Lowe’s Raises Outlook, Expands Pro Reach With $8.8 Billion Acquisition

Key Takeaways:

• Lowe’s second-quarter earnings outperformed analyst expectations
• Adjusted EPS rose 5.6% to $4.33
• Sales reached $23.96 billion, with comparable sales up 1.1%
• Gross margin improved to 33.81%
• Acquisition of ADG expands access to Pro customers and new home construction

Article Body

Introduction

Lowe’s Companies, Inc. continued its upward climb in the second quarter. The home-improvement giant reported stronger-than-expected results, highlighting both the Pro and consumer (DIY) segments as key drivers of growth. “This quarter, the company delivered positive comp sales driven by solid performance in both Pro and DIY,” Marvin R. Ellison, Lowe’s chairman, president, and CEO, said.

Earnings Breakdown

For the quarter ending August 2025, Lowe’s posted net earnings of $2.4 billion, or diluted Earnings Per Share (EPS) of $4.27—an increase from $4.17 in the same quarter last year. Adjusted diluted EPS rose 5.6% to $4.33, topping Wall Street estimates of $4.24. Quarterly sales reached $23.96 billion, up from $23.59 billion a year earlier, and comparable sales improved by 1.1%.

Margins and Performance

While sales and net earnings climbed, margin dynamics also shifted. The company’s gross margin expanded by 34 basis points to 33.81%, reflecting effective cost management and pricing strategies. Operating margin, however, narrowed by 15 basis points to 14.5%.

Strategic Moves

In June, Lowe’s closed on its $8.8 billion acquisition of ADG, a move designed to expand its reach into the Pro market and new home construction. Ellison emphasized the potential of this deal: “(It) strengthens our ability to capture a greater portion of Pro planned spend and expands our reach into the new home construction market.” This acquisition marks a significant step toward bolstering Lowe’s services for professional contractors, an increasingly important customer segment.

Conclusion

Overall, Lowe’s second-quarter performance and recent strategic acquisition signal the company’s commitment to driving growth and remaining a strong player in the broader home-improvement market. By focusing on Pro and DIY consumers alike, along with the new avenues opened by ADG, Lowe’s appears poised to extend its momentum in the quarters ahead.