LOWES COMPANIES INC (LOW) Q4 2025 Earnings Summary

Executive Summary

Q4 2025 earnings are not yet reported as of Nov 20, 2025. This recap covers Lowe’s most recent reported quarter (Q3 2025, quarter ended Oct 31, 2025) and incorporates updated full‑year guidance to frame Q4 expectations. Lowe’s delivered $20.8B revenue (+3.2% y/y), comps +0.4%, and adjusted EPS of $3.06 (GAAP $2.88) amid ~100 bps hurricane lap headwinds, and raised FY25 sales guidance to $86.0B while tightening EPS to ~$12.25 .
Mix and execution drove 50 bps y/y gross margin expansion to 34.2%; online sales grew 11.4% and home services posted double‑digit comps; Pro continued to grow. Adjusted operating margin ticked up ~10 bps y/y to 12.4% while GAAP opex deleveraged on investments and bonus normalization .
Guidance changes: FY25 sales raised to $86.0B (from $84.5–$85.5B), comps guided to flat (from flat to +1%), adjusted op margin set at 12.1% (from 12.2–12.3%), net interest to ~$1.4B (from $1.3B), tax to ~24% (from 24.5%), adjusted EPS to ~$12.25 (from $12.20–$12.45) .
Strategic catalysts: FBM closed in Oct, enhancing Pro fulfillment and commercial exposure; AI assistants (Mylow/Mylow Companion) are scaling with materially higher online conversion and +200 bps in-store CSAT; early November comps positive into holiday, with consistent promo cadence .

What Went Well and What Went Wrong

What Went Well
- Digital and services momentum: online sales +11.4% y/y; home services delivered double‑digit comps; Pro sales continued to grow .
- Pricing/mix/exec: gross margin +50 bps y/y (34.2%) helped by lapping storm pressures, better credit performance, and SKU rationalization sell‑through; adjusted operating margin expanded ~10 bps y/y to 12.4% .
- AI at scale: “Mylow” virtual assistants answer ~1M questions/month; online conversion “more than doubles” when customers engage; in‑store Mylow Companion lifted CSAT by 200 bps (CEO) .
What Went Wrong
- Transactions softness and weather lap: comparable transactions fell 3%; monthly comps were +2.5% Aug, +0.9% Sep, and −2.6% Oct due to storm overlap; ~100 bps hurricane headwind to the quarter .
- Opex deleverage: adjusted SG&A was 19.6% of sales, deleveraging 36 bps on prior‑year bonus normalization and sales‑driving investments; GAAP operating margin 11.92% vs 12.57% last year .
- Higher interest and tariff backdrop: net interest guided up to ~$1.4B for FY25; tariffs ramped in Q3 and will continue into Q4 and 1H26, impacting margin mix management (CFO) .

Financial Results

Quarterly trend (fiscal 2025 YTD)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($B)	$20.93	$23.96	$20.81
Comparable Sales %	−1.7%	+1.1%	+0.4%
GAAP Diluted EPS ($)	$2.92	$4.27	$2.88
Adjusted Diluted EPS ($)	n/a	$4.33	$3.06
Gross Margin %	33.38%	33.81%	34.19%
SG&A % of Sales	19.33%	17.42%	19.99%
Operating Margin % (GAAP)	11.92%	14.48%	11.92%
Net Income ($B)	$1.64	$2.40	$1.62

Q3 year-over-year comparison

Metric	Q3 2024	Q3 2025
Revenue ($B)	$20.17	$20.81
GAAP Diluted EPS ($)	$2.99	$2.88
Adjusted Diluted EPS ($)	$2.89	$3.06
Gross Margin %	33.69%	34.19%
Operating Margin % (GAAP)	12.57%	11.92%

Operating KPIs and balance items

KPI	Q1 2025	Q2 2025	Q3 2025
Online Sales Growth y/y	n/a	n/a	+11.4%
Home Services Growth	n/a	n/a	Double‑digit comps
Monthly Comps	n/a	n/a	Aug +2.5%, Sep +0.9%, Oct −2.6%
Inventory ($B)	$18.34	$16.34	$17.18
Stores (Count)	1,750	1,753	1,756
Retail Selling Sq Ft (mm)	195.3	195.5	195.8

Non‑GAAP adjustments (Q3): $129M pre‑tax acquisition‑related costs (FBM/ADG) raised adjusted EPS to $3.06 vs GAAP $2.88; prior‑year Q3 included a $54M pre‑tax gain from Canada sale that reduced prior‑year adjusted EPS to $2.89 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Sales	FY2025	$84.5–$85.5B	$86.0B	Raised
Comparable Sales	FY2025	Flat to +1%	Flat	Lowered (narrowed to flat)
Adjusted Operating Margin	FY2025	12.2–12.3%	12.1%	Lowered
Net Interest Expense	FY2025	~$1.3B	~$1.4B	Raised
Effective Tax Rate	FY2025	~24.5%	~24.0%	Lowered
Adjusted Diluted EPS	FY2025	~$12.20–$12.45	~$12.25	Tightened (midpoint ~flat)
Capital Expenditures	FY2025	~$2.5B	Up to $2.5B	Maintained

CFO added that FBM and ADG dilute FY25 adjusted operating margin by ~20 bps (roughly split) and will have a ~50 bps annualized margin impact in 2026 (mostly gross margin), with planned deleveraging back to 2.75x by mid‑2027 .

