[LOW] Lowe's: Can Comparable Sales Hold Flat as DIY Traffic Falls?

Lowe's is a large US home improvement retailer that operated 1,761 stores with 196 million square feet of selling space as of July 31, 2026[1], and through its 2025 acquisitions of FBM and ADG it also distributes building materials and interior finishes to larger professional customers and residential builders[2]. The company is scheduled to report results on 2026-11-18 for its fiscal 2026 third quarter, the 13 weeks beginning August 1, 2026 and ending in late October 2026 (2026 财年第三季度(2026 年 8 月 1 日起的 13 周,截至 2026 年 10 月下旬))[3], and Lowe's comparable sales are the number to read first. In the latest disclosed quarter, the second quarter ended July 31, 2026, sales rose 8.3% to $25.96 billion, but comparable sales grew only 0.2%, with average ticket up 2.3% and transactions down 2.1%[4]; gross margin was 33.04%, down 77 basis points from a year earlier[5], and adjusted diluted EPS was $4.40, including a $0.11 tariff refund benefit[1]. In August the company cut its full-year outlook to the bottom of the prior range: total sales of about $92 billion, roughly flat comparable sales and adjusted EPS of about $12.25[6]. Management guided third-quarter comparable sales in line with the flat full-year outlook and adjusted EPS about 7% below the prior-year quarter[7]. Analyst forecasts compiled by Drillr show an average third-quarter diluted EPS estimate of $2.87 from 19 analysts (range $2.81-$3.02) and an average third-quarter revenue estimate of about $22.38 billion from 17 analysts (range $22.15-$22.62 billion)[8].

Three things matter most in this report. The first is store transactions: first-half comparable sales grew only 0.4%[9], all of it from higher average ticket, and management attributed the transaction decline to weather-sensitive DIY seasonal and outdoor categories[10]; the third quarter falls after the weather-driven spring and summer peak, so it can test whether that explanation holds. The second is the Other segment made up of FBM and ADG: it posted second-quarter sales of $1.941 billion but operating income of just $3 million[11], and management said the two businesses are about 45% and 100% exposed to residential construction, respectively[12], so the third quarter can show where this business bottoms out while housing starts are weak. The third is the margin without tariff refunds: gross margin has already fallen about 70-80 basis points year over year for two straight quarters[13], net interest has risen with acquisition debt, and whether the company delivers its roughly 7% EPS decline depends on whether promotional and fuel cost pressure exceeds what it was in the first half.

Company Background and Business Structure

Lowe's stores and online channels serve three groups of customers: do-it-yourself (DIY) homeowners and renters, do-it-for-me (DIFM) homeowners who hire others to do the work, and small and mid-sized professional (Pro) customers, mainly tradespeople, repair and remodeling contractors and property managers[14]. A typical store stocks about 37,000 items across appliances, seasonal and outdoor living, lumber, lawn and garden, hardware, kitchen and bath, building materials, plumbing, paint, tools, electrical and flooring[15], and the average store had about 112,000 square feet of selling space at the end of fiscal 2025[16]. Marvin R. Ellison is chairman, president and CEO[17], and the company sold its Canadian retail business in 2022[18].

Two acquisitions in 2025 extended the company from store retail into building materials distribution. Lowe's closed its $1.3 billion acquisition of ADG on 2025-06-02; ADG designs, delivers and installs flooring, cabinets and countertops for national, regional and local residential builders and property managers. It then closed its $8.8 billion acquisition of interior building products distributor FBM on 2025-10-09[2]. The company positions both deals as a step in its Total Home strategy to serve larger Pro customers in residential and commercial markets[14], while it keeps expanding its Pro assortment, improving job site delivery and extending its Pro ordering aisle[19].

Starting in fiscal 2026, the company has only one reportable segment, Retail Home Improvement; FBM's ceilings and wall systems and commercial doors and hardware lines and ADG's interior finishes business fall below the reporting threshold and are combined in the Other segment[20]. In the second quarter, the retail segment's net sales were $24.015 billion, or 92.5% of consolidated revenue, made up of Hardlines at $7.952 billion, Home Décor at $7.817 billion, Building Products at $7.554 billion and other sales of $692 million; the Other segment contributed $1.941 billion, or 7.5%[21].

