On August 19, Lowe’s Companies (NYSE:LOW) reported second-quarter sales of $26 billion, up 8.3% from a year earlier, even though comparable sales inched up just 0.2%. The headline number hides a split personality inside the business. Pro contractors, online shoppers and Do-It-For-Me customers kept spending, while everyday DIY homeowners pulled back hard enough that management trimmed its full-year guidance. That gap between who is still spending and who isn’t is the real story in this quarter.
Pros And Pixels Carry The Quarter
Pro sales grew again, and management credited small and medium-sized contractors responding to the company’s digital planning tools and the MyLowe’s Pro Rewards loyalty program, which lets Pros quote, plan, and manage jobs inside Lowe’s own platform. Online sales jumped 15.7%, helped by expanded visualization tools and the Mylow AI agent, which has fielded more than 25 million customer and associate questions since launch.
Notably, CEO Marvin Ellison said the conversion rate for online shoppers who use Mylow runs triple that of shoppers who don’t, a sign the tool is doing more than answering questions. Appliances delivered a seventh straight quarter of positive comparable sales, aided by next-day delivery in virtually every US ZIP code and a push into premium products like Traeger grills and a GE Profile refrigerator that scans groceries for an Instacart shopping list. Loyalty is compounding too: MyLowe’s Rewards has crossed 30 million members who shop more often and spend more per visit than nonmembers, giving the company a growing base to sell that premium assortment into even while the broader housing market stalls.
The DIY Customer Is Sitting On Their Hands
Comparable transactions fell 2.1% during the quarter, offset only by a 2.3% rise in average ticket, and management pinned the weakness on weather-sensitive and seasonal categories where DIY shoppers dominate. Executive Vice President Joe McFarland said Pro customers themselves are noticing it, describing homeowners who are “more cautious about their spending” and shifting toward smaller repair jobs instead of full remodels.
That caution pushed Lowe’s to guide toward the bottom of its prior range, now targeting roughly $92 billion in sales and $12.25 in adjusted earnings per share for the full year. Margins felt it too. Adjusted operating margin slipped 62 basis points to 14%, and CFO Brandon Sink noted that an $80 million tariff refund benefit was largely wiped out by elevated fuel and transportation costs. The company’s Foundation Building Materials and Artisan Design Group acquisitions add another layer of risk, since Sink flagged “softer-for-longer new home construction” pressuring demand in both segments. Inventory climbed to $17.7 billion, up $1.4 billion year over year, and adjusted debt to EBITDA sits at 3.0x against a 2.75x target management doesn’t expect to hit until mid-2027. Third quarter earnings are guided to come in roughly 7% below last year’s adjusted EPS.
What The Market Is Pricing In
Hedge fund ownership of Lowe’s rose from 66 funds to 69 over the two most recent quarters, a modest uptick in institutional conviction even as guidance softened. Short interest is thin at just 1.82% of float, which suggests little organized betting against the stock right now. The forward P/E sits at 17.18 as of August 26, a multiple that isn’t demanding much in the way of near-term growth given comparable sales are barely positive. Funds adding shares while short sellers stay largely absent points to a market that isn’t losing faith in the stock, even if it isn’t rushing in either.
Conclusion
Lowe’s is showing that a stalled housing market doesn’t have to sink the whole business, as long as Pro and online keep growing faster than DIY shrinks. The bulls can point to a loyalty base that keeps expanding, an AI tool that appears to genuinely move the needle on conversion, and cost discipline that held margins together despite tariff-related freight costs eating into the refund. The bears will note that management just walked its own full-year guidance down and that two recent acquisitions are now exposed to a housing slump neither side can control.
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