Weak Housing Market and Acquisition Drag Weigh on Operating Margin Potential at Lowe's

Lowe's is the second-largest home improvement retailer globally, set to capture around $92 billion in sales in fiscal 2026. With a perpetual focus on retail fundamentals (merchandising, operational efficiency, supply chain improvements, omnichannel shopping experience, and customer engagement), Lowe's has been able to manage costs while maintaining its low-cost position. The firm retains some of its cost savings and passes the rest on to its customers through everyday low prices, creating a flywheel effect. Intangible asset and scale-based cost advantages support our wide moat rating.