The company sources from suppliers worldwide, buys directly from manufacturers where it can, and owns and operates more than 120 supply chain facilities, including regional, flatbed, import and bulk distribution centers, cross-dock terminals and fulfillment centers[15]. Installation services are provided by a network of independent installers or through a third-party model[19], and FBM added a trade credit platform for contractors[2]. After the acquisitions, consolidated receivables rose from $320 million on August 1, 2025 to $1.238 billion on July 31, 2026[22].

Financial History and Current Position

Over the past three fiscal years, Lowe's revenue fell and then recovered, but its operating margin declined every year. Net sales were $86.377 billion in fiscal 2023, fell to $83.674 billion in fiscal 2024 and recovered to $86.286 billion in fiscal 2025, which ended January 30, 2026; over the same period the operating margin fell from 13.38% to 12.51% and then to 11.77%, and fiscal 2025 operating income was $10.153 billion, net earnings were $6.654 billion and diluted EPS was $11.85[23]. On the company's adjusted basis, fiscal 2025 EPS was $12.28[24].

Revenue growth in fiscal 2025 came mainly from acquisitions rather than store demand. Sales rose 3.1% for the year while comparable sales grew only 0.2%, driven by a 3.0% increase in average ticket and offset by a 2.8% decline in transactions; gross margin rose 16 basis points, but the SG&A expense rate rose 72 basis points[18]. The company recorded 780 million transactions with an average ticket of $106.13 for the year, and return on invested capital fell from 32.0% to 26.1%[16], while net interest was $1.406 billion[23].

Cash in fiscal 2025 went mainly to acquisitions and dividends, and buybacks nearly stopped. Operating cash flow was $9.864 billion, capital expenditures were $2.213 billion, dividends were $2.636 billion, and share repurchases fell from $3.929 billion in fiscal 2024 to $75 million[25]. To pay for FBM, the company issued $5.0 billion of unsecured notes and entered a $2.0 billion term loan maturing in October 2028, and it also repaid $2.5 billion of notes at maturity during the year[26].

The first quarter of fiscal 2026, ended May 1, 2026, continued the pattern of acquisition-driven revenue and declining margins. Quarterly sales were $23.1 billion, up 10.3%, and comparable sales grew 0.6%, with average ticket up 1.5% and transactions down 0.9%; gross margin was 32.7%, down 70 basis points[13]. Operating income was $2.554 billion for an operating margin of 11.07%, or 11.49% excluding $96 million of acquired intangible amortization[27]; diluted EPS was $2.90, adjusted EPS was $3.03, up 3.8%, and online sales grew 15.5%[17].

In the second quarter, ended July 31, 2026, the operating margin fell again from a year earlier. Quarterly sales were $25.956 billion, operating income was $3.549 billion and the operating margin was 13.67%[11], 81 basis points below the prior-year quarter, as gross margin fell 77 basis points, the SG&A expense rate improved 25 basis points and the depreciation and amortization rate rose 29 basis points[5]. Net earnings were about $2.4 billion, flat with the prior-year quarter, and diluted EPS was $4.27 in both periods[4]; adjusted EPS was $4.40, up 1.6%, including a $0.11 benefit from IEEPA tariff refunds[1]. The quarter's effective tax rate was 24.4%[28].

First-half operating cash flow fell short of last year, and debt began to come down. First-half operating cash flow was $7.009 billion, below $7.610 billion a year earlier, as inventory swung from a $1.173 billion release in the prior-year period to a $436 million build, partly offset by a $1.313 billion increase in accounts payable; over the same period capital expenditures were $1.063 billion, dividends $1.346 billion, debt repayments $2.397 billion and share repurchases $366 million[29]. As of July 31, 2026, the company held $3.172 billion of cash and $17.737 billion of inventory, and its long-term debt of $35.204 billion plus $2.352 billion of current maturities totaled $37.556 billion, while shareholders' equity was negative $7.437 billion[22].

Operating Model

Lowe's consolidated revenue is the sum of the retail segment and the Other segment, which in the second quarter was $24.015 billion plus $1.941 billion, or $25.956 billion[21]. Retail revenue roughly equals the prior-year base multiplied by one plus the comparable sales rate, plus new stores, and comparable sales depend on both transactions and average ticket: transactions reflect how often DIY customers visit and order, while average ticket reflects the Pro mix, project size, appliances and installation services, and price. Online sales count in comparable sales and added about 105 basis points to comparable sales in fiscal 2025, while acquired businesses are typically included only after they have been owned for more than 12 months[30]. Based on fiscal 2025 retail segment revenue of $84.078 billion, each 1 percentage point of comparable sales corresponds to about $840 million of annual revenue[31].

