Item 1. Financial Statements

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Item 1. Financial Statements

Lowe’s Companies, Inc.

Consolidated Statements of Earnings (Unaudited)

In Millions, Except Per Share and Percentage Data


	Three Months Ended								Six Months Ended
	August 1, 2025				August 2, 2024				August 1, 2025				August 2, 2024
Current Earnings	Amount		% Sales		Amount		% Sales		Amount		% Sales		Amount		% Sales
Net sales	$	23,959	100.00	%	$	23,586	100.00	%	$	44,888	100.00	%	$	44,950	100.00	%
Cost of sales	15,858		66.19		15,691		66.53		29,800		66.39		29,965		66.66
Gross margin	8,101		33.81		7,895		33.47		15,088		33.61		14,985		33.34
Expenses:
Selling, general and administrative	4,175		17.42		4,025		17.07		8,222		18.31		8,034		17.88
Depreciation and amortization	457		1.91		423		1.79		902		2.01		851		1.89
Operating income	3,469		14.48		3,447		14.61		5,964		13.29		6,100		13.57
Interest – net	313		1.31		317		1.34		650		1.45		669		1.49

Pre-tax earnings	3,156		13.17		3,130		13.27		5,314		11.84		5,431		12.08
Income tax provision	758		3.16		747		3.17		1,276		2.84		1,294		2.88
Net earnings	$	2,398	10.01%		$	2,383	10.10%		$	4,038	9.00	%	$	4,137	9.20	%


Weighted average common shares outstanding – basic	559				568				559				570
Basic earnings per common share	$	4.28			$	4.18			$	7.21			$	7.24
Weighted average common shares outstanding – diluted	560				570				560				571
Diluted earnings per common share	$	4.27			$	4.17			$	7.19			$	7.23

See accompanying notes to the consolidated financial statements (unaudited).

Lowe’s Companies, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions, Except Percentage Data


	Three Months Ended								Six Months Ended
	August 1, 2025				August 2, 2024				August 1, 2025				August 2, 2024
	Amount		% Sales		Amount		% Sales		Amount		% Sales		Amount		% Sales
Net earnings	$	2,398	10.01	%	$	2,383	10.10	%	$	4,038	9.00	%	$	4,137	9.20	%

Cash flow hedges – net of tax	(4)		(0.01)		(3)		(0.01)		(7)		(0.02)		(6)		(0.01)
Other	(1)		(0.01)		2		0.01		—		—		1		—
Other comprehensive loss	(5)		(0.02)		(1)		—		(7)		(0.02)		(5)		(0.01)
Comprehensive income	$	2,393	9.99	%	$	2,382	10.10	%	$	4,031	8.98	%	$	4,132	9.19	%

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Balance Sheets (Unaudited)

In Millions, Except Par Value Data


	August 1, 2025		August 2, 2024		January 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	4,860	$	4,360	$	1,761
Short-term investments	396		330		372
Merchandise inventory - net	16,342		16,841		17,409
Other current assets	1,041		806		816
Total current assets	22,639		22,337		20,358
Property, less accumulated depreciation	17,708		17,515		17,649
Operating lease right-of-use assets	3,887		3,819		3,738
Long-term investments	273		292		277
Deferred income taxes - net	140		184		244
Intangibles - net	976		284		277
Goodwill	691		311		311
Other assets	300		192		248
Total assets	$	46,614	$	44,934	$	43,102

Liabilities and shareholders' deficit
Current liabilities:

Current maturities of long-term debt	4,175		1,290		2,586
Current operating lease liabilities	536		552		563
Accounts payable	9,513		10,336		9,290
Accrued compensation and employee benefits	1,098		1,055		1,008
Deferred revenue	1,558		1,417		1,358
Other current liabilities	4,742		3,596		3,952
Total current liabilities	21,622		18,246		18,757
Long-term debt, excluding current maturities	30,548		34,659		32,901
Noncurrent operating lease liabilities	3,801		3,738		3,628
Deferred revenue - Lowe's protection plans	1,283		1,256		1,268
Other liabilities	760		798		779
Total liabilities	58,014		58,697		57,333

