Lowe's Q2 FY2026: EPS Beats at $4.40, Outlook Cut to Low End

Lowe's cleared the earnings bar investors set for it on Wednesday, then quietly told them to expect less for the rest of the year. Adjusted diluted earnings per share came in at $4.40 for the quarter ended July 31, above the $4.24 to $4.27 consensus range analysts had built ahead of the print, while total sales of $26.0 billion landed just under the roughly $26.2 billion Wall Street expected. That combination, a clean beat on profitability against a soft miss on the top line, is the kind of mismatch that tells you more about where the housing-linked consumer stands than either number alone.

The guidance revision is the real story here, and it is not subtle. Lowe's narrowed every single line of its fiscal 2026 outlook to the low end of the range it gave in May: total sales to $92.0 billion from a prior $92.0 to $94.0 billion band, comparable sales to flat from a prior flat-to-up-2% range, operating margin to 11.2% from 11.2% to 11.4%, and adjusted diluted EPS to roughly $12.25 from a prior $12.25 to $12.75. When a retailer cuts the top of every range at once rather than trimming one metric, that reads as a management team pricing in a second half that looks like the first, not a temporary air pocket.

CEO Marvin Ellison framed the quarter around Pro, online, and home services, and the numbers back him up. Comparable sales rose 0.2%, the fifth consecutive quarter of positive comps, with online sales up 15.7% and Pro demand doing the heavy lifting. What he did not need to say explicitly is that DIY, the category most sensitive to a homeowner's willingness to spend on a project rather than defer it, is still the drag. That split matters because it maps almost exactly onto the rate-sensitive part of the housing complex: Pro contractors keep working through renovation and repair backlogs that do not disappear when rates stay high, while the DIY customer facing a 6.67% 30-year mortgage as of August 13 (Freddie Mac data via FRED) is the one deciding a new deck can wait another year.

Existing-home sales, the transaction volume that typically feeds big-ticket home improvement spending, ran at a 4.06 million-unit annualized pace in the most recent reading, down from 4.13 million the prior month. Housing starts fell to 1.24 million units in July from 1.42 million in June. Both series point the same direction Lowe's guidance does: a housing market still working through elevated financing costs, with turnover-driven demand (the kind that shows up when someone buys a house and immediately remodels it) staying scarce. Lowe's own $0.11 per-share benefit from IEEPA tariff refunds this quarter is a reminder that trade policy is still moving through retailer cost structures in ways that flatter one quarter's print without changing the underlying demand picture.

The market's reaction is worth sitting with. Lowe's shares rose roughly 4.0% on the day, more than the roughly 1.5% Home Depot picked up after its own Tuesday report despite Home Depot posting the larger raw beat: adjusted EPS of $4.92 against a $4.73 consensus, with comparable sales up 1.7% and full-year guidance reaffirmed rather than cut. Read together, the pair tells a consistent home-improvement story from two angles. Home Depot, more weighted toward Pro and larger-ticket renovation, is holding its full-year line. Lowe's, with a DIY mix that skews more toward the discretionary end of the same consumer, is walking its guidance down to what it can defend rather than what it hoped for in May. Investors appear to be rewarding the honesty of the cut about as much as the EPS beat that came with it, which is its own signal about how little room this tape has for a guidance-day surprise to the downside.

The bull case for Lowe's rests on the parts of the business that are not decelerating: Pro penetration, the online channel, and the operating discipline that turned a below-consensus revenue quarter into an above-consensus EPS quarter anyway. The bear case is that cutting every metric to the low end, in the same quarter a tariff refund was needed to get there, sets a lower baseline for the second half rather than a one-quarter blip. Both are legitimate reads of the same data, and the difference between them will show up in the numbers that come next, not in this quarter's press release.

Watch two things from here. First, whether the 30-year mortgage rate breaks meaningfully below 6.5% before the fiscal fourth quarter, since that is the level that has historically started to unlock existing-home turnover and, with it, the DIY spending Lowe's is still waiting on. Second, whether Lowe's third-quarter comps hold near flat or slip negative, which would tell us whether management's low-end guidance was conservative or merely early.

Related reading: Home Depot's Q2 earnings beat; Home Depot, Target, and Walmart earnings set market direction; Q2 2026 earnings surge and sector rotation.

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