Against a challenging backdrop, Lowe’s (LOW) is focusing on these two pillars of its strategy

Shares of Lowe’s Companies, Inc. (NYSE: LOW) were down over 1% on Thursday. The stock has dropped 8% over the past three months. The company saw sales and earnings decline in the first quarter of 2025 compared to the previous year as it operates in a difficult environment. Against this backdrop, the home improvement retailer is focusing on the areas of its business where it is seeing growth.

Q1 performance

In the first quarter of 2025, Lowe’s net sales decreased 2% year-over-year to $20.9 billion. Comparable sales were down 1.7%. Earnings per share fell 5% YoY to $2.92. The quarterly results were impacted by continued pressure in DIY bigger ticket discretionary demand, and a slower start to spring as many regions across the country experienced adverse weather in February. As the weather normalized, the company saw demand pick up for its spring assortment.

Key pillars

As it navigates a challenging housing market, Lowe’s aims to drive sales growth by focusing on two key pillars of its Total Home Strategy, which are accelerating its Pro and online growth. In Q1, sales in the Pro segment saw mid-single-digit growth.

The company recorded positive comp sales in categories like roofing, drywall, and plumbing. However, bigger ticket project spend in categories like flooring, and kitchens and bath remain pressured as customers are delaying large purchases. On its earnings call, Lowe’s mentioned that despite their healthy project backlogs, Pro customers remain cautious due to the macroeconomic uncertainty.

Lowe’s has been investing significantly in expanding product and service offerings for its Pro customer. It has been working on improving its assortment, simplifying order and delivery options, and offering a competitive loyalty program. Alongside serving the small to medium Pro customer, the company is now looking to engage with larger Pro customers. As part of these efforts, Lowe’s is acquiring Artisan Design Group, or ADG, which helps with the design and installation of flooring, countertops, and cabinets.

ADG serves homebuilders as well as property managers. This acquisition is anticipated to help Lowe’s increase its penetration of Pro planned spend and gain share in a highly fragmented $50 billion market. As mentioned on the call, new home construction is expected to be a major driver of Pro planned spend over the next decade as it is estimated that the US will need 18 million homes by 2033.

The second pillar is driving online sales growth. In Q1, online sales rose 6%, driven by increases in traffic and conversion rates. Lowe’s continues to invest in improving its online capabilities by offering a broader assortment and more value to customers on its online marketplace. The company is also investing in AI capabilities that provide customers with instructions on home improvement projects as well as help them find the right tools and materials for those projects.

Outlook

For fiscal year 2025, Lowe’s expects total sales of $83.5-84.5 billion. Comparable sales are expected to be flat to up 1% compared to last year. EPS is expected to be $12.15-12.40.