LOW · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

LOWES COMPANIES INC · 2026-08-27 · Importance 31 · Surprise 32

Second-quarter gross margin declined 77 basis points to 33.04% of sales from 33.81% in the prior-year quarter. Six-month gross margin declined 74 basis points to 32.87% from 33.61%. The margin pressure primarily reflected the operational cost structure of acquisitions completed in 2025 and increased fuel costs. Credit revenue and approximately $80 million of tariff refunds partially offset the decline in the second quarter.

Key facts

• For the second quarter of 2026, gross margin as a percentage of sales decreased 77 basis points compared to 2025. source
• Gross margin as a percentage of sales decreased 74 basis points in the first six months of 2026 compared to 2025. source
• The gross margin decline for the quarter was driven by the operational cost structure of acquisitions during 2025 and increased fuel costs, partially offset by favorability from credit revenue and tariff refunds. source