By Nicholas G. Miller

Lowe's is expecting a flat home-improvement market in 2026 as stalled housing sales, high interest rates and economic uncertainty continue to lead homeowners to delay remodeling and repair projects.

"Our outlook for 2026 remains cautious given the persistent volatility in the housing macro," said Chief Executive Marvin Ellison in the company's earnings call. "This uncertainty continues to pressure big-ticket discretionary [do-it-yourself] projects, as many consumers are reluctant to make significant investments in their homes."

The home-improvement retailer's earnings guidance for 2026 missed expectations and shares fell 5% to $264.54.

On Tuesday, Home Depot said it was seeing pressure from economic uncertainty and a frozen housing market.

Ellison echoed those comments Wednesday, saying, "Consumer confidence remains subdued given inflationary pressures and overall economic uncertainty."

"A persistent lock-in effect remains in place, keeping housing turnover and new-home starts under pressure, leading us to expect improvement in both the housing and home-improvement markets to be gradual," Ellison said.

While many homeowners will receive larger tax refunds this year, "It is unclear how much of that will be spent on home improvement," said Chief Financial Officer Brandon Sink. "It is also unclear when mortgage rates will ease, which will continue to exert pressure on existing home sales and new-home construction."

Lowe's said it expects the home-improvement market to be down 1% to up 1% in 2026.

But even amid the downturn, the company has generated revenue growth through its business supplying professional builders. Home Depot and Lowe's are competing for the more consistent spending of professional customers, particularly as consumers delay large remodels and DIY projects, analysts say.

In October, Lowe's completed its $8.8 billion acquisition of Foundation Building Materials, marking a significant leap into the professional-builder market following large acquisitions by Home Depot.

For the fourth quarter, Lowe's reported sales of $20.58 billion, up from $18.55 billion the year prior. Wall Street had expected $20.34 billion, according to FactSet.

Comparable sales rose 1.3%, which the company said was "driven by continued growth in Pro, online, and home-services sales, as well as strong holiday performance." Analysts had expected comparable sales growth of 0.2%.

The company reported net income of $999 million, or $1.78 a share, down from $1.13 billion, or $1.99 a share, the year prior.

In the quarter, the company logged $149 million in pretax expenses associated with the acquisitions of Foundation Building Materials and Artisan Design Group.

Adjusted earnings were $1.98 a share. Analysts polled by FactSet had expected $1.94 a share.

The company guided for fiscal 2026 sales of $92 billion to $94 billion, comparable sales growth of flat to 2% and adjusted earnings of $12.25 to $12.75 a share. Analysts see 2026 sales of $93.26 billion, comparable sales growth of 1.8% and adjusted earnings of $12.90 a share.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

February 25, 2026 10:43 ET (15:43 GMT)

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