Shareholders' deficit:
Preferred stock, $5 par value: Authorized – 5.0 million shares; Issued and outstanding – none	—		—		—
Common stock, $0.50 par value: Authorized – 5.6 billion shares; Issued and outstanding – 561 million, 568 million, and 560 million, respectively	280		284		280
Capital in excess of par value	147		—		—
Accumulated deficit	(12,108)		(14,342)		(14,799)
Accumulated other comprehensive income	281		295		288
Total shareholders' deficit	(11,400)		(13,763)		(14,231)
Total liabilities and shareholders' deficit	$	46,614	$	44,934	$	43,102

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Statements of Shareholders’ Deficit (Unaudited)

In Millions


	Three Months Ended August 1, 2025
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance May 2, 2025	560	$	280	$	13	$	(13,833)	$	286	$	(13,254)

Net earnings	—	—		—		2,398		—		2,398
Other comprehensive loss	—	—		—		—		(5)		(5)
Cash dividends declared, $1.20 per share	—	—		—		(673)		—		(673)
Share-based payment expense	—	—		64		—		—		64
Repurchases of common stock	—	—		1		—		—		1
Issuance of common stock under share-based payment plans	1	—		69		—		—		69
Balance August 1, 2025	561	$	280	$	147	$	(12,108)	$	281	$	(11,400)

	Six Months Ended August 1, 2025
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance January 31, 2025	560	$	280	$	—	$	(14,799)	$	288	$	(14,231)

Net earnings	—	—		—		4,038		—		4,038
Other comprehensive loss	—	—		—		—		(7)		(7)
Cash dividends declared, $2.35 per share	—	—		—		(1,317)		—		(1,317)
Share-based payment expense	—	—		117		—		—		117
Repurchases of common stock	—	(1)		(40)		(30)		—		(71)
Issuance of common stock under share-based payment plans	1	1		70		—		—		71
Balance August 1, 2025	561	$	280	$	147	$	(12,108)	$	281	$	(11,400)


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	Three Months Ended August 2, 2024
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance May 3, 2024	572	$	286	$	—	$	(15,188)	$	296	$	(14,606)
Net earnings	—	—		—		2,383		—		2,383
Other comprehensive income	—	—		—		—		(1)		(1)
Cash dividends declared, $1.15 per share	—	—		—		(654)		—		(654)
Share-based payment expense	—	—		60		—		—		60
Repurchases of common stock	(4)	(2)		(129)		(883)		—		(1,014)
Issuance of common stock under share-based payment plans	—	—		69		—		—		69
Balance August 2, 2024	568	$	284	$	—	$	(14,342)	$	295	$	(13,763)

	Six Months Ended August 2, 2024
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance February 2, 2024	574	$	287	$	—	$	(15,637)	$	300	$	(15,050)

Net earnings	—	—		—		4,137		—		4,137
Other comprehensive loss	—	—		—		—		(5)		(5)
Cash dividends declared, $2.25 per share	—	—		—		(1,283)		—		(1,283)
Share-based payment expense	—	—		110		—		—		110
Repurchases of common stock	(7)	(4)		(193)		(1,559)		—		(1,756)
Issuance of common stock under share-based payment plans	1	1		83		—		—		84
Balance August 2, 2024	568	$	284	$	—	$	(14,342)	$	295	$	(13,763)

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Statements of Cash Flows (Unaudited)

In Millions


	Six Months Ended
	August 1, 2025		August 2, 2024
Cash flows from operating activities:
Net earnings	$	4,038	$	4,137
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	1,022		967
Noncash lease expense	267		260
Deferred income taxes	70		66
Loss/(gain) on property and other assets – net	30		(4)

Gain on sale of business	—		(43)
Share-based payment expense	117		110
Changes in operating assets and liabilities:
Merchandise inventory – net	1,173		53
Other operating assets	(2)		129
Accounts payable	150		1,679
Other operating liabilities	745		61
Net cash provided by operating activities	7,610		7,415

Cash flows from investing activities:
Purchases of investments	(845)		(628)
Proceeds from sale/maturity of investments	827		571
Capital expenditures	(1,013)		(808)
Proceeds from sale of property and other long-term assets	7		22
Acquisition of business - net	(1,314)		—
Proceeds from sale of business	—		43
Other – net	(5)		—
Net cash used in investing activities	(2,343)		(800)