Other segment revenue depends on the volume of residential and commercial construction projects, and management said FBM is about 45% and ADG 100% exposed to residential construction[12]. Because the FBM acquisition did not close until 2025-10-09[2], last year's third quarter included only about three weeks of FBM results, so the year-over-year growth in third-quarter Other segment revenue will mainly reflect consolidation and cannot be treated as organic growth.

Operating income is also the sum of the two segments: in the second quarter, the retail segment earned $3.546 billion (a 14.77% margin) and the Other segment $3 million (a 0.11% margin)[11]. The retail margin depends on retail gross profit, meaning purchasing costs, tariffs, promotions, fuel and freight, shrink and credit revenue, minus store expenses that are mostly wages. At the consolidated level, the 10-Q attributes the 77 basis point drop in second-quarter gross margin to the operating cost structure of the acquired businesses and higher fuel costs, and the same cost structure lowered the SG&A expense rate by 25 basis points[9]; acquired intangibles add about $96 million of amortization each quarter[4], and acquisition debt has pushed net interest up to 1.44% of sales[5]. Changes in purchasing and tariff costs usually reach gross margin about one to two quarters later as inventory turns.

Retail cash flow is driven mainly by seasonal swings in inventory and payables, and in the first-half peak season a $1.313 billion increase in accounts payable offset the inventory build[29]. In fiscal 2025 the company funded capital expenditures and dividends from operating cash flow[25], while the FBM purchase relied mainly on new debt[26]; in fiscal 2026 the company is using operating cash flow to repay maturing bonds, buybacks are small and capital expenditures are capped at $2.5 billion[6], and management targets reducing adjusted debt to EBITDA to 2.75 times by mid-2027[7]. Deleveraging is therefore measured in years, and the third quarter can show only the direction.

The model has several clear gaps. The company does not disclose its Pro and DIY sales split, the revenue size of Home Services (installation services), the Other segment's gross margin or how acquisition amortization is allocated between segments, and its adjusted leverage measure cannot be recalculated from public data. As a result, macro variables such as interest rates, housing turnover and housing starts can be tested only indirectly through transactions, Other segment revenue and management commentary, not attributed directly.

Industry and Competitive Position

The home improvement market is highly fragmented, and demand is shaped by home price appreciation, the age of the housing stock, real disposable income, housing turnover and residential and commercial construction[14]. Management described home improvement pricing as historically rational and treated the July 2026 price war as an exception[10].

Lowe's strengths are concentrated in small and mid-sized Pro customers, appliances, online and installation services. In the second quarter, 9 of 13 product categories posted positive comparable sales, led by rough plumbing, electrical and tools and hardware[9]; appliances have grown comparable sales for 7 consecutive quarters and rough plumbing for 6[32], and the company offers next-day appliance delivery in most US zip codes[18]. Online sales grew 15.7% in the second quarter[1], and the Mylow AI assistant has answered more than 25 million questions, with online customers who use it converting at 3 times the rate of those who do not[32].

Lowe's weaknesses lie in discretionary DIY categories and the large Pro market. In July 2026, several competitors used IEEPA tariff refunds to run unprofitable promotions on seasonal items such as grills, patio furniture and live goods; Lowe's chose not to match them, and management views the pressure as transitory[10]. In the large Pro and builder market, Lowe's entered only by acquiring FBM and ADG, and that business earned close to nothing in the second quarter[11]. Public sources also lack comparable channel-level data for competitors, so share changes cannot be compared directly.

Core Debates

Lowe's DIY traffic is still falling; can Pro, online and home services hold fiscal third-quarter store comps around flat while protecting retail segment margins?

The retail segment sets Lowe's direction because it generates more than nine-tenths of revenue and nearly all operating income[11]. First-half comparable sales grew only 0.4%[9], transactions kept falling and all the growth came from average ticket; in August the company lowered its full-year comparable sales outlook from "flat to up 2%" to "roughly flat"[6] and said the third quarter would be in line with the full year[7]. The third quarter carries no tariff refund like the second quarter did and falls after the weather-sensitive spring and summer peak, making it a relatively clean quarter to test whether retail demand is stabilizing and whether cost savings can hold margins.

