Lowe’s Companies narrowed its fiscal 2026 earnings outlook on Wednesday, reducing adjusted diluted EPS guidance to approximately $12.25 from a prior range of $12.25 to $12.75, and tightening comparable sales to flat from a prior flat-to-up-2% range. The cuts reflect first-half operational results and what the company describes as “current demand trends”, a euphemism for sustained weakness in discretionary do-it-yourself spending that is offsetting gains in its professional and online channels. The company’s second quarter showed the tension: comparable sales rose just 0.2%, held up entirely by Pro and home services strength plus a 15.7% increase in online sales, while the DIY customer retreated.
In the quarter ended July 31, 2026, Lowe’s reported net sales of $25,956 million, up 8.3% from $23,959 million in the prior-year quarter. Diluted EPS held flat at $4.27 versus the year-ago quarter, but adjusted diluted EPS rose 1.6% to $4.40 from the prior-year adjusted figure, after excluding $96 million in pre-tax acquisition expenses for Foundation Building Materials and Artisan Design Group. The adjusted EPS figure includes an $0.11 benefit from IEEPA tariff refunds. For the first half of 2026, net sales reached $49,034 million versus $44,888 million in the prior-year six months. The company affirmed its full-year operating margin guidance at 11.2% and adjusted operating margin at 11.6%, both at the low end of prior ranges.
What it means
The headline delta is the downward revision to the earnings ceiling. Lowe’s had guided to adjusted diluted EPS of $12.25 to $12.75; it now guides to approximately $12.25, eliminating the upside. Comparable sales guidance moved from flat-to-up-2% to flat, a meaningful narrowing that signals the company does not expect a DIY recovery in the second half. The culprit is structural, not cyclical: the company explicitly names “persistent DIY macro pressures” as the offset to Pro gains. This is not a one-quarter phenomenon but a sustained trend the company has now internalized into its full-year view.
The operational picture is bifurcated. Pro and online are performing, the quarter’s 0.2% comp sales growth came entirely from these segments and home services, meaning the DIY business declined in absolute terms. The company’s gross margin compressed 77 basis points to 33.04% from 33.81% in the prior-year quarter, a signal that mix (more Pro, less discretionary DIY) and pricing dynamics are working against profitability even as sales grow. Operating income as a percentage of sales fell to 13.67% from 14.48% in the prior quarter, though the six-month operating margin of 12.45% remains above the full-year guidance of 11.2%, suggesting the second half will be materially weaker.
The open question is whether the Pro and online momentum can sustain if DIY weakness deepens. The company’s guidance assumes flat comps for the full year, implying the second half will be weaker than the first half’s implied performance. The tariff refund benefit of $0.11 per share in Q2 is explicitly excluded from the second-half outlook, removing a tailwind. The company does not quantify how much of the Q2 comp sales growth came from Pro versus online, leaving unclear which channel is the true driver and which is more durable.
Source: the company’s 8-K filed 2026-08-19 with the SEC.
