Lowe’s Companies, Inc. shares edged higher in premarket trading on Thursday after the home improvement chain topped Wall Street profit expectations in the third quarter, but fell slightly short on sales.

Investors are also weighing a tightened earnings outlook, a flat view on comparable sales, and a higher full-year revenue target as the company leans into pro customers and online growth.

The company reported third-quarter adjusted earnings per share of $3.06 (+5.9% year over year), beating the analyst consensus estimate of $2.97.

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Quarterly sales of $20.813 billion missed the Street view of $20.823 billion.

Comparable sales for the quarter increased 0.4%, driven by 11.4% online sales growth, double-digit growth in home services and continued growth in Pro sales.

Gross profit in the quarter under review totaled $7.116 billion, higher than $6.796 billion a year ago. Margins expanded to 34.19% from 33.69%.

Quarterly operating income totaled $2.481 billion, lower than $2.536 billion. Operating margins contracted to 11.92% from 12.57%.

As of Oct. 31, Lowe’s operated 1,756 stores, representing 195.8 million square feet of retail selling space.

Investments

During the quarter, the company invested $8.8 billion for the acquisition of FBM and paid $673 million in dividends.

“With the closing of the FBM acquisition last month, we look forward to enhancing our offering to Pro customers and creating more sustainable, long-term sales and profit expansion for the company,” said Marvin R. Ellison, Lowe’s chairman, president, and CEO. 

The company exited the quarter with cash and equivalents worth $621 million, compared with $3.271 billion a year ago.

Long-term debt (excluding current maturities) at quarter-end was $37.498 billion, higher than $32.906 billion in the year-ago period.

Outlook

The company has updated its outlook for fiscal 2025 to reflect the ongoing uncertainty in the macroeconomic environment. 

Lowe’s trimmed its fiscal 2025 comparable-sales outlook to 0% from 0%–1% and said it expects capital spending of up to $2.5 billion.

Lowe’s narrowed its fiscal 2025 adjusted EPS guidance to $12.25 from a prior range of $12.20 to $12.45, versus the $12.29 analyst estimate, and raised its sales outlook to $86.0 billion from $84.5 billion to $85.5 billion, topping expectations of $85.415 billion.

Lowe’s now expects an adjusted operating margin of 12.1%, down from its prior forecast of 12.2% to 12.3%.

Price Action: LOW shares were trading higher by 6.42% to $233.67 premarket at last check Thursday.

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