Current evidence shows average ticket rising while transactions shrink. Second-quarter comparable sales rose 0.2%, with average ticket up 2.3% and transactions down 2.1%[4]; first-quarter comparable sales rose 0.6% with transactions down 0.9%[13]; fiscal 2025 third-quarter comparable sales rose 0.4%, and full-year comparable sales rose 0.2% with transactions down 2.8%[18]. Retail segment operating income was $3.546 billion in the second quarter, a 14.77% margin, 18 basis points above the prior-year 14.59%[11], compared with 12.16% for full fiscal 2025[33]. The company said in its 10-Q that customers remained cautious and prioritized repair, maintenance and smaller projects[4], while management said on the call that the transaction decline was almost entirely in DIY seasonal and outdoor categories, caused by rain over Memorial Day weekend and drought in the South[10].

The company's explanation of the transmission chain is that high interest rates, weak housing turnover, fuel prices and economic uncertainty lead DIY homeowners to delay discretionary large projects and seasonal purchases[12], which lowers transactions, while repeat purchases by small and mid-sized Pros, appliance replacements, installation services and online orders raise average ticket and hold comparable sales near flat. The retail margin can stay flat only if savings from the Perpetual Productivity Improvement efficiency program offset wage and fuel costs[4]. An alternative explanation is that higher average ticket mainly reflects post-tariff price pass-through, that falling transactions reflect a cyclical contraction in DIY demand, and that part of the second-quarter retail margin improvement came from tariff refunds and credit revenue[9].

What remains unresolved is where the higher average ticket comes from and whether the DIY decline has bottomed, and the company does not disclose its Pro and DIY sales split. In the third quarter, the points to watch are whether comparable sales land near flat, whether the transaction decline narrows, whether online growth holds around 15%, how the retail segment operating margin and SG&A change year over year, and whether the full-year "roughly flat comparable sales" outlook is maintained. If transactions fall by more than 2.5% while average ticket keeps growing, comparable sales come in below −1.0%, or the retail segment operating margin falls more than 50 basis points year over year, the view that Pro and online are offsetting DIY would weaken.

Lowe's paid $10.1 billion for FBM and ADG, which lean heavily on residential construction; can the business hold its sales base and stay profitable in the fiscal third quarter while housing starts are weak?

FBM and ADG are the core of Lowe's push into large Pro customers and builders, and in the second quarter they contributed 7.5% of revenue and about 7.5 percentage points of the 8.3% consolidated revenue growth[21]. Yet the business earns almost nothing and pulls down consolidated gross margin[9]. When the company cut its full-year outlook in August, it explicitly named residential construction pressure on FBM and ADG as one of the reasons[7], so the third quarter will show directly where this business's sales and profit floor sits when demand is soft.

Other segment sales have held between $1.7 billion and $1.9 billion over two quarters, with profit hovering around breakeven. Second-quarter Other segment net sales were $1.941 billion and first-half sales were $3.695 billion, which implies $1.754 billion in the first quarter[21]; full fiscal 2025 sales were $2.208 billion[31]. Second-quarter operating income was $3 million, a 0.11% margin, compared with a $7 million loss (−5.61%) in the prior-year quarter, which included only about two months of ADG[11], and a $70 million loss (−3.17%) for full fiscal 2025[33]. The company said integration is progressing well and believes the two businesses will help Lowe's capture more planned spend from large Pros over the long term[4], but management also said high mortgage rates are suppressing housing starts and creating significant near-term demand pressure for FBM and ADG[12].

The transmission chain for this business starts with mortgage rates. High mortgage rates suppress housing starts and builder projects, which pressures ADG's flooring, cabinet and countertop installation volumes as well as shipments in FBM's ceilings and wall systems and commercial doors and hardware lines[20]; branch, fleet and staffing costs are relatively fixed, and with about $96 million of acquisition amortization each quarter[4], Other segment profit sits near breakeven while dragging on consolidated gross margin. An alternative explanation is that the thin Other segment profit mainly reflects amortization and allocated corporate costs, and that the distribution business itself earns a reasonable operating profit; because the company does not disclose how amortization is allocated between segments, the direction of third-quarter Other profit can only partly separate these two explanations.

