Lowe’s Q1 Preview: Focus on Comparable Sales

Lowe’s (NYSE:LOW) is set to announce first quarter earnings on Tuesday, and investors will watch out for the company’s comparable sales to get a sense of the housing market.

Wall Street expects the North Carolina-based company to post EPS of $2.88, implying a fall of 21.5%, while revenue is expected to decline 2% to $20.97 billion during the quarter.

Home improvement retailers are facing pressure due to sluggish demand and higher borrowing costs amid economic tariff uncertainty, making consumer cautious about spending.

Lowe’s earnings report comes a day after bigger rival Home Depot (HD) reported positive U.S. comparable sales amid tariff uncertainty.

The company, earlier in February, outlined expectations for Q1 2025 comparable sales to be approximately 200 basis points below the full-year guidance due to seasonal shifts and incremental wage actions.

Morgan Stanley said the market is expecting Lowe’s to report -3% comparable sales versus -2% consensus mainly due to lower traffic, implying a ~100 bps deceleration on a 2-year stack.

“We think the market is expecting a Q1’25 comp & EPS miss,” said Morgan Stanley analyst Simeon Gutman, adding that, “Even if comps and EPS miss in Q1’25, we think it is too early for LOW to change its ’25 guidance.”

Investors will also look forward to the company’s commentary about housing market’s recovery prospects and on ongoing tariff uncertainty.

“Despite our increasing enthusiasm for the home improvement category’s prospects and the potential for both to capitalize on tariff disruption/inflation, we believe a wait-and-see approach remains appropriate,” noted Stifel.

Over the last two years, LOW has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.

Over the last three months, EPS estimates have not seen any upward revisions versus 23 downward moves. Revenue estimates have seen one upward revision against 19 downward moves.

Lowe’s stock lost nearly 5% so far this year, compared to the 1.4% rise in the broader S&P500 Index.

Seeking Alpha’s Quant Rating and Seeking Alpha analysts are cautious and rated the company as a Hold. Wall Street analysts are still bullish and rated the stock a Buy.