Lowe Companies , Inc . ( NYSE : LOW ) Q4 2026 Earnings Call Transcript

insidermonkey.com · Feb 26, 2026 · Collected from GDELT

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Lowe’s Companies, Inc. (NYSE:LOW) Q4 2026 Earnings Call Transcript February 25, 2026Lowe’s Companies, Inc. beats earnings expectations. Reported EPS is $1.98, expectations were $1.94.Operator: Good morning, everyone, and welcome to Lowe’s Companies Fourth Quarter 2025 Earnings Conference Call. My name is Rob, and I’ll be your operator for today’s call. As a reminder, this conference is being recorded. I’ll now turn the call over to Kate Pearlman, Vice President of Investor Relations and Treasurer.Kate Pearlman: Thank you, and good morning. Here with me today are Marvin Ellison, Chairman and Chief Executive Officer; Bill Boltz, our Executive Vice President, Merchandising; Joe McFarland, our Executive Vice President, Stores; and Brandon Sink, our Executive Vice President and Chief Financial Officer. I would like to remind you that our notice regarding forward-looking statements is included in our press release this morning, which can be found on Lowe’s Investor Relations website. During this call, we will be making comments that are forward-looking, including our expectations for fiscal 2026. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the risk factors, MD&A and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we’ll be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found in the quarterly earnings section of our Investor Relations website. Before turning the call over to Marvin, I’d like to ask that you please hold December 9 for 2026 Analyst and Investor Conference, which will take place in New York City. Now I’ll turn the call over to Marvin.Marvin Ellison: Thank you, Kate. Good morning, everyone, and thank you for joining us today. In the fourth quarter, sales were $20.6 billion and comparable sales increased 1.3%. For fiscal year 2025, we delivered sales of $86.3 billion, positive comparable sales of 0.2% and adjusted operating margin of 12.1%. This led to adjusted earnings per share of $12.28, a 2% increase over last year. Despite a challenging industry backdrop, our relentless focus on expense management allowed us to hold adjusted operating margins flat to the prior year when excluding the impact of our recent acquisitions. While our outperformance in the fourth quarter demonstrates our team’s disciplined execution, our outlook for 2026 remains cautious given the persistent volatility in housing macro. This uncertainty continues to pressure big-ticket discretionary DIY projects as many consumers are reluctant to make significant investments in their homes. Within this challenging macro environment, it is imperative to remain focused on our perpetual productivity improvement or PPI initiatives. This commitment to PPI is at the center of the announcement we made recently to eliminate approximately 600 corporate and support roles. Although these are difficult decisions to make, this workforce reduction will help us create greater financial agility within our dynamic industry while continuing to invest in customer-facing areas of the company. We will continue to manage what is within our control, which is reflected in the strength we delivered across Pro, online and home services as our total home strategic initiatives are resonating with our small to medium Pro and DIY customers alike. Starting with our Pro results, we delivered another quarter of growth as we continue to gain traction with our transformed offering. Our Pro customers are responding to our compelling brand and product assortment, investments in inventory, job site delivery, enhanced service levels and a tailored digital experience, and we’re further enhancing our Pro brand offering by extending our assortment of the #1 power tool brand, DEWALT, the tool of choice for Pros for over 100 years. We are excited that we now carry the largest selection of the walk power tools and accessories in our stores and online. Moving to online. We delivered a 10.5% growth this quarter and set new sales records this holiday season on both Black Friday and Cyber Monday. Both DIY and Pro customers continue to shift their shopping online as our enhanced user experience and fulfillment options offer the ease and convenience they are seeking. In fact, on Black Friday, our Lowe’s app was so popular that it was the #1 free app in the shopping category on Apple’s App Store in the U.S. This level of engagement reflects the investments we’ve made to create a seamless omnichannel shopping experience. And as customers continue to integrate AI into their shopping habits, we are collaborating with leading digital platform so that we are well positioned to participate in Agentic commerce. Now turning to home services, where we delivered high single-digit growth. This is another example of a customer experience that we have overhauled at Lowe’s by removing the friction