This debate also carries a year-over-year comparison trap: last year's third quarter included only about three weeks of FBM, so the large year-over-year jump in third-quarter Other revenue cannot be treated as organic growth[2]. In the third quarter, the points to watch are whether Other segment sales hold the second-quarter level of about $1.9 billion, whether operating income stays positive, management's latest comments on residential and commercial construction demand, and whether acquisition adjustments remain limited to about $96 million of amortization. If Other sales fall below the first quarter's $1.75 billion, the operating loss exceeds $50 million, or integration, restructuring or impairment charges appear, the view that the business can hold breakeven despite soft demand would be overturned.

Tariff refunds propped up second-quarter profit; without them, can Lowe's keep its fiscal third-quarter margin decline and EPS drop within its roughly 7% guidance?

The third quarter is the first quarter after the tariff refund, so it can test whether margin pressure is only the expected dilution from the acquired business mix or whether new promotional and cost pressure has emerged. In August the company lowered full-year adjusted EPS guidance to about $12.25[6] and guided third-quarter adjusted EPS about 7% below the prior-year quarter[7]. At the same time, gross margin has fallen 70-80 basis points year over year for two straight quarters, acquisition debt has raised interest expense, and buybacks are small.

Second-quarter margin pressure came from both gross margin and interest. Gross margin was 33.04%, down 77 basis points, and 32.87% for the first half, down 74 basis points[5]; the 10-Q attributes the decline to the operating cost structure of the acquired businesses and higher fuel costs, partly offset by credit revenue and tariff refunds[9]. On an adjusted basis, second-quarter gross margin fell about 80 basis points and the adjusted operating margin was about 14.0%, down 62 basis points[32]. Net interest was $374 million, up from $313 million a year earlier, and $773 million for the first half versus $650 million a year earlier, with the increase coming mainly from the September 2025 debt issuance and the 2025 term loan[28]; adjusted EPS was $3.03 in the first quarter (+3.8%)[17] and $4.40 in the second quarter (+1.6%, including the $0.11 tariff refund)[1].

The pressure flows through a clear path: a rising share of lower-margin FBM and ADG distribution, high fuel and freight costs and competitors' seasonal promotions together push down consolidated gross margin, a lower SG&A expense rate offsets only part of it, and higher acquisition amortization and interest ultimately lower adjusted EPS from a year earlier. Management said fuel, transportation and energy costs will stay elevated in the second half[12], but considers the July competitive promotions transitory because competitors will not have additional tariff refunds to spend in the second half[10]. An alternative explanation is that promotional pressure carries into the third quarter and that fuel and other cost pressure outweighs savings from the efficiency program, making the gross margin decline larger than in the first half.

The interest line can be derived directly from guidance: full-year net interest guidance of about $1.6 billion[6], less $773 million in the first half, leaves about $830 million for the second half, or about $410 million per quarter. In the third quarter, the points to watch are whether adjusted EPS is about 7% below the prior-year quarter, the size of the gross margin decline and management's attribution among the acquired business mix, fuel and promotions, whether the SG&A expense rate keeps falling, whether net interest is near $410 million, and whether long-term debt keeps declining and the full-year outlook is maintained. If gross margin falls more than 100 basis points year over year, adjusted EPS drops more than 10%, or long-term debt rises again and the leverage target slips, the view that margin pressure is manageable would weaken.

Risks and Falsifiers

Tariffs and purchasing costs are the first risk, and they act directly on gross margin. The company sources from suppliers worldwide[15], so tariff changes affect merchandise costs and pricing; the IEEPA tariff refund in the second quarter added $0.11 per share and was a one-time benefit[1], the full-year outlook excludes any additional refunds in the second half[6], and competitors also received refunds and used them for promotions. Inventory stood at $17.737 billion on July 31, 2026[22], and changes in purchasing costs take roughly one to two quarters to reach gross margin. If the third-quarter gross margin decline does not widen and management reports no new tariff costs or price increases, this risk has not materialized.

The second risk is that discretionary DIY spending keeps shrinking under high interest rates and a weak housing market, leaving comparable sales dependent on average ticket and Pro. The retail segment generates about 92.5% of revenue[21], and based on fiscal 2025 retail segment sales of $84.078 billion, each 1 percentage point of comparable sales corresponds to about $840 million of annual revenue[31]. If the transaction decline narrows to within 1.5% and management reports a recovery in large DIY projects or seasonal categories, this risk view would be falsified.

