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Lowe’s reported a strong finish to its fiscal fourth quarter, surpassing Wall Street expectations on both revenue and earnings, yet CEO Marvin Ellison cautioned that the broader housing market continues to weigh on demand. The retailer posted over 10% year-over-year sales growth, driven by gains with professional contractors, online channels, and home services, even as U.S. consumers remain reluctant to buy or sell homes amid high mortgage rates and economic uncertainty.

Quarterly performance highlights

For the three months ending Jan. 30, Lowe’s revenue climbed to $20.58 billion, exceeding analysts’ estimates of $20.34 billion. Adjusted earnings per share came in at $1.98, above the projected $1.94. Net income, however, dropped to $999 million, or $1.78 per share, from $1.13 billion, or $1.99 per share in the same period last year, reflecting one-time costs linked to recent acquisitions.

Comparable store sales rose 1.3%, outperforming the 0.2% analysts had forecast, with notable strength in nine of 14 merchandising categories, including plumbing supplies, millwork, and paint. Executives credited the growth to a combination of digital enhancements, flexible delivery options, and expanded installation services.

Full-year outlook and industry context

Looking ahead, Lowe’s expects total sales for the full fiscal year to range between $92 billion and $94 billion, representing roughly 7% to 9% growth over last year. Adjusted earnings per share are projected between $12.25 and $12.75, slightly below analysts’ consensus of $12.95. Comparable sales are anticipated to be flat to up 2%.

Ellison emphasized that the home improvement market faces a “lock-in effect,” with many homeowners hesitant to move due to elevated mortgage rates and inflation. He noted that home improvements often accelerate when consumers list their properties, a dynamic that has slowed in the current environment.

Strategic moves to capture demand

To offset housing market pressure, Lowe’s has been investing in professional services and digital capabilities. Recent acquisitions include Foundation Building Materials, a distributor of drywall, insulation, and other interior construction materials, for $8.8 billion, and Artisan Design Group, which provides flooring, cabinet, and countertop design and installation services, for $1.33 billion.

Lowe’s has also expanded its third-party marketplace, launched influencer campaigns to reach younger families, and relaunched its kids’ program to drive engagement among new homeowners. The company is focusing on “pros,” or contractor customers, who provide steadier demand than DIY consumers alone.

Industry-wide challenges

Like rival Home Depot, Lowe’s continues to navigate uncertain economic conditions, including fluctuating tariff policies. About 40% of Lowe’s merchandise is imported, and new duties could affect costs, though Ellison emphasized the company’s existing tariff strategies have improved in recent years.

Employment changes have also been part of the strategy to improve operational efficiency. Lowe’s recently cut roughly 600 corporate and support positions, while Home Depot laid off 800 workers and reinstated full-time office requirements.

Stock performance and market sentiment

Despite macroeconomic headwinds, Lowe’s shares have risen nearly 16% year to date, outpacing the S&P 500’s 1% gain over the same period. Over the past 12 months, Lowe’s stock has appreciated approximately 15%, almost matching the S&P 500’s 16% growth.

Ellison said the company is closely monitoring discretionary spending trends, noting that any uptick in larger home improvement projects or increased use of home equity lines of credit could signal a rebound in consumer confidence. “As homeowners realize they may not give up low mortgage rates, we expect investment in their homes to grow,” he said, highlighting the potential for future market recovery.