What happened

Shares of Lowe's (NYSE:LOW) fell as much as 6.1% on Wednesday, following the home-improvement retailer's second-quarter earnings report. At the time of this writing, the stock is down 5.5%.

Some investors may be taking a pessimistic view toward the stock on Wednesday because both revenue and adjusted earnings per share were lower than analysts were estimating. Lower-than-expected profitability, in particular, may be an investor concern, as the company focused on the "necessary investments to improve the customer experience and drive sales," explained Lowe's CEO Robert Niblock in the company's second-quarter earnings release. This included more aggressive marketing and customer-facing hours in its stores.

Man, with tools and material spread across the floor, working on a home improvement project at home.

Image source: Getty Images.

Lowe's adjusted EPS for its second quarter was $1.57. On average, analysts expected adjusted EPS of about $1.62.

So what

In the near term, Lowe's expects its more aggressive marketing will pressure its operating margin. To this end, the company said it now expects its operating margin in fiscal 2017 to increase 80 to 100 basis points, down from a previous forecast for the key metric to jump by about 120 basis points. 

Now what

Niblock believes the near-term pressure on Lowe's operating margin will help the company take advantage of a healthy market for home-improvement goods. "We believe this is the right strategy to more fully capitalize on strong traffic trends in what we believe is a supportive macroeconomic backdrop for home improvement," Niblock said.

For the full fiscal year, which ends on Feb. 2, 2018, Lowe's expects sales to climb 5% year over year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.