The third risk is that weak residential construction persists, FBM and ADG project volumes decline, and the acquired business lingers near breakeven while continuing to dilute consolidated gross margin. Other segment sales were $3.695 billion in the first half[21]; after the acquisitions, goodwill on the balance sheet rose from $691 million on August 1, 2025 to $3.957 billion on July 31, 2026, and intangible assets rose from $976 million to $5.709 billion[22], with about $96 million of amortization each quarter[27]. If Other sales stay above $1.9 billion, the operating margin improves quarter by quarter and there is no impairment, this risk view would be falsified.

The fourth risk is that persistently high fuel and freight costs, combined with competitors' promotions, widen the gross margin decline while interest on acquisition debt puts double pressure on EPS. Based on second-quarter sales of $25.956 billion, each 10 basis points of gross margin is worth about $26 million of quarterly gross profit[11]; fiscal 2026 net interest guidance of about $1.6 billion[6] is above the $1.406 billion of fiscal 2025[23], and management said fuel and transportation costs will stay elevated in the second half[12]. If the third-quarter year-over-year gross margin decline narrows to within 74 basis points and management confirms the competitive promotions did not continue, this risk has not materialized.

What to Watch Next

• DIY traffic and retail margin: second-quarter comparable sales were +0.2% with transactions −2.1%; watch whether comparable sales are roughly flat and the transaction decline narrows. Transactions falling more than 2.5% or comparable sales below −1.0% would weaken the view.
• DIY traffic and retail margin: the retail segment operating margin was 14.77% in the second quarter versus 14.59% a year earlier; watch the year-over-year change and SG&A. A decline of more than 50 basis points would weaken the view.
• DIY traffic and retail margin: second-quarter online sales grew 15.7% and the full-year comparable sales outlook is roughly flat; watch whether online growth holds near 15% and the outlook stands. Another outlook cut would weaken the view.
• FBM and ADG: Other segment sales were $1.941 billion in the second quarter and $1.754 billion in the first; watch whether they hold near $1.9 billion. Sales below $1.75 billion would weaken the view.
• FBM and ADG: Other segment operating income was $3 million in the second quarter, with about $96 million of amortization each quarter; watch whether it stays positive and whether integration, restructuring or impairment charges appear. A loss above $50 million or an impairment would weaken the view.
• Margins and deleveraging: gross margin fell 77 basis points in the second quarter and 74 basis points in the first half; watch the size of the decline and its attribution. A decline above 100 basis points would weaken the view, and narrowing to within 74 basis points would strengthen it.
• Margins and deleveraging: management guided adjusted EPS about 7% lower, after $4.40 (+1.6%) in the second quarter; watch whether it lands near −7%. A drop of more than 10% would weaken the view.
• Margins and deleveraging: second-quarter net interest was $374 million and long-term debt totaled $37.556 billion; watch whether net interest is about $410 million and debt keeps falling. Higher debt or a delayed leverage target would weaken the view.

Conclusion

Lowe's business runs on two engines: retail stores that generate 92.5% of revenue and rely on small and mid-sized Pros, appliances, online and installation services to lift average ticket and offset falling DIY transactions, and the newly acquired FBM and ADG, which take the company into the residential builder and large Pro markets but contributed only $3 million of operating income in the second quarter[11]. Financially, the company generated $7.009 billion of operating cash flow in the first half[29], carries $37.556 billion of total long-term debt with negative shareholders' equity[22], and guides full-year adjusted EPS to about $12.25[6]. The central unresolved relationship is whether falling transactions, gross margin dilution from the acquired business mix, and fuel and promotional pressure can be offset by higher average ticket, cost savings and deleveraging.

After the second-quarter results, the analyst reactions available were mainly brokers adjusting their views on the stock, and the rest were news reports restating company statements; none offered an independent assessment that substantively argued any of the three debates above. Outside views are therefore not compiled here, and scattered opinions are not treated as a market view; readers need to test the company's own explanations directly against the third-quarter disclosure.

