Lowe’s (LOW) delivered a stronger-than-expected third quarter as online and Pro customer sales accelerated.
Lowe’s reported third-quarter results that topped profit expectations, driven by improving online sales, resilient demand from professional contractors, and early momentum in November. The retailer continues to navigate a tough consumer backdrop while leaning on acquisitions and operational efficiency.
Key Points
- Q3 adjusted EPS of $3.06 beat expectations as Pro sales and online growth strengthened.
- Revenue rose 3.2% to $20.81 billion, in line with Wall Street estimates.
- Full-year sales outlook increased, though earnings guidance was slightly reduced.
Lowe’s Q3 Performance: A Solid Beat in a Mixed Retail Environment
Lowe’s posted adjusted earnings of $3.06 per share, outperforming analyst expectations and rising nearly 6% from last year. Revenue of $20.81 billion met forecasts, while comparable-store sales rose 0.4%, supported by an 11% jump in online business and double-digit gains in home services.
Management noted that November is off to a positive start with rising comps, despite lapping hurricane-related demand from last year. Gross margin strength contributed meaningfully to the EPS beat.
Operating margin held steady at 11.9%, though free cash flow margin declined to 0.4%, reflecting higher capital needs and acquisition-related spending.
How Is Lowe’s Positioning for Growth in a Tough Housing Market?
With home-improvement activity pressured by high mortgage rates and slower renovation demand, Lowe’s is deepening its investments in Pro services, e-commerce, and digital tools. A major milestone was the $8.8 billion acquisition of Foundation Building Materials, expanding Lowe’s reach among contractors who typically spend more frequently and at larger volumes.
Lowe’s is also enhancing in-store layouts, expanding its online assortment, and leveraging AI technology to boost engagement. Its AI shopping assistant now fields more than one million customer queries per month.
Is Lowe’s Gaining Ground Versus Home Depot?
Home Depot’s (HD) most recent results missed expectations and indicated weaker demand for large projects. In contrast, Lowe’s delivered a stronger quarter, with sales growth outpacing its larger peer for the second straight period. Strength in appliances, tools, and home décor further supported results.
While Lowe’s is more exposed to DIY customers—about 70% of revenue—its strategic shift toward Pro expansion may help balance that mix over time. Management slightly trimmed full-year EPS guidance to $12.25, reflecting integration costs and ongoing consumer caution.
What It Means for Investors
Lowe’s remains a large-scale retailer with more than $84 billion in annual revenue, giving it cost advantages and broad distribution reach. However, long-term revenue growth has been slower, averaging 2.7% annually over six years, underscoring the challenge of expanding at scale.
The integration of Foundation Building Materials, combined with growth in Pro and online segments, now sits at the center of Lowe’s investment narrative. If executed effectively, these initiatives could support long-term growth toward the company’s projection of $94 billion in revenue by 2028.
For investors analyzing stocks, Lowe’s offers operational consistency, disciplined capital allocation, ongoing dividends, and exposure to housing-related spending. The near-term outlook, however, still hinges on stabilization in the housing market and continued improvement in same-store sales.
Conclusion
Lowe’s delivered a reassuring quarter with strong online and Pro momentum. While broader economic pressures remain, the company’s focus on acquisitions, digital expansion, and operational discipline positions it well for a potential housing rebound. It remains a closely watched name among the best stocks to buy when seeking long-term exposure to home improvement.
FAQs
What drove Lowe’s earnings beat this quarter?
Stronger online sales, growth in home services, resilient Pro-customer demand, and disciplined cost management helped earnings exceed expectations.
Why did Lowe’s raise revenue guidance but lower EPS guidance?
Revenue guidance increased due to acquisition-driven growth, while EPS guidance was reduced to reflect integration costs and margin pressure.
How is Lowe’s performing compared to Home Depot?
Lowe’s has outpaced Home Depot in revenue growth for two straight quarters and posted stronger Q3 results thanks to better execution in Pro and online channels.
What is affecting demand for home-improvement projects?
High interest rates, slower housing turnover, and cautious consumer spending are delaying larger renovation projects.
Is Lowe’s expanding its product offerings?
Yes. Lowe’s continues expanding its online assortment and recently added SenesTech’s Evolve Rat control product to Lowes.com, alongside growth through acquisitions.
Considering a $1,000 Investment in These Companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and uncover the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.
For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or Trading Room. Take advantage of our special offer today, starting at just $1 for the first month.
Unlock the Secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
If you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading and technical trading courses, where you can learn trading, analyze stocks, study chart patterns, and gain invaluable insights for making smart investment decisions.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up to date with regular market updates. Learn investing basics and discover how to pick the best stocks to buy. Whether you're a beginner or seasoned trader, we've got you covered. Get started for free today!
This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.
Trading Risk Disclaimer
All information shared is provided for educational purposes only. Any trades placed in reliance on SharperTrades, LLC and/or DarkOption Flow are made at your own risk. Past performance is no guarantee of future results. Trading stocks, cryptos, commodities, options, forex, and other securities involves substantial risk of loss. You must determine your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC and DarkOption Flow are not registered investment advisers and do not accept deposits. The technical solution offered by the DarkOption Flow platform is provided by a third party.