Cash flows from financing activities:


Repayment of debt	(796)		(47)
Proceeds from issuance of common stock under share-based payment plans	70		84
Cash dividend payments	(1,290)		(1,262)
Repurchases of common stock	(113)		(1,930)
Other – net	(39)		(21)
Net cash used in financing activities	(2,168)		(3,176)



Net increase in cash and cash equivalents	3,099		3,439
Cash and cash equivalents, beginning of period	1,761		921
Cash and cash equivalents, end of period	$	4,860	$	4,360

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements (unaudited) and notes to the condensed consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The condensed consolidated financial statements (unaudited), in the opinion of management, contain all normal recurring adjustments necessary to present fairly the consolidated balance sheets as of August 1, 2025, and August 2, 2024, and the statements of earnings, comprehensive income, and shareholders’ deficit for the three and six months ended August 1, 2025, and August 2, 2024, and cash flows for the six months ended August 1, 2025, and August 2, 2024. The January 31, 2025, consolidated balance sheet was derived from the audited financial statements.

These interim condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe’s Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended January 31, 2025 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year.

Accounting Pronouncements Not Yet Adopted

There have been no significant changes in the accounting pronouncements not yet adopted from those disclosed in the Annual Report. Accounting pronouncements not disclosed in this Form 10-Q or in the Annual Report are either not applicable to the Company or are not expected to have a material impact to the Company.

Note 2: Acquisitions

On April 9, 2025, the Company entered into a definitive agreement to acquire Artisan Design Group (ADG). ADG is a leading nationwide provider of design, distribution and installation services for interior surface finishers, including flooring, cabinets and countertops, to national, regional and local home builders and property managers. The acquisition is expected to expand the Company’s Pro customer offering into a new distribution channel within a highly fragmented market. The acquisition was completed on June 2, 2025, for an aggregate cash purchase price of $1.3 billion and is included in the investing section of the consolidated statements of cash flows, net of cash acquired. Acquisition-related costs were expensed as incurred.


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The following table summarizes our preliminary aggregate purchase price allocation:


(In millions)	June 2, 2025
Allocation:
Cash acquired	$	2
Merchandise inventory	106
Property	31
Operating lease right-of-use assets	137
Intangible assets	714
Goodwill	379
Other assets	270
Accounts payable	(73)
Accrued compensation and employee benefits	(34)
Operating lease liabilities	(125)
Deferred revenue	(22)
Long-term debt, excluding current maturities	(4)
Deferred income taxes, net	(36)
Other liabilities	(30)
Net assets acquired	$	1,315

Intangible assets acquired totaled $714 million, and include trademarks of $130 million with a useful life of 15 years, customer relationships of $550 million with a useful life of 20 years, backlog of $26 million, and non-compete agreements of $8 million with a useful life of 5 years, each of which are included in the intangibles-net line item within the accompanying consolidated balance sheet. Goodwill of $379 million is primarily attributable to the synergies expected to arise after the acquisition. We expect $312 million of goodwill to be deductible for tax purposes.

We have completed valuation analyses necessary to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions; however, the amounts indicated above are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities assumed. The final determination of acquisition date fair values and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.

Pro forma revenue and earnings since acquisition has not been provided as the acquisition was not material to the consolidated financial statements.

Note 3: Revenue

Net sales consists primarily of revenue, net of sales tax, associated with contracts with customers for the sale of goods and services in amounts that reflect consideration the Company is entitled to in exchange for those goods and services.

