Home improvement retailer Lowe’s (NYSE: LOW) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.9% year on year to $20.58 billion. The company expects the full year’s revenue to be around $93 billion, close to analysts’ estimates. Its non-GAAP profit of $1.98 per share was 1.9% above analysts’ consensus estimates.
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Lowe's (LOW) Q4 CY2025 Highlights:
- Revenue: $20.58 billion vs analyst estimates of $20.36 billion (10.9% year-on-year growth, 1.1% beat)
- Adjusted EPS: $1.98 vs analyst estimates of $1.94 (1.9% beat)
- Adjusted EBITDA: $2.52 billion vs analyst estimates of $2.33 billion (12.2% margin, 8% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $12.50 at the midpoint, missing analyst estimates by 3.4%
- Operating Margin: 8.3%, down from 9.9% in the same quarter last year
- Free Cash Flow Margin: 4.7%, up from 2% in the same quarter last year
- Same-Store Sales rose 1.3% year on year (0.2% in the same quarter last year)
- Market Capitalization: $156.3 billion
"We delivered strong results this quarter, as our Total Home strategy is resonating with both our Pro and DIY customers, which was evident during a great holiday season. Given our outperformance this quarter, we awarded $125 million in discretionary bonuses to our frontline associates in recognition of their hard work and outstanding customer service," said Marvin R. Ellison, Lowe's chairman, president and CEO.
Company Overview
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $86.29 billion in revenue over the past 12 months, Lowe's is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. To expand meaningfully, Lowe's likely needs to tweak its prices or enter new markets.
As you can see below, Lowe’s revenue declined by 3.8% per year over the last three years as it didn’t open many new stores and observed lower sales at existing, established locations.
This quarter, Lowe's reported year-on-year revenue growth of 10.9%, and its $20.58 billion of revenue exceeded Wall Street’s estimates by 1.1%.
Looking ahead, sell-side analysts expect revenue to grow 8.1% over the next 12 months, an acceleration versus the last three years. This projection is particularly noteworthy for a company of its scale and indicates its newer products will fuel better top-line performance.
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Store Performance
Number of Stores
Lowe's has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.
When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.
Note that Lowe's reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Lowe’s demand has been shrinking over the last two years as its same-store sales have averaged 1.1% annual declines. This performance isn’t ideal, and we’d be concerned if Lowe's starts opening new stores to artificially boost revenue growth.
In the latest quarter, Lowe’s same-store sales rose 1.3% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.
Key Takeaways from Lowe’s Q4 Results
We were impressed by how significantly Lowe's blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 1.6% to $274.04 immediately following the results.
Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
