Lowe's (NYSE:LOW) Posts Q3 CY2025 Sales In Line With Estimates

Home improvement retailer Lowe’s (NYSE:LOW) met Wall Streets revenue expectations in Q3 CY2025, with sales up 3.2% year on year to $20.81 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $86 billion at the midpoint. Its non-GAAP profit of $3.06 per share was 3.6% above analysts’ consensus estimates.

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"The company delivered another quarter of positive comp sales, and we're pleased to start November with positive comps as well, despite headwinds related to hurricane activity in the prior year. 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.

Company Overview

Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $84.26 billion in revenue over the past 12 months, Lowe's is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. For Lowe's to boost its sales, it likely needs to adjust its prices or lean into foreign markets.

As you can see below, Lowe’s 2.7% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was sluggish as it didn’t open many new stores.

This quarter, Lowe's grew its revenue by 3.2% year on year, and its $20.81 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, an acceleration versus the last six years. This projection is particularly healthy for a company of its scale and implies its newer products will spur better top-line performance.

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Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Lowe's has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.

When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.

Note that Lowe's reports its store count intermittently, so some data points are missing in the chart below.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Lowe’s demand has been shrinking over the last two years as its same-store sales have averaged 2.1% annual declines. This performance isn’t ideal, and we’d be concerned if Lowe's starts opening new stores to artificially boost revenue growth.

In the latest quarter, Lowe’s year on year same-store sales were flat. This performance was a well-appreciated turnaround from its historical levels, showing the business is improving.

Key Takeaways from Lowe’s Q3 Results

It was encouraging to see Lowe's beat analysts’ gross margin expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, same-store sales did not grow (sales at mature stores did not increase year on year) and the company lowered its full-year EPS guidance. Overall, this quarter could have been better. The stock traded up 3.8% to $227.81 immediately after reporting.

Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.