Lowe's outlined its growth strategy and outlook at the Goldman Sachs Global Consumer and Retail Conference on Tuesday, projecting flat to low single-digit growth for the second half of 2026 while emphasizing that its acquisition pipeline and digital capabilities position it well for when the housing market recovers.
The company reported five consecutive quarters of positive comparable-sales growth and noted that digital sales expanded more than 15% in each of the last two quarters. Approximately 60% to 80% of its online orders are now fulfilled directly from stores, depending on category and season. Its "Mylow" AI assistant has fielded over 25 million customer and associate questions, with customers using the tool converting at three times the rate of non-users and associates seeing a 200-basis-point improvement in customer satisfaction scores.
Lowe's Chairman and CEO Marvin Ellison pointed to significant headroom in the roughly $1 trillion U.S. home-improvement market, in which the combined share of Lowe's and its largest competitor accounts for only about 25%. The company operates 1,750 stores across the United States and provides same-day and next-day major appliance delivery and installation in virtually every U.S. zip code.
Two recent acquisitions — Artisan Design Group and Foundation Building Materials — were central to the company's expansion narrative. Ellison said they open access to approximately $250 billion in additional market opportunity across residential and commercial construction. ADG focuses on flooring, countertops and cabinets for residential builds, while FBM, about 55% of whose revenue comes from commercial construction including data centers, sports venues, hotels and university projects, supplies drywall, ceiling systems and insulation.
"For a builder, the key metric that you want is, can I build a structure faster? Can I get to closing sooner? Because the sooner you get to closing is the sooner you get paid," Ellison said.
Housing supply constraints could provide a longer-term tailwind. The U.S. is currently about one million homes short of current demand, and estimates call for roughly 14 million new homes over the next decade. Ellison, who joined Lowe's in 2018, said he believes the company will be "in one of the most advantageous positions of any retailer in this space" when the market recovers. He also noted that the second quarter of 2024 marked the most promotional period he had seen in his 25 years in home improvement, driven by tariff refunds.
Lowe's serves homeowners with average household incomes above $100,000 and average personal equity of roughly $400,000, with DIY customers accounting for more than 60% of sales. The company runs separate loyalty programs for DIY and Pro customers.
On capital allocation, Lowe's is targeting a leverage ratio of 2.75x, expected to be reached around the middle of next year. The company has raised its dividend for 43 consecutive years, maintaining Dividend Aristocrat status, with a current yield of 2.52%, and has not cut its dividend in 56 consecutive years.