The following table presents the Company’s sources of revenue:


(In millions)	Three Months Ended						Six Months Ended
August 1, 2025			August 2, 2024			August 1, 2025			August 2, 2024
Products	$	22,973		$	22,709		$	43,141		$	43,396
Services	655			548			1,200			1,080
Other	331			329			547			474
Net sales	$	23,959		$	23,586		$	44,888		$	44,950


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A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded. The merchandise return reserve is presented on a gross basis, with a separate asset and liability included in the consolidated balance sheets. The balances and classification within the consolidated balance sheets for anticipated sales returns and the associated right of return assets are as follows:


(In millions)	Classification	August 1, 2025		August 2, 2024		January 31, 2025
Anticipated sales returns	Other current liabilities	$	211	$	207	$	167
Right of return assets	Other current assets	123		119		99

Deferred revenue - retail and stored-value cards

Retail deferred revenue consists of amounts received for which customers have not yet taken possession of the merchandise or for which installation has not yet been completed. The majority of revenue for goods and services is recognized in the quarter following revenue deferral. Stored-value cards deferred revenue includes outstanding stored-value cards such as gift cards and returned merchandise credits that have not yet been redeemed. Deferred revenue for retail and stored-value cards are as follows:


(In millions)	August 1, 2025		August 2, 2024		January 31, 2025
Retail deferred revenue	$	1,095	$	922	$	770
Stored-value cards deferred revenue	463		495		588
Deferred revenue	$	1,558	$	1,417	$	1,358

Deferred revenue - Lowe’s protection plans

The Company defers revenues for its separately-priced long-term extended protection plan contracts (Lowe’s protection plans) and recognizes revenue on a straight-line basis over the respective contract term. Expenses for claims are recognized in cost of sales when incurred.


(In millions)			August 1, 2025						August 2, 2024						January 31, 2025
Deferred revenue - Lowe’s protection plans			$	1,283					$	1,256					$	1,268


	Three Months Ended				Six Months Ended
(In millions)	August 1, 2025		August 2, 2024		August 1, 2025		August 2, 2024
Lowe’s protection plans deferred revenue recognized into sales	$	144	$	140	$	287	$	279
Lowe’s protection plans claim expenses	61		50		119		104

Disaggregation of Revenues

The following table presents the Company’s net sales disaggregated by merchandise division:


	Three Months Ended								Six Months Ended
	August 1, 2025				August 2, 2024				August 1, 2025				August 2, 2024
(In millions)	Net Sales		%		Net Sales		%		Net Sales		%		Net Sales		%
Home Décor1	$	8,359	34.9	%	$	8,181	34.7	%	$	15,911	35.4	%	$	15,847	35.3	%
Hardlines2	7,817		32.6		7,718		32.7		14,221		31.7		14,357		31.9
Building Products3	7,084		29.6		7,077		30.0		13,635		30.4		13,726		30.5
Other	699		2.9		610		2.6		1,121		2.5		1,020		2.3
Total	$	23,959	100.0	%	$	23,586	100.0	%	$	44,888	100.0	%	$	44,950	100.0	%

Note: Merchandise division net sales for the prior period have been reclassified to conform to the current period presentation.

1 Home Décor includes the following product categories: Appliances, Décor, Flooring, Kitchens & Bath, and Paint.

2 Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools.

3 Building Products includes the following product categories: Building Materials, Electrical, Lumber, Millwork, and Rough Plumbing.


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Note 4: Restricted Investments

Short-term and long-term investments include restricted balances pledged as collateral primarily for the Lowe’s protection plans program and are as follows:


(In millions)	August 1, 2025		August 2, 2024		January 31, 2025
Short-term restricted investments	$	396	$	330	372
Long-term restricted investments	273		292		277
Total restricted investments	$	669	$	622	$	649

Note 5: Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:

Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of August 1, 2025, August 2, 2024, and January 31, 2025:


			Fair Value Measurements at
(In millions)	Classification	Measurement Level	August 1, 2025		August 2, 2024		January 31, 2025
Available-for-sale debt securities:
U.S. Treasury securities	Short-term investments	Level 1	$	225	$	184	$	199
Money market funds	Short-term investments	Level 1	60		81		91
Commercial paper	Short-term investments	Level 2	48		29		49
Certificates of deposit	Short-term investments	Level 1	37		13		13
Foreign government debt securities	Short-term investments	Level 2	19		—		4
Corporate debt securities	Short-term investments	Level 2	5		21		16

Municipal obligations	Short-term investments	Level 2	2		2		—
U.S. Treasury securities	Long-term investments	Level 1	125		188		150
Corporate debt securities	Long-term investments	Level 2	119		79		88
Foreign government debt securities	Long-term investments	Level 2	22		22		37
Municipal obligations	Long-term investments	Level 2	7		3		2



Derivative instruments:




Fixed-to-floating interest rate swaps	Other current liabilities	Level 2	$	6	$	—	$	11
Fixed-to-floating interest rate swaps	Other liabilities	Level 2	24		57		35

There were no transfers between Levels 1, 2, or 3 during any of the periods presented.

