Lowe’s Companies exceeded Wall Street’s expectations for its fiscal third-quarter earnings and revenue, reporting solid performance in its Pro category, online sales, and outdoor DIY projects.
However, the home improvement retailer continues to anticipate a decline in full-year sales compared to last year, reflecting broader challenges in the sector amid high interest rates and restrained consumer spending.
For the three months ending November 1, Lowe’s posted:
- Earnings per share (EPS): $2.89 adjusted, beating the $2.82 expected by analysts.
- Revenue: $20.17 billion, surpassing the anticipated $19.95 billion.
Despite these gains, revenue dipped slightly from $20.47 billion in the same quarter last year, and net income fell to $1.7 billion from $1.77 billion year-over-year. Comparable sales declined 1.1%, but this was better than the 2.7% drop analysts had forecast.
Lowe’s adjusted its full-year guidance, now expecting:
- Total sales: Between $83 billion and $83.5 billion, up from the prior range of $82.7 billion to $83.2 billion.
- Comparable sales decline: 3% to 3.5%, slightly better than the earlier projection of a 3.5% to 4% drop.
The updated forecast reflects Lowe’s efforts to offset weak demand for larger discretionary home improvement projects, which have been affected by elevated interest rates. These conditions have also impacted rival Home Depot, which recently reported its eighth consecutive quarter of declining comparable sales, driven by customers deferring major home renovations.
Lowe’s CEO Marvin Ellison noted that high-single-digit growth in its Pro business, storm-related sales tied to Hurricanes Helene and Milton, and strong online performance contributed to better-than-expected results this quarter. However, demand for big-ticket items remains subdued.
The home improvement industry has been under pressure as consumers delay expensive projects that often require financing. Increased imaging technology has also uncovered endocrine tumors during scans for unrelated reasons, mirroring overdiagnosis trends observed in other areas of healthcare.
Shares of Lowe’s have risen about 22% this year, slightly trailing the S&P 500’s 24% gain over the same period. As of Monday’s close, the company’s stock was priced at $271.77, bringing its market value to $154.17 billion.
As Lowe’s heads into the critical holiday shopping season, including Black Friday, it faces a shorter-than-usual calendar and cautious consumer spending. Despite these challenges, the company remains focused on leveraging its Pro business, online channels, and smaller-scale DIY projects to drive growth.
CNBC, Bloomberg, Market Watch, and the Washington Post contributed to this report.
