Lowe’s Companies, Inc. (NYSE:LOW) beat Wall Street estimates for first-quarter earnings and revenue, but the stock traded lower after the results on Wednesday.

Investors remained cautious about the home improvement sector amid a sluggish housing market, elevated interest rates and softer discretionary spending on large renovation projects.

The home improvement retailer reported first-quarter fiscal 2026 adjusted EPS of $3.03, beating analyst estimates of $2.97, while revenue of $23.1 billion topped estimates of $22.98 billion.

Diluted EPS was $2.90, compared with $2.92 a year earlier, while net earnings totaled $1.6 billion.

Sales Growth And Operating Performance

Sales rose from $20.9 billion a year earlier, while comparable sales increased 0.6%, marking Lowe’s fourth consecutive quarter of positive comp growth.

The company cited strong spring execution, 15.5% growth in online sales, and continued strength in Pro sales, appliances, and home services.

Lowe’s recorded $96 million in pre-tax acquisition-related expenses tied to Foundation Building Materials and Artisan Design Group.

Gross margin fell to 32.68% from 33.38%, while operating margin declined to 11.07% from 11.92%.

“Strong spring execution and continued momentum in Pro, Appliances, Online, and Home Services supported a solid start to the year as we delivered our fourth consecutive quarter of positive comp sales,” said Marvin R. Ellison, Lowe’s chairman, president, and CEO.

“In spite of a challenging housing macro, we remain focused on advancing our Total Home strategy to provide the best experience for our customer.”

Cash Flow And Capital Allocation

Lowe’s generated $3.35 billion in operating cash flow during the quarter and spent $521 million on capital expenditures.

Cash and cash equivalents fell to $786 million from $3.05 billion a year earlier, while long-term debt increased to $36.75 billion from $30.54 billion.

The company paid $674 million in dividends and repurchased $363 million in shares during the quarter.

Lowe’s operated 1,759 stores with 196 million square feet of retail selling space as of May 1, 2026.

Fiscal 2026 Outlook

Lowe’s affirmed its fiscal 2026 outlook, forecasting sales of $92 billion to $94 billion, in line with analyst estimates of $93.25 billion. The company expects comparable sales ranging from flat to up 2%.

Lowe’s projected fiscal 2026 GAAP EPS of $11.75 to $12.25, below analyst estimates of $12.44, while adjusted EPS guidance of $12.25 to $12.75 brackets estimates of $12.60.

The adjusted outlook excludes an expected $0.50 after-tax impact from acquisition-related intangible amortization.

The company cited risks from inflation, tariffs, trade policy changes, housing market conditions, labor disruptions, and broader macroeconomic pressures.

LOW Price Action: Lowe’s Companies shares were down 1.21% at $215.73 during premarket trading on Wednesday, according to Benzinga Pro data.

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