Lowe's Stock: Is LOW Underperforming the Consumer Cyclical Sector?

Mortgage rates hit a 1-year high at 6.71%, driven by Treasury bond sell-offs and rising yields. Lowe's (LOW) cut its 2026 sales and margin forecasts, citing macro pressures. Home Depot (HD) reaffirmed its outlook but noted housing market pressures. Both companies' stocks could benefit from lower interest rates.

Mortgage rates hit a one-year high at 6.71%, driven by a Treasury bond sell-off. Lowe's (NYSE:LOW) lowered its full-year outlook, expecting $92B in sales and adjusted EPS of $11.75. Home Depot (NYSE:HD) reaffirmed its outlook but noted housing market pressures. Both companies are impacted by high interest rates, which affect homebuilding and improvement projects. Their stocks trade at lower forward earnings multiples, with Lowe's yielding 2.4% and Home Depot 2.9%.

Lowe’s (LOW) reported Q2 sales of $26B, up 8.3% YoY, but comparable sales rose just 0.2%. Pro contractor and online sales grew, while DIY shoppers spent less. The company lowered full-year guidance to $92B in sales and $12.25 EPS. Online tools and loyalty programs drove growth, but margins slipped due to higher costs. Inventory and debt levels also increased.

Home Depot (HD) reported 1.7% comp growth, reaffirming its full-year guidance, while Lowe's (LOW) cut its outlook to the low end with just 0.2% comps. HD's revenue was $47.86B, driven by Pro sales, while LOW's $25.96B revenue relied on recent acquisitions. Housing starts fell 12.4% in July, impacting both companies differently.

Lowe's (LOW) reported Q2 2027 revenue of $26 billion, up 8.3% YoY, with adjusted EPS of $4.40. Comparable sales rose 0.2%, driven by Pro, Online, and Home Services, offset by DIY spending pressure. Online sales grew 15.7%. Adjusted operating margin decreased 62 bps to 14%. Inventory increased $1.4 billion. Free cash flow was $3.1 billion. Full-year sales guidance was updated to $92 billion, with adjusted EPS guidance lowered to $12.25. Management cited elevated fuel and transportation costs and

Lowe's (NYSE:LOW) reported Q2 sales of $25.96B (+8.3% YoY), with organic comparable sales up 0.2%. Earnings per share were $4.27, beating estimates. The company cut its full-year sales forecast to $92B, expecting flat comparable sales. Pro, online, and home services growth offset weak DIY spending and housing trends. Shares closed 2.0% higher on August 19.