Lowe’s Forecasts Flat to 2% Sales Growth, Shares Fall 2.7%

Khac Phu Nguyen

Thu, February 26, 2026 at 2:57 AM GMT+9 2 min read

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This article first appeared on GuruFocus.

Lowe’s (NYSE:LOW) is signaling that the housing recovery many investors have been waiting for could take longer to materialize. While the company delivered fourth-quarter comparable sales and adjusted earnings ahead of estimates for the period ended Jan. 30, its full-year outlook landed softer than expected. Management projected comparable sales to range from flat to up 2% year over year, with the midpoint below what Wall Street had modeled. Shares fell 2.7% at 9:33 a.m. Wednesday in New York, even after the stock had gained about 16% this year, outperforming the S&P 500 Index.

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Chief Executive Officer Marvin Ellison told analysts that the company’s outlook for 2026 remains cautious given persistent volatility in the housing macro environment. He pointed to ongoing pressure on big-ticket, discretionary DIY projects, as many consumers remain hesitant to commit to large home investments. Elevated borrowing costs and a continued lock-in effect, with homeowners reluctant to give up lower mortgage rates, are keeping housing turnover under strain. At the same time, Americans remain concerned about inflation, job losses and broader economic uncertainty, often prioritizing essential purchases or smaller refresh projects over major remodels or moves.

There are early signs that conditions could improve. US mortgage rates have been declining in recent months, and median home prices are staying relatively flat, developments that could help reinvigorate housing activity if sustained. Lowe’s comparable sales growth again outpaced Home Depot’s (NYSE:HD), supported by demand in smaller project categories such as plumbing and paint, while larger discretionary categories remain softer. Home Depot has guided for comparable sales growth of up to 2% this year and said customers are not broadly trading down outside select areas like appliances and countertops. Against this backdrop, Lowe’s eliminated 600 corporate and support roles and awarded $125 million in bonuses to front-line workers, while continuing to emphasize professional customers and e-commerce as strategic priorities during a prolonged slowdown that is unfolding alongside renewed tariff uncertainty after the Supreme Court struck down President Donald Trump’s global levies and he pledged new tariffs.

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