Lowe's beats earnings and pushes pro strategy

Lowe's reports solid second quarter and expands its professional customer focus with two acquisitions.

Lowe's builds pro push with two big buys after solid quarter

Lowe's posted a stronger than expected second quarter, beating Wall Street on earnings per share by three cents and matching revenue forecasts at about $23.96 billion. The retailer also signaled a clear shift to serving home professionals, announcing the acquisition of Foundation Building Materials for about $8.8 billion, and confirming a prior deal to acquire Artisan Design Group. The company raised its full-year outlook to $84.5 billion to $85.5 billion in sales with flat to up to 1% same-store sales growth and an EPS range of $12.10 to $12.35.

CEO Marvin Ellison framed the moves as a way to bolster Lowe's solutions for professional customers, noting that the two deals strengthen the company’s offerings for builders, property managers and other pro clients. In the quarter, Lowe's said it performed well on both its do-it-yourself and pro-facing sides, even as overall home improvement demand remained moderated by higher mortgage costs. Net income rose to $2.4 billion, or $4.27 per share, from $2.38 billion a year earlier, as revenue climbed year over year. The company had previously warned that DIY activity would face headwinds in a higher-rate environment, making the pro channel a focal point for growth. Shares moved higher in premarket trading following the results, underscoring investor focus on the pro strategy and the outlook.

Lowe's is betting that a stronger pro business will steady revenue as DIY demand cools. The acquisitions align with a broader industry trend where Home Depot and Lowe's chase professional customers who tend to spend more per project and show resilience when homeowners pull back. The strategy carries higher execution risk, including debt load from large purchases and the challenge of integrating two distributors into one coherent sales and service ecosystem. If the housing market remains constrained, the pro segment could be the make-or-break driver of margin expansion or pressure, depending on how efficiently Lowe's can cross-sell services with products.

Highlights

The next quarters will show whether pro growth can sustain broader profits amid a mixed housing market.