When available, quoted prices were used to determine fair value. When quoted prices in active markets were available, financial assets were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not available, fair values for financial assets and liabilities classified within Level 2 were determined using pricing models, and the


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inputs to those pricing models were based on observable market inputs. The inputs to the pricing models were typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others.

The Company has performance-based contingent consideration related to the fiscal 2022 sale of the Canadian retail business which is classified as a Level 3 long-term investment, and such contingent consideration had an estimated fair value of zero as of August 1, 2025, August 2, 2024, and January 31, 2025. The Company’s measurements of fair value of the contingent consideration are based on an income approach, which requires certain assumptions considering operating performance of the business and a risk-adjusted discount rate. Changes in the estimated fair value of the contingent consideration are recognized within selling, general and administrative expenses (SG&A) in the consolidated statements of earnings.

The rollforward of the fair value of contingent consideration for the three and six months ended August 1, 2025 and August 2, 2024, is as follows:


	Three Months Ended				Six Months Ended
(In millions)	August 1, 2025		August 2, 2024		August 1, 2025		August 2, 2024
Beginning balance	$	—	$	—	$	—	$	—

Change in fair value	—		43		—		43
Proceeds received	—		(43)		—		(43)
Ending balance	$	—	$	—	$	—	$	—

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

During the three and six months ended August 1, 2025, and August 2, 2024, the Company had no material measurements of assets and liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

Other Fair Value Disclosures

The Company’s financial assets and liabilities not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable, and long-term debt and are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value for these items due to their short-term nature. As further described in Note 8, certain long-term debt is associated with a fair value hedge and the changes in fair value of the hedged debt is included in the carrying value of long-term debt in the consolidated balance sheets. The fair values of the Company’s unsecured notes were estimated using quoted market prices. The fair values of the Company’s mortgage notes were estimated using discounted cash flow analyses, based on the future cash outflows associated with these arrangements and discounted using the applicable incremental borrowing rate.

Carrying amounts and the related estimated fair value of the Company’s long-term debt, excluding finance lease obligations, are as follows:


	August 1, 2025				August 2, 2024				January 31, 2025
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Unsecured notes (Level 1)	$	34,289	$	31,198	$	35,440	$	32,748	$	35,011	$	31,557
Mortgage notes (Level 2)	1		1		1		1		1		1
Long-term debt (excluding finance lease obligations)	$	34,290	$	31,199	$	35,441	$	32,749	$	35,012	$	31,558

Note 6: Accounts Payable

The Company has an agreement with a third party to provide a supplier finance program which facilitates participating suppliers’ ability to finance payment obligations from the Company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s outstanding payment obligations that suppliers financed to participating financial institutions, which are included in accounts payable on the


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consolidated balance sheets, are as follows:


(In millions)						August 1, 2025						August 2, 2024						January 31, 2025
Financed payment obligations						$	1,326					$	1,447					$	1,511

Note 7: Debt

The Company’s commercial paper program is supported by the $2.0 billion five-year unsecured revolving credit agreement entered into in September 2023 (2023 Credit Agreement) and the $2.0 billion five-year unsecured third amended and restated credit agreement entered into in December 2021, and as amended (Third Amended and Restated Credit Agreement). The amounts available to be drawn under the 2023 Credit Agreement and the Third Amended and Restated Credit Agreement are reduced by the amount of borrowings under the commercial paper program. As of August 1, 2025, August 2, 2024, and January 31, 2025, there were no outstanding borrowings under the Company’s commercial paper program, the 2023 Credit Agreement, or the Third Amended and Restated Credit Agreement. Total combined availability under the 2023 Credit Agreement and the Third Amended and Restated Credit Agreement was $4.0 billion as of August 1, 2025.

