Lowe's delivered a solid QQ2 2025 performance, with revenue of $23.959 billion, up 1.58% year over year and QoQ growth of 14.47%. Gross profit of $7.644 billion yielded a gross margin of 31.9%, while operating and net margins stood at 14.48% and 10.00%, respectively. Diluted EPS was $4.27, with reported EPS of $4.28. EBITDA reached $4.025 billion, underscoring a structurally cash-generative core. The quarterly cash flow profile was robust: net cash provided by operating activities of $4.231 billion and free cash flow of $3.736 billion, supporting a dividend payout of $645 million and modest share repurchases, while capital expenditure was restrained at $495 million as management prioritizes deleveraging and selective investments.
From a balance sheet perspective, Lowe's maintains a large asset base but carries a heavy debt burden. Total debt stood at $39.06 billion with cash and cash equivalents of $4.86 billion, leaving net debt of approximately $34.2 billion. Total liabilities were $58.01 billion against total assets of $46.61 billion, resulting in negative shareholders’ equity of about -$11.4 billion. Liquidity metrics show a current ratio just over 1.0 (1.05), a quick ratio of 0.29, and a cash ratio of 0.23, signaling leverage risk amidst inventory levels of $16.34 billion and days inventory outstanding of about 90.2 days. The company’s stated valuation metrics show a circa 13.2x trailing P/E, a P/S around 5.3x, and a negative price-to-book given the negative equity, highlighting a balance-sheet-driven discount to book value despite solid cash generation.
Looking ahead, management did not publish explicit quantitative guidance in the provided data. The near-term outlook is linked to housing market dynamics, consumer confidence, and channel mix evolution (notably pro and omnichannel growth). The company’s cash flow generation provides a meaningful buffer for deleveraging; however, the high indebtedness and negative equity remain key risks. The investment outlook remains cautiously constructive, contingent on the pace of deleveraging, margin resilience, and sustained demand in home improvement spending.