A home improvement retailer and the second-largest in its field worldwide, Lowe's sells tools, appliances, lumber, and paint across roughly 1,700 U.S. stores plus online, serving both do-it-yourself homeowners and professional contractors. It began in 1921 as North Wilkesboro Hardware, a North Carolina general store stocking horse tack and snuff alongside nails, opened by Lucius Lowe; his brother-in-law Carl Buchan later built the family business into a hardware chain that kept the Lowe name.
Lowe's Q2 FY2026 revenue rose 8.3% to $26.0B, but net earnings were flat at $2.4B as acquired-cost structure cut gross margin.
growth accelerated, but earnings did not follow. Net sales rose 8.3% to $26.0B while rose only 0.2%, and fell 0.8 points to 33.0% as the cost structure of the 2025 acquisitions and higher fuel costs outweighed credit revenue favorability and about $80M of tariff refunds. The company is growing through acquisitions while its underlying store base stays roughly flat, and the margin pressure from those deals is now the central question.
Key takeaways
rose 8.3% to $26.0B, but rose only 0.2% on a 2.3% higher average ticket offset by a 2.1% decline in customer transactions — the growth came from the acquired businesses, not the existing store base.
fell 0.8 points to 33.0%, driven by the operational cost structure of the 2025 acquisitions and higher fuel costs, partially offset by credit favorability and about $80M of tariff refunds.
was flat at $2,399M and was flat at $4.27, while rose 2.3% to $3,549M.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net sales rose 8.3% to $26.0B, but net earnings stayed flat at $2.4B as gross margin fell 77 bps.
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increased 8.3% to $25.96B in Q2 FY2026, while rose only 0.2% on a 2.3% higher average ticket offset by a 2.1% decline in customer transactions.
was $4.40 versus $4.33 a year ago, excluding $96M of pre-tax tied to the and acquisitions.
25 to 17.17% of sales, while and 29 basis points due to from acquired businesses.
The EPA and DOJ lead-safe investigation was resolved: the second was approved on July 8, 2026, and the $12.5M civil penalty agreed in November 2025 is now final.
What changed
Q1 FY2026 flagged against the +0.6% Q1 base as the test of ; Q2 comparable sales rose only 0.2%, so the organic growth rate slowed even as total growth accelerated from 10.3% to 8.3%.
Q1 flagged trajectory as acquired-cost structure persisted against the 32.7% Q1 level; Q2 gross margin was 33.0%, still down 0.8 points and below the 33.8% reported in Q2 FY2025.
Q1 flagged integration costs from and on and ; Q2 showed $96M of pre-tax tied to those acquisitions, which management excluded from adjusted .
The lead-safe investigation that had been flagged since FY2023 is now closed: the second was approved July 8, 2026, and the $12.5M civil penalty is final.
Share repurchases resumed in Q1 at $365M after the FY2025 pause; the company paid $1.3B in dividends in the first six months and repaid $2.4B of debt maturities.
What to watch
Q3 FY2026 against the +0.2% Q2 base to see whether holds or fades as acquisition boosts annualize.
trajectory as acquired-business cost structure and fuel costs persist against the 33.0% Q2 level.
Pace of share repurchases after the $365M Q1 against the $7.4B shareholders' deficit and $35.2B .
Integration costs from and on and in Q3, including whether the $96M quarterly intangible amortization recurs.
declined 77 to 33.04% of sales, driven by the operational cost structure of 2025 acquisitions and higher fuel costs, partially offset by credit favorability and about $80M of tariff refunds.
leveraged 25 to 17.17% of sales, while and deleveraged 29 bps due to from acquired businesses.
Adjusted was $4.40 in Q2 FY2026 versus $4.33 a year ago, excluding $96M of pre-tax tied to the and acquisitions.
was $7.0B for the first six months, down from $7.6B, with $1.1B of ; the company paid $1.3B in dividends and repaid $2.4B of debt maturities.
The company reiterated fiscal 2026 capital expenditure of approximately $2.5B and cited a cautious consumer environment with pressure on discretionary DIY demand.
Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to certain market risks, including changes in interest rates, transportation costs, and commodity prices. The Company’s market risks have not changed materially from those disclosed in the Annual Report for the fiscal year ended January 30, 2026.
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The Company is exposed to certain market risks, including changes in interest rates, transportation costs, and commodity prices. The Company’s market risks have not changed materially from those disclosed in the Annual Report for the fiscal year ended January 30, 2026.
Company resolved EPA lead-practices investigation with a $12.5M civil penalty and a new consent decree approved July 8, 2026.
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The U.S. Attorney’s Office for the Central District of California and EPA Region 9 investigated recordkeeping and lead-safe practices under the Toxic Substances Control Act and Lead Renovation, Repair and Painting Rules.
The investigation covered the Company and independent contractors who performed installations under its in pre-1978 homes.
EPA Region 5 and other EPA and DOJ representatives identified possible deviations from the Company's 2014 EPA civil in the third quarter of fiscal 2023.
On November 25, 2025, the Company agreed, without admitting liability, to pay a $12.5 million civil penalty and enter into a second replacing the 2014 decree.
The second was lodged in the U.S. District Court for the Central District of California and approved on July 8, 2026 after a public comment period, and has become final.
The Company does not believe any ordinary-course proceedings, individually or in the aggregate, would have a material adverse effect on results of operations, financial position, or cash flows.
There have been no material changes in the Company’s risk factors from those disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report filed with the SEC on March 23, 2026.
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There have been no material changes in the Company’s risk factors from those disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report filed with the SEC on March 23, 2026.