Note 8: Derivative Instruments

The Company utilizes fixed-to-floating interest rate swap agreements as fair value hedges on certain debt. The notional amounts for the Company’s material derivative instruments are as follows:


(In millions)	August 1, 2025		August 2, 2024		January 31, 2025


Fair value hedges:
Fixed-to-floating interest rate swap agreements	$	850	$	850	$	850

See Note 5 for the gross fair values of the Company’s outstanding derivative financial instruments and corresponding fair value classifications. The cash flows related to settlement of the Company’s hedging derivative financial instruments are classified in the consolidated statements of cash flows based on the nature of the underlying hedged items.

The Company accounts for the fixed-to-floating interest rate swap agreements as fair value hedges using the shortcut method of accounting under which the hedges are assumed to be perfectly effective. Thus, the change in fair value of the derivative instruments offsets the change in fair value on the hedged debt, and there is no net impact in the consolidated statements of earnings from the fair value of the derivatives.

Note 9: Shareholders’ Deficit

The Company has a share repurchase program that is executed through purchases made from time to time either in the open market, which may be made under pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934, or through private off-market transactions. Shares purchased under the repurchase program are returned to authorized and unissued status. Any excess of cost over par value is charged to additional paid-in capital to the extent that a balance is present. Once additional paid-in capital is fully depleted, remaining excess of cost over par value is charged to accumulated deficit. As of August 1, 2025, the Company had $10.8 billion remaining in its share repurchase program. In fiscal 2025, the Company paused its share repurchase program.

The Company also withholds shares from employees to satisfy either the exercise price of stock options exercised or the statutory withholding tax liability resulting from the vesting of share-based awards.

Total shares repurchased for the three and six months ended August 1, 2025, and August 2, 2024, were as follows:


	Three Months Ended
	August 1, 2025			August 2, 2024
(In millions)	Shares	Cost		Shares	Cost
Share repurchase program1	—	$	(3)	4.4	$	1,012
Shares withheld from employees	—	2		—	2
Total share repurchases	—	$	(1)	4.4	$	1,014


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	Six Months Ended
	August 1, 2025			August 2, 2024
(In millions)	Shares	Cost		Shares	Cost
Share repurchase program1	—	$	(3)	7.1	$	1,664
Shares withheld from employees	0.3	72		0.4	92
Total share repurchases	0.3	$	69	7.5	$	1,756

1 Includes excise tax on share repurchases in excess of issuances as part of the cost basis of the shares acquired.

Note 10: Earnings Per Share

The Company calculates basic and diluted earnings per common share using the two-class method. The following table reconciles earnings per common share for the three and six months ended August 1, 2025, and August 2, 2024:


	Three Months Ended				Six Months Ended
(In millions, except per share data)	August 1, 2025		August 2, 2024		August 1, 2025		August 2, 2024
Basic earnings per common share:
Net earnings	$	2,398	$	2,383	$	4,038	$	4,137
Less: Net earnings allocable to participating securities	(7)		(6)		(11)		(10)
Net earnings allocable to common shares, basic	$	2,391	$	2,377	$	4,027	$	4,127
Weighted-average common shares outstanding	559		568		559		570
Basic earnings per common share	$	4.28	$	4.18	$	7.21	$	7.24
Diluted earnings per common share:
Net earnings	$	2,398	$	2,383	$	4,038	$	4,137
Less: Net earnings allocable to participating securities	(7)		(6)		(11)		(10)
Net earnings allocable to common shares, diluted	$	2,391	$	2,377	$	4,027	$	4,127
Weighted-average common shares outstanding	559		568		559		570
Dilutive effect of non-participating share-based awards	1		2		1		1
Weighted-average common shares, as adjusted	560		570		560		571
Diluted earnings per common share	$	4.27	$	4.17	$	7.19	$	7.23

Anti-dilutive securities excluded from diluted weighted-average common shares	0.3		0.5		0.2		0.4

Note 11: Supplemental Disclosure

Net interest expense is comprised of the following:


	Three Months Ended				Six Months Ended
(In millions)	August 1, 2025		August 2, 2024		August 1, 2025		August 2, 2024
Long-term debt	$	351	$	364	$	709	$	729