Earnings Call Themes & Trends

Topic	Q1 2025 (Q‑2)	Q2 2025 (Q‑1)	Q3 2025 (Current)	Trend
Macro & Demand	Comps −1.7% on weather, DIY soft; affirmed FY25 guide	Comps +1.1%, Pro and DIY both positive; raised sales outlook (ADG included)	Comps +0.4%; ~100 bps hurricane lap headwind; consumer cautious; HELOC could spur remodel demand as rates drift lower (CEO/CFO)	Stabilizing, cautiously optimistic
AI/Technology	n/a in Q1 PR	n/a in Q2 PR	Mylow/Companion at enterprise scale; conversion “more than doubles”; +200 bps CSAT; OpenAI 100B token milestone	Accelerating adoption/impact
Pro Strategy	n/a	ADG acquisition to capture more planned Pro spend	Pro growth continues; FBM integration to power Pro Extended Aisle and large‑order fulfillment	Expanding ecosystem
Online/Marketplace	n/a	n/a	Online +11.4%; marketplace launch exceeding expectations; in‑store returns for marketplace items	Positive early traction
Home Services	n/a	n/a	Double‑digit comps; tech‑enabled scheduling/quoting speeding cycle time	Improving
Tariffs & Margin	n/a	n/a	Tariffs ramped in Q3, continue in Q4 and wrap into 1H26; mix/credit/SKU actions offset near‑term	Manageable headwind
M&A Integration	n/a	Closed ADG in June	Closed FBM in Oct; IT platforms aligned to accelerate integration; long‑term EBITDA synergies expected	Building synergy pipeline

Management Commentary

“Adjusted operating margin expanded approximately 10 basis points, leading to adjusted diluted earnings per share of $3.06… These results reflect continued operational discipline and strong execution across our PPI initiatives.” — Marvin Ellison, CEO .
“Our virtual assistants… are answering nearly 1 million questions per month… when our customers engage with Mylow online, the conversion rate more than doubles… customer satisfaction scores increase 200 basis points.” — Marvin Ellison, CEO .
“Excluding [transaction] impacts, we delivered adjusted diluted earnings per share of $3.06, exceeding our expectations… Gross margin was 34.2%, up 50 basis points… [with] better‑than‑expected credit revenue and sell‑through of SKU rationalization.” — Brandon Sink, CFO .
“When we include FBM sales of approximately $1.3 billion in the fourth quarter, we are expecting sales of approximately $86 billion for the year… Adjusted operating margin ~12.1%… adjusted diluted EPS of approximately $12.25.” — Brandon Sink, CFO .

Q&A Highlights

Near‑term trends and Q4 setup: November started with positive comps despite storm laps; holiday categories, appliances, tools showing early strength; promotional cadence consistent with prior years (Mgmt) .
2026 margin/FBM‑ADG impact: 2025 dilution ~20 bps; annualized ~50 bps in 2026, mostly gross margin; deleveraging path to 2.75x by mid‑2027; share repurchases paused during integration (CFO) .
Macro/HELOC unlock: Elevated mortgage rates weigh on big‑ticket; high homeowner equity and HELOC rate declines could fund deferred projects (~$50B backlog), a potential 2026 catalyst (Mgmt) .
Gross margin drivers: Benefit from lapping storms, credit outperformance, SKU rationalization sell‑through; tariffs moving in line with plan (CFO) .
Pro/marketplace: Small‑to‑medium Pro momentum strong; FBM to enhance Pro Extended Aisle fulfillment; marketplace launch exceeding expectations with high‑quality sellers and in‑store return convenience (Mgmt) .

Estimates Context

We attempted to retrieve S&P Global consensus EPS and revenue for Q3 2025 and prior quarters but were unable due to a daily request limit (tool error). As a result, we cannot provide numerical consensus comparisons in this report. We will update with S&P Global consensus as soon as available. The company noted Q3 adjusted EPS exceeded internal expectations; this is not a substitute for Street consensus .
FY25 guidance was raised on total sales to $86.0B and adjusted EPS tightened to ~$12.25, which should drive model updates heading into Q4 (Street estimates pending update) .

Key Takeaways for Investors

Mix tailwinds and execution are offsetting macro volatility: gross margin +50 bps y/y with positive online/services/Pro momentum; SKU rationalization and credit performance aiding margins into Q4 .
Guidance reset signals confidence: sales raised to $86.0B (includes ~$1.3B FBM in Q4); comps flat; adjusted EPS ~$12.25—Q4 should reflect initial FBM contribution and margin dilution as messaged .
AI is moving the needle commercially: materially higher conversion and CSAT provide durable digital and in‑store productivity levers into 2026 .
Pro ecosystem expansion: FBM and ADG broaden assortment and fulfillment, particularly for large orders and commercial balance; cross‑sell synergies under way, though near‑term margin dilution is expected .
Watch tariffs and interest expense: tariff ramp will continue through Q4/1H26; net interest raised to ~$1.4B; both are known headwinds, but offset efforts continue (pricing/mix/efficiency) .
Balance sheet strategy: leverage peaks post‑FBM then delevers toward 2.75x by mid‑2027; buybacks paused, dividend maintained ($1.20/share declared for Feb 4, 2026) .
Setup into Q4: early November comps positive; seasonal categories healthy; expect operating margin pressure from FBM/ADG layering and tariffs, consistent with CFO commentary; holiday execution and Pro strength are key near‑term stock drivers .

Appendix: Source Documents Read

Q3 2025 Form 8‑K/Press Release (Item 2.02): revenue, EPS, comps, guidance, financial statements .
Q3 2025 Earnings Call Transcript: performance drivers, AI, FBM/ADG integration, margin/2026 color –.
Q2 2025 Press Release: revenue, EPS, comps, initial ADG inclusion and raised FY25 outlook –.
Q1 2025 Press Release: revenue, EPS, comps, FY25 outlook affirmation –.
Dividend PR: $1.20/share declared, payable Feb 4, 2026 .