Lowe's Q1 Earnings & Sales Beat Estimates, Comps Decline 1.7% Y/Y

Lowe’s Companies, Inc. LOW reported first-quarter fiscal 2025 results, with the top and bottom lines surpassing the Zack Consensus Estimate. However, both metrics declined year over year. The Mooresville, NC-based company posted a comparable sales decline in the quarter under review.

Despite near-term uncertainty and headwinds in the housing market, the company’s strong emphasis on exceptional customer service led to improved satisfaction levels. Continued strategic investments in technology, upgraded store environments and the dedication of front-line associates further underscore its commitment to meeting customer needs and supporting the communities it serves.

LOW’s Quarterly Performance: Key Metrics and Insights

The home improvement retailer posted quarterly earnings of $2.92 per share, which came ahead of the Zacks Consensus Estimate of $2.88. The figure marked a 4.6% decline from earnings of $3.06 per share reported in the same period last year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Net sales of $20,930 million surpassed the consensus estimate of $20,924 million but declined 2% year over year. 

Comparable sales declined 1.7%, as adverse weather conditions earlier in the quarter were partially balanced by mid-single-digit growth in Pro and online comparable sales. This performance outpaced our estimate of a 2% decline in comparable sales.

LOW’s Margin & Cost Details

The gross profit decreased 1.5% year over year to $6.99 billion, while the gross margin expanded 20 basis points to 33.4%. We had expected the gross margin to be 33.2% in the quarter under review.

Selling, general and administrative expenses totaled $4.05 billion, up 0.9% year over year. As a percentage of net sales, this metric increased 50 basis points year over year to 19.3%.

The operating income decreased 6% to $2.49 billion, while the operating margin decreased 50 basis points to 11.9%. We had envisioned a 60-basis-point decrease in the operating margin.

LOW’s Financial Health Snapshot

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $3.05 billion, long-term debt (excluding current maturities) of $30.5 billion and shareholders’ deficit of $13.3 billion.

In the first three months of fiscal 2025, Lowe’s generated cash flow from operations of $3.38 billion. The company continues to prioritize sustainable shareholder value through a disciplined capital allocation strategy, demonstrated by a dividend payment of $645 million this quarter.

As of May 2, 2025, Lowe's operated 1,750 stores, encompassing a total of 195.3 million square feet of retail selling space.

LOW Stock Past Three-Month Performance

A Sneak Peek Into LOW’s FY25 Outlook

Management anticipates total sales to be between $83.5 billion and $84.5 billion compared with $83.7 billion reported in fiscal 2024. Comparable sales are expected to be flat to up 1%.  Operating margin is projected between 12.3% and 12.4%. 

Lowe’s foresees earnings per share to be in the band of $12.15-$12.40. It anticipates capital expenditures of approximately $2.5 billion for fiscal 2025.

Lowe’s Stock Price Performance

Shares of Lowe’s have lost 2.5% in the past three months compared with the industry’s decline of 3.1%.

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

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