Lowe's Trims Full-Year 2026 Outlook to the Bottom of Every Prior Range as Comps Rise 0.2%

by Yemi Abiodun · August 19, 2026

Guidance & Outlook Reporter, Earnings Dispatch

Lowe's Companies reported second quarter 2026 results before the market opened on Wednesday, August 19, and the more consequential disclosure sat below the results table. The company reset every ranged element of its full-year fiscal 2026 outlook to the bottom of the band it had been carrying, converting those bands into single points. The comparison is against the outlook Lowe's affirmed alongside first quarter results on May 20, 2026, which was the most recent guidance in force.

Full-year total sales are now expected at $92.0 billion, against a prior range of $92.0 billion to $94.0 billion. Comparable sales are expected to be flat compared with the prior year, where the previous guidance allowed for flat to up 2 percent. Operating income as a percentage of sales is guided to 11.2 percent, previously 11.2 percent to 11.4 percent, and adjusted operating margin to 11.6 percent, previously 11.6 percent to 11.8 percent. Diluted earnings per share are guided to approximately $11.75, from a prior range of $11.75 to $12.25, and adjusted diluted earnings per share to approximately $12.25, from $12.25 to $12.75.

In each case the new figure is the former floor. The items that were already stated as single figures were left where they were: net interest expense of approximately $1.6 billion, an effective income tax rate of approximately 24.5 percent, and capital expenditures of up to $2.5 billion all match the May guidance.

One line in the outlook explains part of the framing. Lowe's states that the fiscal year 2026 outlook includes tariff refunds recognized during the second quarter and excludes any potential additional tariff refunds in the second half of the year. The release adds that both diluted EPS and adjusted diluted EPS "include an $0.11 benefit from IEEPA tariff refunds" — the benefit sits inside the GAAP figure as well as the adjusted one. Coverage of the earnings call published by Retail TouchPoints puts the quarter's refund at $80 million, or 30 basis points.

The quarter itself, which ended July 31, 2026, produced a wide gap between reported sales growth and same-store growth. Net sales of $25,956 million compared with $23,959 million in the quarter ended August 1, 2025, an increase of 8.3 percent computed from those exact figures; the release itself rounds to $26.0 billion against $24.0 billion and does not state a growth rate. Comparable sales rose 0.2 percent. Almost all of the reported growth therefore came from outside the comparable base, principally the acquisitions of Foundation Building Materials and Artisan Design Group. Online sales grew 15.7 percent.

Margins moved the wrong way. Gross margin was $8,577 million, or 33.04 percent of sales, against $8,101 million and 33.81 percent a year earlier. SG&A rose to $4,456 million, 17.17 percent of sales, from $4,175 million. Depreciation and amortization increased to $572 million from $457 million. Operating income was $3,549 million, 13.67 percent of sales, versus $3,469 million and 14.48 percent. Net interest expense grew to $374 million from $313 million, leaving pre-tax earnings of $3,175 million against $3,156 million.

After a $776 million income tax provision, against $758 million a year ago, net earnings were $2,399 million versus $2,398 million. Weighted average diluted shares were reported at 560 million in both periods. GAAP diluted earnings per share were $4.27, identical to the prior-year quarter. Adjusted diluted earnings per share were $4.40, against $4.33 a year earlier.

The $0.13 gap between the GAAP and adjusted figures is the acquisition charge, and only that: acquisitions of businesses is the single reconciling item in the release's non-GAAP table, at $0.13 after tax this quarter and $0.06 after tax in the year-ago quarter. Lowe's states that during the second quarter ended July 31, 2026 it recognized $96 million in pre-tax expenses associated with the acquisitions of Foundation Building Materials and Artisan Design Group. The arithmetic ties: at the quarter's effective tax rate of about 24.4 percent, $96 million pre-tax is roughly $72 million after tax, or about $0.13 against 560 million diluted shares.

The full-year guidance gap is a different item, and the release is explicit about it. Lowe's states that its "adjusted operating margin and adjusted diluted earnings per share guidance for fiscal 2026 excludes an expected 40 basis points and $0.50 after tax impact, respectively, from intangible asset amortization." The $0.50 that separates the $11.75 GAAP guidance point from the $12.25 adjusted point is therefore amortization of acquired intangibles, not the transaction expenses booked during the quarter.

Chain Store Age, reporting on the release, said the adjusted diluted result of $4.40 "topped analyst estimates of $4.22" while "total sales missed expectations of $26.2 billion" — a beat on earnings and a miss on sales in that account's framing. It does not name the provider of the estimates, though it applies the earnings comparison on an adjusted basis, against the $4.40 measure rather than the $4.27 GAAP one.

Chairman, president and chief executive Marvin R. Ellison addressed the underlying trade in the release: "Sustained growth in Pro, Online and Home Services led to our fifth consecutive quarter of positive comp sales, despite pressure in discretionary DIY spending. While the near-term remains dynamic, our teams are executing at a high level, advancing our Total Home strategy and investing to drive growth and profitability. I would like to thank all of our frontline associates for their hard work and dedication to our customers."

That characterization is consistent with the numbers. A 0.2 percent comparable increase is positive but thin, and the company's own language attributes it to professional customers, digital and installed services rather than to do-it-yourself discretionary demand. According to Retail TouchPoints' account of the call, executives described the core customer as a middle-income homeowner with a strong balance sheet, rising home equity and an aging house who is nonetheless behaving cautiously, with homeowners greenlighting smaller projects rather than large remodels, and repair and maintenance holding up better than discretionary DIY.

The same account reports that Lowe's declined to match competitors' promotions funded by tariff recoveries, accepting a short-term hit to July comparable sales in exchange for margin protection, with management describing that discounting as "transitory" and "the result of competitors having tariff refund dollars and looking for different ways to use those dollars to drive the top line." Chief financial officer Brandon Sink is reported as saying the company is actively filing for additional IEEPA refunds but has excluded any second-half benefit from the outlook given timing uncertainty. Retail TouchPoints also reports that the company's Mylow assistant has fielded approximately 25 million customer questions since launch and that customers who engage with it while browsing online convert at three times the rate of those who do not.

The two acquisitions carry their own cyclical exposure. Retail TouchPoints reports that Artisan Design Group is 100 percent exposed to residential construction and Foundation Building Materials about 45 percent, with FBM's commercial business, 55 percent of its revenue, performing more steadily. That links a meaningful share of the newly acquired revenue to residential construction rather than to existing-home repair.

Capital allocation stayed conservative. Lowe's paid $673 million of dividends in the quarter and repurchased no shares. The company ended the period with 1,761 stores and 196.0 million square feet of retail selling space.

With the guidance now expressed as points rather than ranges, the second half carries less room for interpretation. Flat full-year comparable sales after a second quarter that rose 0.2 percent implies the company expects no material acceleration, and the outlook explicitly assumes no further tariff recoveries beyond what has already been booked.