Lowe’s shares dropped on Wednesday because the company’s outlook for the rest of the year disappointed investors, even though it reported better-than-expected earnings for the second quarter.
Before the market opened, Lowe’s shares were down 2.9%, while the overall market stayed about the same.
Lowe’s reported adjusted earnings of $4.40 per share for the quarter, beating analysts’ expectations of $4.22. Total sales grew more than 8% from last year to $26 billion, slightly above the $26.1 billion estimate.
Even though results were strong, Lowe’s lowered its outlook for the rest of the year. The company now expects adjusted earnings of $12.25 per share and revenue of $92 billion for the fiscal year ending January 2027. Both numbers are below Wall Street’s forecasts of $12.43 per share and $92.9 billion in sales.
The weak outlook put more pressure on Lowe’s stock, which was already down 11% for the year as of Tuesday. Although the housing market is starting to recover, high prices are still holding back home-improvement spending in 2026. This trend has affected the whole sector, with both Lowe’s and Home Depot seeing their shares fall over the past year.
Housing conditions are slowly getting better, and policymakers are working to make homes more affordable. Still, the recovery is uneven, and high prices are making it hard for many new homeowners to take on renovation projects.
There are still some reasons to be optimistic about Lowe’s. Since the first-quarter reports, Lowe’s stock has not done as well as Home Depot’s, but recent data shows that more people visited Lowe’s stores than its main competitor’s in the second quarter. Expectations for the sector are still low, and Lowe’s shares are cheaper than Home Depot’s. Most analysts remain positive on the stock, with average price targets suggesting there could be significant gains from here.
