Lowe's Q4 Earnings Beat on Pro Strength and Holiday Performance

Lowe’s Companies, Inc. LOW posted fourth-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. The Mooresville, NC-based home improvement retailer posted another quarter of positive comparable sales, supported by continued strength in Pro, online and home services, along with solid holiday demand.

Management highlighted that its Total Home strategy continues to resonate with both Pro and DIY customers, even as the broader housing backdrop remains pressured. The company also introduced its fiscal 2026 outlook, signaling confidence in its ability to gain market share through productivity initiatives and strategic investments.

LOW’s Quarterly Performance: Key Metrics & Insights

Lowe’s posted adjusted earnings of $1.98 per share, which beat the Zacks Consensus Estimate of $1.95 and increased 2.6% from the prior-year adjusted earnings of $1.93. On a reported basis, including $149 million in pre-tax expenses related to the acquisitions of Foundation Building Materials and Artisan Design Group, earnings were $1.78 per share compared with $1.99 in the prior-year period.

Net sales reached $20,584 million, surpassing the Zacks Consensus Estimate of $20,365 million and marking a significant increase from $18,553 million reported in the fourth quarter of fiscal 2024. This growth was underpinned by a 1.3% rise in comparable sales that fared far better than our estimate of 0.2% increase.

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

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

LOW’s Margin & Cost Details

The gross margin for the quarter was 32.5%, a contraction of 40 basis points from 32.9% in the year-ago period. Adjusted gross margin came in at 32.7%, in line with our estimate. 

SG&A expenses rose to 21.4% of sales, up from 20.6% last year, reflecting the impact of acquisition-related costs and associate bonuses. Adjusted SG&A expenses, as a percentage of sales, came in at 21.4%, slightly better than our projection of 21.5%.

As a result, operating income for the quarter was $1,708 million, down from $1,830 million in the prior-year quarter. The operating margin settled at 8.3% compared with 9.9% in the fourth quarter of 2024. LOW reported an adjusted operating margin of 9% that came in line with our estimate.

LOW’s Financial Health Snapshot

This Zacks Rank #4 (Sell) company ended the quarter with cash and cash equivalents of $982 million, long-term debt (excluding current maturities) of $37,490 million and a shareholders’ deficit of $9,917 million.

For fiscal 2025, net cash provided by operating activities totaled $9,864 million, up from $9,625 million in fiscal 2024. During the fourth quarter, the company paid $673 million in dividends, bringing the total returned to shareholders through dividends for the fiscal year to $2.6 billion. As of Jan. 30, 2026, Lowe's operated 1,759 stores with approximately 196 million square feet of retail selling space.

A Sneak Peek Into LOW’s FY26 Outlook

Lowe’s anticipates fiscal 2026 total sales between $92 billion and $94 billion, representing an increase of 7% to 9%. Comparable sales are expected to range from flat to up 2%. The company projects an adjusted operating margin of 11.6% to 11.8%, excluding roughly 40 basis points related to intangible asset amortization.    

Management foresees adjusted earnings in the band of $12.25-$12.75 per share. Net interest expense is forecasted at approximately $1.6 billion, with capital expenditures projected to be roughly 2.5 billion.

Lowe’s Stock Price Performance

Shares of Lowe’s have advanced 15.5% year to date compared with the industry’s rise of 10.4%.

Stocks Looking Red Hot

Deckers Outdoor Corporation DECK, a global leader in designing, marketing, and distributing innovative footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). DECK has a trailing four-quarter earnings surprise of 36.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS calls for growth of 8.9% and 8.5%, respectively, from the year-ago reported numbers.

Boot Barn Holdings, Inc. BOOT, the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories, currently carries a Zacks Rank #2 (Buy). BOOT has a trailing four-quarter earnings surprise of 4.9%, on average.

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS implies growth of 17.6% and 26%, respectively, from the year-ago reported numbers.

Dollar General Corporation DG, a discount retailer, currently carries a Zacks Rank #2. DG has a trailing four-quarter earnings surprise of 22.9%, on average. 

The Zacks Consensus Estimate for Dollar General’s current financial-year sales and EPS suggests growth of 4.8% and 9.8%, respectively, from the year-ago reported numbers.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research