- Lowe’s beat analyst expectations with Q1 adjusted EPS of $2.92, despite a 2% revenue decline year over year to $20.93 billion.
- Same-store sales fell 1.7%, better than anticipated, as digital and Pro contractor channels delivered mid-single-digit growth.
- Early quarter weather hurt store traffic, but online sales and professional segments helped offset in-store softness.
- Shares rose nearly 3% pre-market on optimism after a challenging year; Home Depot also reported industry-wide pressures.
- Tariff relief remains partial—costs on Chinese imports are down but still higher than pre-pandemic levels, with Lowe’s more exposed than rivals.
- Guidance for 2025 points to stable or modest growth, reflecting cautious optimism amid continued housing market uncertainty.
Lowe’s (Lowe’s) reached for resilience this spring, swinging back against a swirl of economic headwinds and posting quarterly earnings that outpaced Wall Street’s modest hopes. After years of pandemic-fueled turbulence, the home improvement titan unveiled numbers on Wednesday morning that sent investors scrambling for optimism—and for good reason.
Picture managers unlocking doors before dawn at hundreds of stores nationwide, aisles polished, displays reset, and a cautious sense of possibility humming beneath the fluorescent lights. That energy pulsed through Lowe’s latest report:
- Revenue: $20.93 billion, sliding 2% year over year—but right in line with forecasts.
- Adjusted Earnings Per Share: $2.92, beating the $2.88 estimate despite a 4.6% drop from last year.
- Same-store Sales: Down 1.7%, better than the anticipated 2.04% dip—and a notable improvement after the recent return to growth.
The earnings snapshot tells a story of grit and adaptation. CEO Marvin Ellison credited “near-term uncertainty and housing market headwinds”—the kind that have blunted the industry’s momentum—while highlighting decisive “strategic investments in technology” and cultivating “inviting store environments.”
At the ground level, Lowe’s grappled with unfavorable weather early in the quarter. Rain may have drenched patios and slowed foot traffic, yet digital channels and “Pro” contractor sales picked up the slack, driving mid-single-digit growth in those segments. The consumer still shows up—they just click more often before walking the aisles.
Wall Street responded with a surge: shares of Lowe’s popped nearly 3% in pre-market trading. The turnaround brought relief after a year when the stock lagged, down roughly 6% while the S&P 500 edged 1% higher.
Rival Home Depot (Home Depot) has also stumbled, delivering mixed results just a day earlier and seeing declines of 3.1% year to date. While Home Depot recommitted to guidance—and promised not to pass tariff costs to shoppers—tariffs remain a shadow looming over the entire sector.
- The U.S. has rolled back some tariffs on Chinese imports, now hovering at 30% (down from 145%), with a temporary universal 10% duty suspended.
- Yet that relief is relative: the landscape is still significantly costlier than pre-pandemic levels, eroding consumer sentiment and squeezing margins.
Lowe’s is particularly exposed, sourcing about 20% of its sales from China—making tariff mitigation “more challenging” according to analysts like Max Rakhlenko at TD Cowen. Home Depot, with a heavier focus on professional contractors, is better insulated.
The company’s guidance for 2025 offers careful optimism: total sales between $83.5 billion and $84.5 billion, with flat to modestly higher same-store sales.
The message for homeowners and investors alike? Lowe’s isn’t simply weathering the storm—it’s navigating it with grit, agility, and a sharp eye on consumer needs. Even as tariffs shift and housing uncertainty lingers, the blue aprons at Lowe’s are betting on a brighter, busier season ahead.
Lowe’s Shakes Up Wall Street—but What’s the Real Story Behind the Numbers?
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Pros:
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Resilient Earnings: Despite challenging economic conditions,
Lowe’s exceeded earnings estimates and showed stronger-than-expected same-store sales. - Strategic Investments: The company is investing in technology and store upgrades, aiming to create an inviting shopping environment and boost efficiency.
- Growth in Digital & Pro Segments: Digital sales and “Pro” contractor business segments are showing robust mid-single-digit growth.
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Resilient Earnings: Despite challenging economic conditions,
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Cons & Limitations:
- Revenue Decline: Total revenue dipped 2% year-over-year, signaling persistent headwinds in the home improvement market.
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Ongoing Tariff Exposure: With about 20% of sales sourced from China,
Lowe’s faces disproportionate risk from U.S.-China trade tariffs—even after recent rollbacks. - Weather Vulnerability: Unfavorable weather remains a threat to in-store traffic and certain seasonal categories.
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Lagging Stock Performance: Shares of
Lowe’s have underperformed the S&P 500 over the past year.
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Controversies:
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Tariff Policy Uncertainty: The broader home improvement sector—both Lowe’s and
Home Depot—faces continued volatility in U.S. tariff policy, which clouds profit outlook and pricing strategies. - Margin Pressure: Persistent higher import costs may translate to squeezed margins or eventual consumer price increases, especially if tariff relief proves temporary.
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Tariff Policy Uncertainty: The broader home improvement sector—both Lowe’s and
Home Improvement Industry: What’s Next? Insider Trends and Big Predictions Through 2025
Strategic Focus on Technology: Lowe’s has signaled continued investment in digital sales channels and store environments. This trend is expected to accelerate, with more customers shifting online and companies enhancing their e-commerce infrastructure. Keep up with official updates on Lowe’s.
Resilience Amid Economic Uncertainty: Despite headwinds in the housing market, both Lowe’s and Home Depot are steering toward modest growth. Forecasts suggest that adaptable retailers with diversified sales channels may outperform, especially if interest rates stabilize and the housing sector starts recovering.
Tariff Turbulence and Supply Chain Shifts: The sector remains exposed to global supply risks and tariffs, particularly with about 20% of Lowe’s goods still sourced from China. While some U.S. tariffs have eased (now at 30%), unpredictable policy may shape pricing and profitability in the coming years. Follow tariff updates via S&P Global.
Pro Segment Drives Growth: With mid-single-digit gains from professional contractors, expect increased competition for Pro customers. Companies like Home Depot, already strong in this segment, may see rivals intensifying their focus on this lucrative base.
Measured Optimism for 2025: Lowe’s projects sales between $83.5 and $84.5 billion for the next fiscal year, with flat to slightly positive comparable store sales. Industry watchers believe careful expansion—paired with prudent supply management—will define winning strategies through 2025.
Bottom line: Expect steady but cautious progress as the home improvement sector adapts to evolving consumer behaviors, moderating supply chain challenges, and a still-uncertain economic backdrop.