for what was a time-consuming process through digital tools and enhanced service to create an intuitive installation solution for our do-it-for-me customers. Let me now shift to our view of the broader macro environment. Consumer confidence remains subdued given inflationary pressures and overall economic uncertainty. And despite modest relief in short-term interest rates and market expectation for additional Fed cuts, mortgage rates remain elevated. As a result, a persistent lock-in effect remains in place keeping housing turnover and new home stars under pressure, leading us to expect improvement in both the housing and home improvement markets to be gradual. That said, the structural demand drivers of the home improvement industry remain strong with home equity setting new record levels and homes continuing to age, averaging 44 years old. With the chronic supply-demand imbalance in housing, analysts continue to expect that approximately 16 million new homes will be needed in the United States over the next decade. Despite near-term industry headwinds, we’re pleased that our investments in our total home strategy and operational excellence are paying dividends. Our compelling product assortments, flexible fulfillment options, innovative installation solutions, and best-in-class digital experiences are appealing to both the value-conscious homeowner and the busy pro. We’re confident that these investments position the company to outperform the market, regardless of macro conditions. With the recent acquisitions of Foundation Building Materials, or FBM, and Artisan Design Group, or ADG, we are well-positioned to participate in the expected recovery in housing. As we start the year with these two companies, our integration efforts are on track, and we’re focused on capturing cost synergies by leveraging our combined scale. We’re also developing solutions to support cross-selling opportunities that will enhance our offering to our respective pro customers by capitalizing on complementary product offerings. While FBM and ADG are navigating a challenging residential construction market, we expect them to build on their leadership position this year, leveraging their reputation for exceptional customer service while maintaining operational discipline. In addition, we’re pleased with FBM’s commercial business, which represents roughly half of its revenue, as they continue to win new data center contracts, which reflects the benefits of a diverse customer base. Before I close, I want to take a moment to recognize our frontline associates who continue to show up every day with a strong sense of ownership and commitment to serving our customers and communities. As a demonstration of our appreciation for their efforts, we awarded a discretionary bonus of $125 million to our dedicated frontline associates for their outstanding performance in the fourth quarter. This includes our assistant store managers, department supervisors, and hourly associates in our stores and distribution centers. It’s an honor for me to continue to support these hardworking men and women. Our dedicated frontline associates are the primary reason Lowe’s was recently recognized as Fortune’s #1 most admired specialty retailer. This honor truly belongs to them. I’d like to congratulate our team for delivering another year of outstanding customer service. With that, I’ll turn it over to Bill.William Boltz: Thanks, Marvin. Good morning. We’re pleased with our sales performance this quarter as we delivered positive comps in 9 of our 14 merchandising divisions. Our teams remain focused on offering value and innovation to consumers who continue to be mindful about their home improvement spending. This holiday season, we helped our customers celebrate with exciting offers and deals on appliances, tools, Trim-A-Tree, and more, making Lowe’s a popular destination for holiday shoppers, both in-store and online. Starting with building Products. We delivered broad-based growth, driven by solid performance in both Pro and home services. Rough plumbing was a standout, with continued strength in water heaters, water treatment, and HVAC, along with strength in other Pro-focused areas within our plumbing assortments. This includes a new merchandising display for SharkBite PEX pipe and fittings. It showcases straight pipes stacked upright, which Pros prefer over coiled Product, as it makes it easier for them to use on the job site. We delivered positive comps in millwork with strong performance, especially in windows and doors, supported by leading brands such as Pella, Therma-Tru, and LARSON, which are exclusive to Lowe’s in the Home Center channel. Our convenient installation solutions, combined with our affordable credit offers, are helping customers manage these larger replacement projects. Turning to home decor, where we delivered positive comps across kitchens and bath, paint, and in appliances, where we continue to build on our market leadership pos