Lowe’s Navigates Challenging Housing Market, Forecasts Flat Industry Demand

Lowe’s Companies, Inc. (NYSE: LOW) reported fourth-quarter earnings that exceeded Wall Street expectations, but cautioned that the home improvement sector continues to face headwinds from inflation, economic uncertainty and high mortgage rates. CEO Marvin Ellison indicated the company is prepared for a largely unchanged housing market in the coming year.

Q4 2025 Earnings Highlights

• Earnings per share: $1.98 adjusted vs. $1.94 expected
• Revenue: $20.58 billion vs. $20.34 billion expected
• Comparable sales: Increased 1.3%, surpassing the expected 0.2%

Despite a year-over-year sales growth of over 10%, Lowe’s net income for the quarter decreased to $999 million, or $1.78 per share, compared to $1.13 billion, or $1.99 per share, in the same period last year. Growth in the quarter was driven by gains with professional customers, online sales, and a strong holiday season.

Full-Year Outlook

For the full fiscal year 2026, Lowe’s anticipates total sales between $92 billion and $94 billion, representing a roughly 7% to 9% increase over the prior year. Adjusted earnings per share are projected to be between $12.25 and $12.75. Comparable sales are expected to be approximately flat to up 2%.

Housing Market “Lock-In” Effect

Marvin Ellison explained that elevated mortgage rates have created a “lock-in effect,” with homeowners hesitant to sell their properties. “For us, the greatest fuel for the home improvement industry is when you decide to put your house on the market,” Ellison said. “Because the first thing you do when you put it on the market is you fix up your yard, you repair your fence, you paint your walls, you do simple beautification modifications in your home.”

Strategic Initiatives

Lowe’s is focusing on strategies to resonate with both do-it-yourself (DIY) customers and home professionals. These include improvements to digital experiences, flexible delivery options, and expanded installation services. The company has similarly been actively acquiring businesses catering to contractors, such as Foundation Building Materials and Artisan Design Group, to secure a steadier revenue stream.

Tariff Concerns and Cost Management

Recent Supreme Court rulings and potential fresh tariffs pose a challenge for Lowe’s, which imports approximately 40% of its goods. Ellison stated the company is prepared to utilize its existing tariff management strategies to mitigate potential cost increases.

Stock Performance

As of Tuesday’s close, Lowe’s shares were up nearly 16% year-to-date, exceeding the S&P 500’s roughly 1% gains during the same period. The stock has risen about 15% over the past year, nearly matching the S&P 500’s approximately 16% gains.

Leadership

Marvin R. Ellison is Chairman, President and Chief Executive Officer of Lowe’s Companies, Inc. He is the only African American to serve as Chairman and CEO of two Fortune 500 companies, having previously led J.C. Penney Co. And holding senior roles at The Home Depot and Target Corp. Lowe’s Leadership