Lowe’s reported strong financial performance for the second quarter of FY25, alongside entering into a definitive agreement to acquire Foundation Building Materials (FBM) for approximately $8.8 billion.
The home improvement retailer posted quarterly total revenue of around $24 billion, driven by steady growth, including a 1.1 per cent increase in comparable-store sales. Net income rose to $2.4 billion, reflecting enhanced operational efficiency and robust demand from both DIY customers and professional contractors.
As of August 1, Lowe’s operated 1753 stores, encompassing 195.5 million square feet of retail selling space.
“Despite challenging weather early in the quarter, our teams drove both sales growth and improved profitability,” said Marvin R Ellison, Lowe’s chairman, president and CEO.
“In June, we closed on the acquisition of ADG, which strengthens our ability to capture a greater portion of Pro planned spend and expands our reach into the new home construction market.”
In a significant strategic move, Lowe’s also announced plans to acquire Foundation Building Materials, a leading North American distributor of interior building products, including drywall, insulation, and metal framing, with more than 370 locations serving professional contractors across the US and Canada.
This acquisition is expected to strengthen Lowe’s position in the professional market, complement its current portfolio, and drive future revenue growth. The transaction is anticipated to close in the fourth quarter of this year, pending regulatory approval.
“With this acquisition, we are advancing our multi-year transformation of the Pro offering,” said Ellison. “It allows us to serve the large Pro planned spend within a $250 billion total addressable market and aligns perfectly with our Total Home strategy.”
Looking ahead, Lowe’s raised its full-year 2025 net sales forecast to a range of $84.5 billion to $85.5 billion, with comparable sales expected to be flat to up 1 per cent compared to the previous year.
Market context: The pro segment becomes the new playground
Neil Saunders, MD of GlobalData, views Lowe’s results as “very solid”, especially given a relatively soft housing market where transactions fell 1.9 per cent this quarter. He notes that Lowe’s performance signals that the home improvement market may have hit bottom, with early signs of recovery driven largely by smaller DIY projects like light decoration and gardening, areas where Lowe’s has traditionally performed well.
However, Saunders points out that in the professional contractor space, Lowe’s still trails rival Home Depot.
“Among the highest spending professional groups, Home Depot remains the destination of choice because it is still perceived to be more convenient, sharper on price, more reliable, and to carry a wider range,” he said.
Lowe’s recent acquisitions, including Artisan Design Group and now Foundation Building Materials, represent a deliberate push to build a more comprehensive pro offering.
According to Saunders, both Home Depot and Lowe’s are shifting focus to the pro market because growth in the consumer home improvement segment is limited and highly competitive, dominated by just two major players. With organic growth slow and market share gains difficult, the pro market offers greater opportunity due to its large size, fragmentation, and openness to disruption.
“Naturally, with two big giants in the arena, there are likely to be some bruising battles ahead. However, at this stage, we believe the market is big enough and fragmented enough to allow both players to extract some wins,” he explained.
