The news: Lowe’s investments in its pro business and ecommerce operations helped it deliver better-than-expected Q1 2026 results despite a sluggish housing market weighing on DIY demand.

The numbers:

• Adjusted EPS was $3.03, up 3.8% and slightly above expectations of $2.97.
• Net sales rose 10.3% YoY to $23.1 billion, ahead of the $22.9 billion estimate.
• Online sales increased 15.5%.
• Comp sales rose 0.6%, just below the 0.7% expected.

Despite growing macro headwinds, the retailer maintained its full-year guidance of flat to 2% comp sales growth.

The context: Lowe’s has spent the past few years building out its pro business to target small and midsize contractors, who are less sensitive to housing turnover than DIY consumers.

• Acquisitions of Foundation Building Materials for $8.8 billion and Artisan Design Group for $1.33 billion expanded its capabilities.
• Updates to its MyLowe’s Pro Rewards program—offering simpler redemptions and 5% daily savings for cardholders—aim to deepen loyalty.
• New tools are also reducing friction: For example, Lowe’s materials list tool allows pros to upload lists in various formats and quickly convert them into actionable quotes, saving time and streamlining workflows.

Implications for retailers: Early returns on Lowe’s pro strategy are encouraging, but the investments come with near-term trade-offs.

The acquisitions are weighing on margins. While FBM’s commercial exposure has helped offset weakness in residential construction, ADG remains tied to new homebuilding, which is still depressed. Together, the two businesses diluted Lowe’s gross margin by 70 basis points in Q1. While Lowe’s is betting long-term housing demand—estimated at 12 million new homes by 2033—will justify the investment, in the near term, these assets are a cost to carry.

At the same time, digital investments are showing clearer payback. Mylow, Lowe’s AI virtual assistant, now handles more than 1 million monthly inquiries, and users convert at three times the rate of non-users. And its sister tool, Mylow Companion, which assists store associates, is improving the in-store experience.

If the company can balance those near-term pressures, these investments should help Lowe’s emerge from the housing downturn with a structurally stronger, more resilient business.

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