Lowe's Q3 Earnings Top, Comps Rise on Pro Strength, FY25 Sales View Up

Lowe’s Companies, Inc. LOW posted third-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in line with the Zacks Consensus Estimate, earnings surpassed the same. The Mooresville, NC-based home improvement retailer posted another quarter of positive comparable sales, reflecting continued traction across Pro, online and home services performance. 

Management noted that November also started with positive comparable sales, even against last year’s hurricane-related demand. With the Foundation Building Materials (FBM) acquisition completed last month, Lowe’s emphasized that it is positioned to expand its reach within the Pro segment and drive long-term sales and profit improvement. Lowe’s also updated its full-year outlook to incorporate the recently closed FBM acquisition and reflect ongoing macro uncertainty.

LOW’s Quarterly Performance: Key Metrics & Insights

Lowe’s posted adjusted earnings of $3.06 per share, which beat the Zacks Consensus Estimate of $2.97. The figure marked a 5.9% increase from earnings of $2.89 per share reported in the same period last year. Including costs related to the acquisition of FBM and Artisan Design Group, quarterly earnings came in at $2.88 per share, down from $2.99 in the prior-year period.

Net sales of $20,813 million met the consensus estimate and increased slightly from $20,170 million in the previous year. The growth was driven by a 0.4% rise in comparable sales, reflecting 11.4% online sales growth, double-digit growth in home services and continued expansion in the Pro segment. We had expected a 1.3% increase in comparable sales.

LOW’s Margin & Cost Details

The gross margin expanded to 34.2%, up 50 basis points from the prior-year quarter. SG&A expenses increased to 20% of sales, up from 19% in the year-ago period, reflecting acquisition-related items and higher operating costs.

As a result, operating income came in at $2,481 million, down from $2,536 million in the year-ago quarter. The operating margin contracted to 11.9% from 12.6%.

LOW’s Financial Health Snapshot

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $621 million, long-term debt (excluding current maturities) of $37,498 million and a shareholders’ deficit of $10,382 million.

For the nine months ended Oct. 31, operating cash flow totaled $8,297 million. During the quarter, the company deployed $8.8 billion for the FBM acquisition and paid $673 million in dividends.

As of Oct. 31, 2025, Lowe's operated 1,756 stores, encompassing a total of 195.8 million square feet of retail selling space.

A Sneak Peek Into LOW’s FY25 Outlook

Lowe’s now expects total sales of $86 billion, up from the prior range of $84.5-$85.5 billion. Comparable sales are projected to be flat compared with the earlier expectation of flat to up 1%. The company anticipates an adjusted operating margin of 12.1%, slightly below the previous forecast of 12.2%-12.3%. Net interest expenses are now expected to be approximately $1.4 billion versus the prior $1.3 billion.

Lowe’s expects adjusted earnings of about $12.25 per share, within the earlier projected range of $12.20-$12.45. Capital expenditures remain guided at approximately $2.5 billion.

Lowe’s Stock Price Performance

Shares of Lowe’s have fallen 9.4% in the past month compared with the industry’s decline of 7.5%.

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The Zacks Consensus Estimate for CHEF’s current financial-year sales and EPS calls for growth of 8.1% and 29.3%, respectively, from the year-ago reported numbers.

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The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and EPS suggests growth of 16.4% and 16.5%, respectively, from the year-ago reported numbers.

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This article originally published on Zacks Investment Research (zacks.com).

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