Lease obligations	5		6		10		12

Interest income	(42)		(52)		(67)		(74)
Interest capitalized	(2)		(1)		(4)		(2)
Interest on tax uncertainties	1		—		2		3
Other	—		—		—		1
Interest – net	$	313	$	317	$	650	$	669


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Supplemental disclosures of cash flow information:


	Six Months Ended
(In millions)	August 1, 2025		August 2, 2024
Cash paid for interest, net of amount capitalized	$	721	$	735
Cash paid for income taxes – net1	657		1,004
Non-cash investing and financing activities:
Leased assets obtained in exchange for new finance lease liabilities	$	15	$	33
Leased assets obtained in exchange for new operating lease liabilities2	293		353
Cash dividends declared but not paid	673		654

1 Cash paid for income taxes - net for the six months ended August 1, 2025, and August 2, 2024, includes $453 million and $541 million, respectively, of cash paid for the purchase of federal transferable tax credits

2 Excludes $48 million of leases signed but not yet commenced as of August 1, 2025.

Note 12: Segment Information

The Company’s home improvement operations represent a single operating segment designed to enable customers to purchase products and services seamlessly through all channels. The Company’s chief operating decision maker (CODM) is the Chairman, President, and Chief Executive Officer. The CODM has the ultimate decision-making authority for resource allocation and assessing the performance of the Company. Thereby, the CODM regularly reviews consolidated net earnings as the measure of segment profit or loss, as well as significant segment expenses included in the below table, to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. The CODM also uses these measures in monitoring plan versus actual results. The CODM does not review segment assets at a different asset level or category than those disclosed in the consolidated balance sheets.

The following presents the Company’s operating results, including significant segment expenses.


	Three Months Ended						Six Months Ended
	August 1, 2025			August 2, 2024			August 1, 2025			August 2, 2024
(In millions, except percentage data)	Amount		% Sales	Amount		% Sales	Amount		% Sales	Amount		% Sales
Net sales	$	23,959	100.00%	$	23,586	100.00%	$	44,888	100.00%	$	44,950	100.00%
Less:
Cost of sales	15,858		66.19	15,691		66.53	29,800		66.39	29,965		66.66
Selling, general and administrative:
Employee compensation and benefits	2,835		11.83	2,766		11.73	5,648		12.58	5,564		12.40
Occupancy and facility costs	472		1.97	467		1.98	940		2.10	930		2.07
Advertising	249		1.04	234		0.99	448		1.00	438		0.98
Other SG&A items1	619		2.58	558		2.37	1,186		2.63	1,102		2.43
Depreciation and amortization	457		1.91	423		1.79	902		2.01	851		1.89
Interest – net	313		1.31	317		1.34	650		1.45	669		1.49
Income tax provision	758		3.16	747		3.17	1,276		2.84	1,294		2.88
Net earnings	$	2,398	10.01%	$	2,383	10.10%	$	4,038	9.00%	$	4,137	9.20	%

1 Other SG&A items primarily include financial services costs, technology service costs, insurance costs, impairment costs, and store environment initiative and display costs.

Note 13: Subsequent Event

On August 20, 2025, the Company announced it has entered into a definitive agreement (the Agreement) to acquire Foundation Building Materials (FBM) for approximately $8.8 billion. FBM is expected to accelerate the Company’s Total Home strategy by enhancing its offering to Pro customers through expanded capabilities, faster fulfillment, improved digital tools, a robust trade credit platform, and significant cross-selling opportunities between FBM and Lowe's. The Company intends to fund the


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acquisition through a combination of short-term and long-term debt. The transaction is expected to close in the fourth quarter of fiscal 2025, subject to customary closing conditions, including regulatory approval.


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Lowe’s Companies, Inc.

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of August 1, 2025 and August 2, 2024, the related condensed consolidated statements of earnings, comprehensive income, and shareholders’ deficit for the fiscal three-month and six-month periods ended August 1, 2025 and August 2, 2024, and cash flows for the fiscal six-month periods ended August 1, 2025 and August 2, 2024, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January 31, 2025, and the related consolidated statements of earnings, comprehensive income, shareholders’ deficit, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 24, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina

August 28, 2025


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