Lowe’s Companies Inc. ($LOW) Stock: Q2 2025 Earnings Show Solid Sales Growth and Strategic Acquisitions

TLDR

• Q2 2025 net sales reached $24.0B, up from $23.6B in Q2 2024.

• Adjusted EPS rose 5.6% YoY to $4.33, excluding ADG-related costs.

• Comparable sales grew 1.1% with strength in Pro and DIY.

• Online sales advanced 7.5%, driven by digital engagement.

• FY2025 sales outlook raised to $84.5B–$85.5B.

Lowe’s Companies Inc. (NYSE: LOW) stock traded at $254.93, down 0.86%, as of 1:18 PM EDT on August 20, following the release of its second-quarter 2025 results.

Lowe’s Companies, Inc. (LOW)

The company posted net earnings of $2.4 billion and diluted EPS of $4.27 compared to $4.17 last year. Adjusted EPS came in at $4.33, up 5.6% year over year, after excluding $43 million in pre-tax expenses linked to the acquisition of Artisan Design Group (ADG).

Total sales were $24.0 billion, reflecting growth over $23.6 billion in the prior-year quarter. Comparable sales increased 1.1%, driven by gains across both Pro and DIY segments despite early weather headwinds. CEO Marvin R. Ellison credited the company’s associates for delivering higher customer satisfaction scores while sustaining profitability.

Growth Drivers and Strategic Moves

The quarter highlighted Lowe’s focus on expanding its Pro customer base. The acquisition of ADG closed in June, positioning Lowe’s to capture more planned spend from Pro clients and strengthen its footprint in new home construction. Separately, Lowe’s announced the acquisition of Foundation Building Materials (FBM), expected to broaden its reach in the $250 billion Pro market.

Online sales rose 7.5% year over year, bolstered by an immersive shopping experience and customer loyalty initiatives, including My Lowe’s Rewards. The company also launched a Home Improvement creator network featuring influencers such as MrBeast, aiming to boost brand engagement with younger consumers.

Financial Health and Capital Allocation

Lowe’s ended Q2 with $16.3 billion in inventory, down $499 million from last year. Free cash flow reached $3.7 billion, with $495 million allocated to capital expenditures. During the quarter, the company invested $1.3 billion in the ADG acquisition and paid $645 million in dividends. Return on invested capital stood at 29.5%.

While Lowe’s has paused share repurchases until 2027 to prioritize debt reduction, its disciplined capital allocation continues to emphasize shareholder returns through dividends and long-term investments.

Outlook for FY2025

Lowe’s updated its full-year 2025 sales outlook to $84.5 billion to $85.5 billion, up from prior guidance. Comparable sales are expected to remain flat to up 1%. Adjusted operating margin is forecast at 12.2% to 12.3%, with adjusted EPS between $12.20 and $12.45.

Challenges remain, including elevated mortgage rates, labor cost pressures for Pros, and a sluggish housing market. Integration risks from the ADG and FBM acquisitions could also weigh on operations. Still, Lowe’s strategic investments and customer-focused approach position it for steady long-term growth.

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