If third-quarter comparable sales hold roughly flat, the transaction decline narrows, the retail segment margin is roughly flat year over year, Other segment sales hold near $1.9 billion with a profit, the adjusted EPS decline lands near 7%, and long-term debt keeps falling, the current understanding would be strengthened. Conversely, if transactions fall by more than 2.5%, gross margin drops more than 100 basis points, the Other segment swings to a clear loss or an impairment appears, any two of these occurring together would materially weaken that understanding.

Sources

[1] LOW 8-K filed 2026-08-19 · Q2 fiscal 2026 results · 2026-08-19 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000060667&type=8-K&dateb=&owner=include&count=40

[2] LOW 10-K filed 2026-03-23 · FBM and ADG acquisitions · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[3] Drillr earnings calendar LOW frozen 2026-11-05 · 2026-11-05 · Drillr earnings calendar

[4] LOW 10-Q filed 2026-08-27 · Q2 fiscal 2026 executive overview · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[5] LOW 10-Q filed 2026-08-27 · Q2 fiscal 2026 percent of sales · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[6] LOW 8-K filed 2026-08-19 · updated fiscal 2026 outlook · 2026-08-19 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000060667&type=8-K&dateb=&owner=include&count=40

[7] LOW Q2 fiscal 2026 earnings call 2026-08-19 · 2026-08-19 · earnings-call · https://gateway.drillr.ai/mcp/private

[8] Drillr analyst estimates LOW Q3 fiscal 2026 retrieved 2026-11-05 · 2026-11-05 · Drillr 分析师预测汇总 · https://gateway.drillr.ai/mcp/private

[9] LOW 10-Q filed 2026-08-27 · Q2 fiscal 2026 results of operations · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[10] LOW Q2 fiscal 2026 earnings call 2026-08-19 · analyst Q&A · 2026-08-19 · earnings-call · https://gateway.drillr.ai/mcp/private

[11] LOW 10-Q filed 2026-08-27 · Q2 fiscal 2026 segment operating income · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[12] LOW Q2 fiscal 2026 earnings call 2026-08-19 · risks · 2026-08-19 · earnings-call · https://gateway.drillr.ai/mcp/private

[13] LOW Q1 fiscal 2026 earnings call 2026-05-20 · 2026-05-20 · earnings-call · https://gateway.drillr.ai/mcp/private

[14] LOW 10-K filed 2026-03-23 · customers and market · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[15] LOW 10-K filed 2026-03-23 · products and supply chain · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[16] LOW 10-K filed 2026-03-23 · other operating metrics · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[17] LOW 8-K filed 2026-05-20 · Q1 fiscal 2026 results · 2026-05-20 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000060667&type=8-K&dateb=&owner=include&count=40

[18] LOW 10-K filed 2026-03-23 · fiscal 2025 results of operations · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[19] LOW 10-K filed 2026-03-23 · Total Home strategy · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[20] LOW 10-Q filed 2026-08-27 · Other segment composition · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[21] LOW 10-Q filed 2026-08-27 · Q2 fiscal 2026 net sales by division and segment · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[22] LOW 10-Q filed 2026-08-27 · balance sheet at July 31, 2026 · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[23] LOW 10-K filed 2026-03-23 · consolidated statements of earnings · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[24] LOW 10-K filed 2026-03-23 · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[25] LOW 10-K filed 2026-03-23 · cash flows · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[26] LOW 10-K filed 2026-03-23 · debt financing · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[27] LOW 8-K filed 2026-05-20 · Q1 non-GAAP reconciliation · 2026-05-20 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000060667&type=8-K&dateb=&owner=include&count=40

[28] LOW 10-Q filed 2026-08-27 · interest and tax · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[29] LOW 10-Q filed 2026-08-27 · cash flows · 2026-08-27 · 10-Q · https://www.sec.gov/Archives/edgar/data/60667/000006066726000117/

[30] LOW 10-K filed 2026-03-23 · comparable sales definition · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[31] LOW 10-K filed 2026-03-23 · net sales by division and segment · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/

[32] LOW Q2 fiscal 2026 earnings call 2026-08-19 · segment performance · 2026-08-19 · earnings-call · https://gateway.drillr.ai/mcp/private

[33] LOW 10-K filed 2026-03-23 · segment operating income · 2026-03-23 · 10-K · https://www.sec.gov/Archives/edgar/data/60667/000006066726000029/