Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Lowe’s Cos. Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Federal 1,764 1,955 2,226 2,069 1,578 935
State 424 489 561 557 425 268
Current 2,188 2,444 2,787 2,626 2,003 1,203
Federal 3 (179) 129 (73) 121
State 8 2 (9) 11 (26) 18
Deferred 8 5 (188) 140 (99) 139
Income tax provision 2,196 2,449 2,599 2,766 1,904 1,342

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Lowe’s Cos. Inc. current decreased from 2023 to 2024 and from 2024 to 2025.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Lowe’s Cos. Inc. deferred increased from 2023 to 2024 and from 2024 to 2025.
Income tax provision Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Lowe’s Cos. Inc. income tax provision decreased from 2023 to 2024 and from 2024 to 2025.

Effective Income Tax Rate (EITR)

Lowe’s Cos. Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Statutory federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00% 21.00%
State income taxes, net of federal tax benefit 3.70% 3.80% 4.80% 4.00% 4.00% 4.10%
Valuation allowance -0.40% 0.70% 5.50% 0.00% 0.00% 1.30%
Expiration of capital loss carryforward 0.10% 0.00% 2.50% 0.00% 0.00% 0.00%
Loss on divestiture of Canadian retail business 0.00% -1.00% -4.10% 0.00% 0.00% 0.00%
Mexico impairment 0.00% 0.00% 0.00% 0.00% 0.00% -1.40%
Other, net -0.40% -0.40% -0.90% -0.30% -0.40% -1.10%
Effective tax rate 24.00% 24.10% 28.80% 24.70% 24.60% 23.90%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Lowe’s Cos. Inc. effective tax rate decreased from 2023 to 2024 and from 2024 to 2025.

Components of Deferred Tax Assets and Liabilities

Lowe’s Cos. Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Self-insurance 233 261 267 287 284 260
Share-based payment expense 46 49 64 53 48 30
Operating lease liabilities 1,143 1,159 1,126 1,386 1,328 1,377
Capital loss carryforwards 645 695 722 225 225 225
Net operating losses 261 332 409 251 274 273
Other, net 390 446 363 242 337 131
Deferred tax assets 2,718 2,942 2,951 2,444 2,496 2,296
Valuation allowance (1,003) (1,133) (1,136) (590) (601) (561)
Net deferred tax assets 1,715 1,809 1,815 1,854 1,895 1,735
Operating lease right-of-use assets (1,012) (1,017) (974) (1,378) (1,146) (1,198)
Property (315) (389) (438) (267) (382) (293)
Other, net (144) (155) (153) (45) (27) (28)
Deferred tax liabilities (1,471) (1,561) (1,565) (1,690) (1,555) (1,519)
Net deferred tax assets (liabilities) 244 248 250 164 340 216

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Lowe’s Cos. Inc. deferred tax assets decreased from 2023 to 2024 and from 2024 to 2025.
Net deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Lowe’s Cos. Inc. net deferred tax assets decreased from 2023 to 2024 and from 2024 to 2025.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Lowe’s Cos. Inc. net deferred tax assets (liabilities) decreased from 2023 to 2024 and from 2024 to 2025.

Deferred Tax Assets and Liabilities, Classification

Lowe’s Cos. Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Deferred tax assets 244 248 250 164 340 216

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Lowe’s Cos. Inc. deferred tax assets decreased from 2023 to 2024 and from 2024 to 2025.

Adjustments to Financial Statements: Removal of Deferred Taxes

Lowe’s Cos. Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Adjustment to Total Assets
Total assets (as reported) 43,102 41,795 43,708 44,640 46,735 39,471
Less: Noncurrent deferred tax assets, net 244 248 250 164 340 216
Total assets (adjusted) 42,858 41,547 43,458 44,476 46,395 39,255
Adjustment to Shareholders’ Equity (deficit)
Shareholders’ equity (deficit) (as reported) (14,231) (15,050) (14,254) (4,816) 1,437 1,972
Less: Net deferred tax assets (liabilities) 244 248 250 164 340 216
Shareholders’ equity (deficit) (adjusted) (14,475) (15,298) (14,504) (4,980) 1,097 1,756
Adjustment to Net Earnings
Net earnings (as reported) 6,957 7,726 6,437 8,442 5,835 4,281
Add: Deferred income tax expense (benefit) 8 5 (188) 140 (99) 139
Net earnings (adjusted) 6,965 7,731 6,249 8,582 5,736 4,420

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).


