Lowe's Q2 2025 Earnings Preview: Is LOW Ready to Surprise the Street?

As Lowe's Companies, Inc. LOW prepares to unveil its second-quarter fiscal 2025 earnings on Aug. 20, before the opening bell, investors are eager to see if the company can beat market expectations. 

The Zacks Consensus Estimate for revenues stands at $24.02 billion, implying 1.9% growth from the prior year. Meanwhile, the consensus mark for earnings has slipped by a penny over the past seven days to $4.24 per share but still suggests a 3.4% increase from the year-ago period.

LOW has a trailing four-quarter earnings surprise of 3.2%, on average. In the last reported quarter, this Mooresville, NC-based company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 1.4%.

Key Factors to Observe for LOW's Q2 Earnings

Lowe’s second-quarter results are likely to benefit from product innovation, MyLowe’s Rewards program, digital expansion and resilient Pro demand. After delivering healthy Pro comparable sales growth in the first quarter despite a sluggish housing market, Lowe’s has now expanded its reach to larger professional customers through its acquisition of Artisan Design Group. The move expands Lowe’s reach in the design, distribution and installation space for new home construction and large-scale renovation projects. We expect total comparable sales growth of 1.5% for the second quarter.

Digital growth is another key factor contributing to Lowe’s performance. Online sales momentum from the first quarter, driven by both higher traffic and conversion rates, is likely to continue benefiting from the company’s home improvement marketplace, powered by Mirakl. By enabling third-party sellers to expand Lowe’s assortment without additional inventory or fulfillment center investment, the marketplace offers scalable growth potential and appeals to both Pro and DIY shoppers.

The rollout of Mylow, the AI-powered virtual home improvement advisor, along with Mylow Companion for associates, enhances the customer experience and sales process. By offering project guidance and product recommendations both online and in-store, these tools improve conversion rates and encourage repeat visits. 

Category strength and product innovation remain core growth drivers. Solid in-stock positions and new offerings in Building Materials, Rough Plumbing and Appliances might have helped Lowe’s capture market share, especially if consumers prioritize functional upgrades or time-sensitive replacements over discretionary remodeling. The appliance category, in particular, remains resilient, even as other big-ticket DIY categories lag, supported by Lowe’s wide brand assortment and rapid delivery capabilities.

Well, the ongoing weakness in DIY big-ticket discretionary categories such as flooring, kitchens and baths remains a concern, as higher mortgage rates and affordability challenges limit consumers’ willingness to undertake major renovations. Rising wage and healthcare costs might have also pressured SG&A expenses. Additionally, while Lowe’s has diversified its sourcing, a notable share of its purchases still comes from China, leaving it exposed to potential tariff impacts.

Lowe's Companies, Inc. Price, Consensus and EPS Surprise

Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote

What the Zacks Model Says About LOW’s Q2 Earnings

As investors prepare for Lowe’s second-quarter announcement, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Lowe’s this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lowe’s has a Zacks Rank #3 but an Earnings ESP of -0.56%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +4.73% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter fiscal 2025 earnings per share is pegged at 91 cents, implying a 16.7% year-over-year decline. 

Ollie's Bargain’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $657.8 billion, which indicates an increase of 13.7% from the figure reported in the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 2%, on average.

Five Below, Inc. FIVE has an Earnings ESP of +10.92% and currently carries a Zacks Rank of 3. FIVE’s top line is anticipated to advance year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $993.9 million, which suggests a 19.7% rise from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Five Below’s second-quarter earnings is pinned at 60 cents a share, up 11.1% from the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 42.3%, on average.

Burlington Stores, Inc. BURL has an Earnings ESP of +8.55% and currently carries a Zacks Rank of 3. BURL’s top line is expected to advance year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.64 billion, which suggests a 7% jump from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Five Below’s second-quarter earnings stands at $1.25 per share, calling for 4.2% growth from the year-ago quarter. BURL has a trailing four-quarter earnings surprise of 12%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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