on 1% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Competitive Pressures
Asked: Steven Forbes from Guggenheim asked about the heightened competitive pressures observed in July.
Answer: Marvin Ellison explained that competitors used tariff refunds to lower prices in seasonal categories, but Lowe's chose not to match these actions to maintain financial discipline.
FBM and ADG Performance
Asked: Steven Forbes from Guggenheim asked about the performance of FBM and ADG acquisitions.
Answer: Brandon Sink noted that elevated interest rates are suppressing residential construction, impacting demand for these businesses, though the commercial side remains solid.
Online Growth Drivers
Asked: Greg Melich from Evercore asked what drove the 16% online sales growth.
Answer: Marvin Ellison attributed the growth to tailored digital experiences, expanded visualization capabilities, and strong adoption of the Mylow AI agent.
Consumer Demand
Asked: Brian Nagel from Oppenheimer asked for a characterization of the underlying consumer demand.
Answer: Marvin Ellison stated the consumer remains healthy but cautious due to macro factors, and the company views the current environment as cyclical.
What to watch before the next call
- The impact of residential construction trends on the performance of FBM and ADG acquisitions.
- Whether competitive pricing actions persist or remain a transitory event in the second half.
- Macroeconomic factors influencing DIY discretionary spending and the potential for a market recovery.
