LOW · Q1 2026 Earnings
CautiousLowe's
Reported May 20, 2026
30-second summary
Lowe's delivered a +0.6% comp and 10.3% revenue growth to $23.1B in Q1, almost entirely driven by the Foundation Building Materials and ADG acquisitions rather than underlying demand — DIY remains under the worst pressure since the financial crisis, per management. The FY2026 outlook was affirmed unchanged (revenue $92–94B, adjusted EPS $12.25–12.75, comps flat to +2%), but management explicitly guided Q2 adjusted EPS to be ~2% below prior year, citing acquisition dilution, transport costs, and oil-linked commodity inflation. This is a market-share-gain story in a flat market, not a re-acceleration story.
Headline numbers
EPS
Q1 FY2026
$3.03
Revenue
Q1 FY2026
$23.08B
+10.3% YoY
Gross margin
Q1 FY2026
32.7%
Free cash flow
Q1 FY2026
$2.83B
Operating margin
Q1 FY2026
11.1%
Key financials
Q1 FY2026| Metric | Q1 FY2026 | YoY |
|---|---|---|
| Revenue | $23.08B | +10.3% |
| EPS | $3.03 | — |
| Gross margin | 32.7% | — |
| Operating margin | 11.1% | — |
| Free cash flow | $2.83B | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Platform metrics
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Comparable Sales Growth | 0.6% |
| Total Stores | 1,759 |
| Retail Selling Space | 196.0 million sq ft |
Profitability
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Operating Margin | 11.07% |
| Net Earnings | $1.628 billion |
Other KPIs
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Dividends Paid | $674 million |
| Dividend Per Share | $1.20 |
Management tone
The dominant shift is from growth-when-housing-normalizes to growth-regardless-of-housing. CEO commentary explicitly recalibrated the bull case: "while we expect the broader market to remain flat in 2026, our focus remains on disciplined execution of our total home strategy, driving continued growth regardless of market conditions." Management is no longer underwriting macro recovery as a prerequisite — the new posture is share gains in a flat market, with macro upside as optionality rather than baseline. This is more defensive than typical Lowe's commentary.
DIY framing has hardened from cyclical to structural. Management characterized the DIY consumer as facing "most economic pressure since the financial crisis" — language that did not appear in earlier quarters at this intensity. The strategic response — pro, online, services, loyalty — is no longer described as adjacencies but as the primary growth engine while DIY waits out the cycle.
AI moved from concept to quantified lever. "The conversion rate for online customers who use Milo is triple that of customers who do not use the tool." A 3x conversion lift is the kind of disclosure management does not put on a transcript unless the data is durable; it elevates AI from R&D narrative to a defensible component of the +15.5% online growth.
Margin tone is unusually precise about near-term pain. Management volunteered Q2 adjusted EPS would be ~2% below prior year, citing acquisition dilution, transport costs, and oil-linked commodity inflation. The phrase "actively working to offset through productivity initiatives in the back half" positions H2 recovery as the load-bearing assumption for the FY guide — a notable risk if those offsets slip.
Acquisitions have shifted from optionality to active synergy extraction. FBM and ADG are now framed as on-track integrations producing near-term dilution with explicit H2 anniversary relief. The willingness to quantify pressure suggests confidence in the timing of the offset.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Christopher Horvers · J.P. Morgan
Weather impact on Q1 comps and potential deferral of spring demand from Q1 to Q2, particularly given regional weather variations and exposure to northern tier.
February impacted by winter storms with 30bps drag; March/April saw normal spring temperatures. April relatively in line with expectations. Q2 expected to benefit from Memorial Day, Father's Day, July 4th events, and tax refund tailwinds of ~$50B still to be distributed over 3-4 months.
Simeon Gutman · Morgan Stanley
Why are transactions still below 2019 levels despite high repair/maintenance demand and aging housing stock; exploration of sector growth potential without faster home turnover.
DIY customer facing most economic pressure since financial crisis; delivered 4 consecutive positive comps despite this headwind. Business structured to win in any environment. Positioned well for long-term gains once market normalizes. Focus on services, pro, online driving continued performance.
Simeon Gutman · Morgan Stanley
Cost environment deterioration since guidance; amount of cushion/flexibility to manage margins or need to pivot on PPI strategy.
Macro introduced new risks; immediate impact from oil prices pressuring fuel and commodity products (resin, plastics). Q1 impact manageable, Q2 showing pressure. Working with vendors on contract adjustments. Evaluating PPI portfolio for offsets. Team has managed 3 inflationary cycles successfully.
Seth Sigmund · Barclays
Moderation in ticket growth drivers; clarification on pricing environment and tariff cycle progression.
Q1 ticket contraction due to seasonal mix (lawn/garden) not slowdown in larger projects. Big ticket still positive 2%+ driven by appliances, pro, services. Managing tariff environment with IEPA ruling, Section 122/232 actions, country-of-origin diversification. Proven ability to manage tariff cycle.
David Bellinger · Mizuho
Confirmation of Q2 guidance pace (~1% same-store sales); any changes in consumer spending patterns by income cohort in early Q2.
Operating in K-shaped economy with higher-income consumers spending on innovation/modernization while lower-income more cautious. No changes in consumer behavior observed at start of Q2 versus Q1. Best-executing retailer, merchant value strong. Built business to perform in any environment.
What to watch into next quarter
Q2 adjusted EPS vs. the ~2% YoY decline pre-announcement — a deeper decline would call FY $12.25–12.75 into question, since H2 must already accelerate to offset H1.
Comparable sales pace — management guided Q2 comps to ~midpoint of FY flat-to-+2%, implying ~+1%. A print below +0.5% with no weather alibi would signal the affirmed FY guide is at risk.
Gross margin trajectory — watch whether FBM/ADG dilution narrows sequentially as integration synergies land, vs. widening from oil-linked commodity costs. Q1 GM was 32.68%; sustained compression below 32% would be a warning.
Online sales growth and Milo adoption metrics — does +15.5% online growth hold, and does management quantify Milo's conversion lift again? The 3x conversion figure becomes a tracked KPI if it repeats.
Pro vs. DIY comp spread — management is leaning hard on pro; widening underperformance in DIY-heavy categories (lawn/garden, paint) without pro offset would test the total-home-strategy thesis.
Sources
- Lowe's Q1 FY2026 press release (Exhibit 99.1), SEC filing, 2026-05-20 — https://www.sec.gov/Archives/edgar/data/60667/000006066726000062/exhibit991-05012026.htm
- Lowe's Q1 FY2026 earnings call transcript and prepared remarks (referenced via extraction)
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