Lowe’s Cos. Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Lowe’s Cos. Inc., adjusted financial ratios

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
Net Profit Margin
Reported net profit margin 8.31% 8.94% 6.63% 8.77% 6.51% 5.93%
Adjusted net profit margin 8.32% 8.95% 6.44% 8.92% 6.40% 6.13%
Total Asset Turnover
Reported total asset turnover 1.94 2.07 2.22 2.16 1.92 1.83
Adjusted total asset turnover 1.95 2.08 2.23 2.16 1.93 1.84
Financial Leverage
Reported financial leverage 32.52 20.02
Adjusted financial leverage 42.29 22.35
Return on Equity (ROE)
Reported ROE 406.05% 217.09%
Adjusted ROE 522.88% 251.71%
Return on Assets (ROA)
Reported ROA 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%
Adjusted ROA 16.25% 18.61% 14.38% 19.30% 12.36% 11.26%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Lowe’s Cos. Inc. adjusted net profit margin ratio improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Lowe’s Cos. Inc. adjusted total asset turnover ratio deteriorated from 2023 to 2024 and from 2024 to 2025.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Lowe’s Cos. Inc. adjusted ROA improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025 not reaching 2023 level.

Lowe’s Cos. Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Profitability Ratio
Net profit margin1 8.31% 8.94% 6.63% 8.77% 6.51% 5.93%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 6,965 7,731 6,249 8,582 5,736 4,420
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Profitability Ratio
Adjusted net profit margin2 8.32% 8.95% 6.44% 8.92% 6.40% 6.13%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 6,957 ÷ 83,674 = 8.31%

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × 6,965 ÷ 83,674 = 8.32%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Lowe’s Cos. Inc. adjusted net profit margin ratio improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025.

Adjusted Total Asset Turnover

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Total assets 43,102 41,795 43,708 44,640 46,735 39,471
Activity Ratio
Total asset turnover1 1.94 2.07 2.22 2.16 1.92 1.83
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 83,674 86,377 97,059 96,250 89,597 72,148
Adjusted total assets 42,858 41,547 43,458 44,476 46,395 39,255
Activity Ratio
Adjusted total asset turnover2 1.95 2.08 2.23 2.16 1.93 1.84

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 83,674 ÷ 43,102 = 1.94

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 83,674 ÷ 42,858 = 1.95

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Lowe’s Cos. Inc. adjusted total asset turnover ratio deteriorated from 2023 to 2024 and from 2024 to 2025.

Adjusted Financial Leverage

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets 43,102 41,795 43,708 44,640 46,735 39,471
Shareholders’ equity (deficit) (14,231) (15,050) (14,254) (4,816) 1,437 1,972
Solvency Ratio
Financial leverage1 32.52 20.02
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 42,858 41,547 43,458 44,476 46,395 39,255
Adjusted shareholders’ equity (deficit) (14,475) (15,298) (14,504) (4,980) 1,097 1,756
Solvency Ratio
Adjusted financial leverage2 42.29 22.35

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 43,102 ÷ -14,231 =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity (deficit)
= 42,858 ÷ -14,475 =


Adjusted Return on Equity (ROE)

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Shareholders’ equity (deficit) (14,231) (15,050) (14,254) (4,816) 1,437 1,972
Profitability Ratio
ROE1 406.05% 217.09%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 6,965 7,731 6,249 8,582 5,736 4,420
Adjusted shareholders’ equity (deficit) (14,475) (15,298) (14,504) (4,980) 1,097 1,756
Profitability Ratio
Adjusted ROE2 522.88% 251.71%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 ROE = 100 × Net earnings ÷ Shareholders’ equity (deficit)
= 100 × 6,957 ÷ -14,231 =

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted shareholders’ equity (deficit)
= 100 × 6,965 ÷ -14,475 =


Adjusted Return on Assets (ROA)

Microsoft Excel
Jan 31, 2025 Feb 2, 2024 Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 6,957 7,726 6,437 8,442 5,835 4,281
Total assets 43,102 41,795 43,708 44,640 46,735 39,471
Profitability Ratio
ROA1 16.14% 18.49% 14.73% 18.91% 12.49% 10.85%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 6,965 7,731 6,249 8,582 5,736 4,420
Adjusted total assets 42,858 41,547 43,458 44,476 46,395 39,255
Profitability Ratio
Adjusted ROA2 16.25% 18.61% 14.38% 19.30% 12.36% 11.26%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).

2025 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 6,957 ÷ 43,102 = 16.14%

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × 6,965 ÷ 42,858 = 16.25%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Lowe’s Cos. Inc. adjusted ROA improved from 2023 to 2024 but then slightly deteriorated from 2024 to 2025 not reaching 2023 level.