---
layout: post
title: "Lowe's Beat Expectations, But the Housing Market Still Isn't Cooperating"
description: "Lowe's crushed earnings but warned of flat demand ahead. Here's what it means for the home improvement industry."
date: 2026-02-25 00:00:25 +0530
author: adam
image: 'https://images.unsplant.com/photo-1768622180477-5043d6dcdfcc?q=80&w=2070'
video_embed:
tags: [news, business]
tags_color: '#4caf50'
---
Lowe's just reported earnings that should've sent Wall Street into a frenzy. They topped revenue and earnings expectations, posted double-digit sales growth year over year, and beat comparable sales forecasts. So why did their stock drop more than 4% in midday trading? Because sometimes beating the quarter isn't enough when the future looks murky.
CEO Marvin Ellison was refreshingly honest about it in his CNBC interview. The company's outlook for the full year is "appropriately conservative," he said, because they're dealing with a "very fluid and very unpredictable environment." Translation: nobody really knows what's coming next.
## The Lock-In Effect Is Real
Here's the thing about the housing market right now. We've got people sitting tight in their homes because they're locked into mortgage rates around 2.5% or 3%. They're not selling. They're not buying. They're definitely not doing those expensive kitchen renovations or deck additions that used to drive <a href="https://infeeds.com/tags/?tag=business">business</a> for retailers like Lowe's and Home Depot.
"The greatest fuel for the home improvement industry is when you decide to put your house on the market," Ellison explained. Once that for sale sign goes up, people immediately start fixing their yard, repainting walls, and doing all those quick beautification projects. But with higher inflation, economic uncertainty, and those sky-high mortgage rates, that market activity has basically stalled.
It's not that people don't want to improve their homes. They're just rationing where they spend their money, and the big-ticket discretionary stuff is getting pushed down the priority list.
## Where Lowe's Is Actually Winning
The company's strategy of doubling down on do-it-yourself customers and home professionals is paying off. Their fourth quarter results showed growth in plumbing supplies like water heaters, millwork for windows and doors, and paint sales. Nine out of their 14 merchandising categories posted growth.
What's interesting is that pros are becoming increasingly important to their playbook. Lowe's acquired Foundation Building Materials for about $8.8 billion last year and picked up Artisan Design Group for $1.33 billion. These deals weren't random. Contractors, electricians, and roofers tend to be steadier customers than homeowners shopping on a budget during uncertain times.
The company's also gotten creative with how they reach customers. They launched a third-party marketplace to expand product selection, tapped influencers for social media visibility, and relaunched their kids' program to connect with younger families. Digital experiences got better, delivery options became more flexible, and installation services expanded. That's not flashy stuff, but it apparently resonates with people.
## The Tariff Wildcard Nobody Wanted
Just when things seemed stable, the Supreme Court ruled that some country-specific tariffs were illegal. Then President Trump announced a global 10% duty with hints it could go higher.
For Lowe's, about 40% of their goods are imported. That's lower than it used to be, but it's still a significant chunk of their inventory. The company says they've gotten sharper with their tariff playbook over the years, but calculating cost shifts when the rules keep changing is basically a moving target nobody wants to chase.
## The Real Question Hanging Over Everything
Both Lowe's and Home Depot reported results that basically confirm what we already suspected. Consumers are staying put. Big projects are getting delayed. The industry is bracing for roughly flat demand this year.
But here's what's actually worth watching. Ellison mentioned two changes that could meaningfully move the needle. First, a pickup in home sales. That seems unlikely in the near term unless mortgage rates drop significantly. Second, an increase in home equity line of credit usage.
That second one is interesting. Homeowners might decide they're never giving up their low fixed rates, so why not tap the equity they've built up in their homes and finally do that kitchen renovation or basement finish? That could unlock a different kind of demand that doesn't depend on people actually moving.
The stock market clearly didn't love the guidance Lowe's gave for the year. Earnings per share came in below analyst expectations at $12.25-$12.75 versus the consensus of $12.95. But sometimes being conservative and preparing for uncertainty is smarter than chasing optimism that nobody can really justify right now.
So the question becomes: will homeowners eventually realize they're better off investing in their current home than sitting on the sidelines waiting for a market that might not materialize?
