Lowe's Tops Profit Estimates, Affirms Full-Year Outlook

Lowe's (LOW) shares rose in premarket trading after reporting Q1 earnings of $2.92 per share, exceeding analysts' estimates of $2.86, while net sales declined 2% year-over-year to $20.93 billion, matching expectations. Comparable store sales decreased 1.7%, better than the projected 2.21% decline, driven by growth in Pro and online sales, and the company affirmed its full-year outlook, anticipating sales of $83.5 billion to $84.5 billion and EPS of $12.15 to $12.40.

Analysis

Lowe's (LOW) reported first-quarter earnings per share of $2.92, surpassing analyst estimates of $2.86, despite a 2% year-over-year decline in net sales to $20.93 billion, which aligned with expectations. A key positive was the comparable store sales decrease of only 1.7%, notably better than the projected 2.21% decline, attributed to mid-single-digit growth in Pro and online sales which partially offset the impact of unfavorable weather early in the quarter. The company reaffirmed its full-year 2025 outlook, projecting sales between $83.5 billion and $84.5 billion, comparable sales flat to up 1%, and GAAP EPS of $12.15 to $12.40; these figures were previously noted as slightly below analyst consensus at the time of their initial release. CEO Marvin Ellison characterized the quarter as positive amidst "near-term uncertainty and housing market headwinds." This performance contrasts with rival Home Depot (HD), which recently reported a slightly worse-than-expected 0.3% fall in comparable store sales and saw its shares decline 0.6% on the day of its report. Lowe's shares reacted positively to its earnings, advancing 2% in premarket trading, though they entered the trading day down approximately 6% for the year, indicating a potential inflection point if positive trends continue.

Key Decisions for Investors

• Investors should consider Lowe's demonstrated ability to outperform comparable sales expectations in Q1, driven by Pro and online strength, as a sign of resilience against ongoing housing market headwinds and unfavorable weather impacts.
• Monitor subsequent quarters closely to assess whether Lowe's can sustain its Pro and online sales momentum to meet its affirmed full-year guidance, which was initially perceived as conservative by analysts.
• Evaluate Lowe's current valuation and risk profile, factoring in the Q1 earnings beat and better-than-expected comparable sales against its year-to-date share price decline of approximately 6% and broader sector challenges, including potential tariff impacts mentioned in relation to competitor Home Depot.