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Lowe's Companies (LOW) Q2 Earnings call transcript Aug 20, 2025

AInvestThursday, Aug 22, 2024 12:01 pm ET
1min read

In its recent earnings call for the second quarter of 2024, Lowe's Companies Inc. reported a mixed performance, with sales down 5.1% compared to the same period last year, but positive comps in Pro and online sales. Despite these challenges, the company remains optimistic about its long-term prospects, particularly with its strategic investments in its Total Home Strategy and the evolving digital landscape.

Macro Challenges and Resilience in the Face of DIY Demand

Marvin Ellison, CEO of Lowe's, acknowledged the ongoing difficulties in the DIY market, with softness in DIY demand affecting big-ticket projects. However, the company's focus on effective expense management and perpetual productivity improvement initiatives has helped it navigate these challenges. Ellison expressed confidence in the team's ability to respond to market conditions and improve customer experience, including through the successful rollout of its MyLowe's Rewards loyalty program.

Strategic Growth Initiatives and Technology Innovation

Lowe's has been actively investing in its Total Home Strategy, with mid-single-digit positive comps in Pro and 2.9% comparable sales growth online. The company's partnerships with leading technology brands like Apple, NVIDIA, OpenAI, and Palantir are aimed at enhancing customer experience and driving operational efficiency. Additionally, the expansion of its delivery partnerships with platforms like Uber Eats, DoorDash, Shipt, and Instacart has been instrumental in extending reach and driving incremental sales, particularly in urban and suburban areas.

Outlook and Strategic Priorities

Looking ahead, Lowe's is cautious about the macroeconomic environment, with ongoing challenges in housing turnover and consumer sentiment. However, the company remains optimistic about the medium- to long-term outlook for the home improvement industry, driven by factors such as aging housing stock and demographic trends like millennials forming households and baby boomers aging in place. Lowe's plans to continue investing in technology, innovation, and customer experience, while maintaining a disciplined approach to expense management and capital allocation.

Financial Performance and Guidance

For the second quarter, Lowe's reported GAAP diluted earnings per share of $4.17, with adjusted diluted earnings per share at $4.10. Sales for the quarter were $23.6 billion, with comparable sales down 5.1%. The company's adjusted operating margin rate declined 114 basis points, reflecting the impact of sales deleverage and ongoing PPI initiatives. Looking ahead, Lowe's expects sales in the range of $82.7 billion to $83.2 billion for the full year, with comparable sales projected to be down 3.5% to 4%.

Conclusion

Lowe's Companies Inc. continues to face challenges in the DIY market, but its strategic investments in technology, innovation, and customer experience are positioning it for long-term growth. With a disciplined approach to expense management and a focus on strategic initiatives, Lowe's is well-positioned to navigate the evolving home improvement landscape and capitalize on opportunities for expansion.

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