The Lions coach told the Western Mail: "[Interim Wales coach] Rob Howley was right to stick with the same team for the Italian game, and right to name it early to defuse a week's worth of focus on Sam not being picked.
"But Sam will play many more times for Wales, and he'll captain Wales again. In terms of the Lions, of course he's still in contention. Nobody is ruled out.
"When you are picking a squad of 36 or 37 a lot of different factors come in to the equation, you have to think about combinations being right and having cover in certain positions. Sam isn't starting against Italy, but Rob put his faith in a winning side and I totally understand that."
The tour of Australia is due to take place during June and July.