LOW Q3 Deep Dive: Pro Business, Digital Growth, and Acquisition Integration Shape Outlook

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.

Is now the time to buy LOW? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Lowe’s delivered third-quarter results that met Wall Street’s revenue expectations and exceeded non-GAAP profit forecasts, prompting a positive market reaction. Management attributed the performance to operational discipline, growth in its professional (Pro) customer segment, and expanding digital sales. CEO Marvin Ellison highlighted, “continued operational discipline and strong execution across our perpetual productivity improvement initiatives.” The company also benefited from its Total Home strategy, which drove improvements in home services and store productivity, while recent acquisitions started to contribute to results.

Looking ahead, Lowe’s is focused on integrating Foundation Building Materials (FBM) and driving synergies from recent acquisitions to expand its Pro offering and strengthen fulfillment capabilities. Management identified ongoing investments in digital experiences, loyalty programs, and artificial intelligence as key levers for improved customer engagement and efficiency. CFO Brandon Sink cautioned that an “uncertain macro environment” and elevated interest rates may continue to pressure big-ticket purchases, but management believes that home equity trends and future rate cuts could stimulate demand.

Key Insights from Management’s Remarks

Management pointed to balanced momentum across Pro and DIY customers, strategic investments in technology, and targeted category resets as the primary drivers of both sales and operational improvements this quarter.

• Pro customer momentum: Growth in the small to medium Pro segment was supported by enhanced loyalty rewards, digital tools, and expanded product assortments. Management credited its Pro Extended Aisle initiative, which connects directly with supplier catalogs for large orders, as a key differentiator.
• Digital and online sales acceleration: Online sales increased by double digits, with improvements in lowes.com and the mobile app leading to higher traffic and conversion. The build-out of Lowe’s online marketplace allows for a broader assortment without inventory risk.
• Home services resurgence: The home services division delivered double-digit comparable growth, driven by technology-enabled scheduling and quoting, and improved installation experiences in categories such as windows, doors, and HVAC.
• Artificial intelligence integration: Lowe’s deployed AI-powered virtual assistants (Milo and Milo Companion) to support both customers and associates, resulting in higher conversion rates online and improved in-store satisfaction scores. The company also uses AI to optimize inventory and labor productivity.
• Acquisition impact: The addition of Foundation Building Materials (FBM) and Artisan Design Group (ADG) expanded Lowe’s reach in commercial and residential interiors, improved fulfillment in urban markets, and created cross-selling opportunities for Pro customers. Early integration efforts are focused on IT and operational synergies.

Drivers of Future Performance

Lowe’s forward outlook is built on acquisition integration, technology investments, and cautious optimism about consumer trends, though management notes uncertainty in the macroeconomic environment remains a risk.

• Acquisition and integration synergies: Management expects ongoing integration of FBM and ADG to provide both revenue growth and operating efficiencies, with a focus on cross-selling to Pro customers and strengthening fulfillment in underserved regions. These acquisitions are anticipated to weigh on margins in the short term but create long-term value as cost synergies are realized.
• Technology and AI-driven efficiency: Continued investment in AI for inventory management, sales support, and productivity improvements is expected to enhance customer service and reduce operating costs. The company’s AI framework is being expanded to drive further improvements both online and in-store.
• Consumer sentiment and housing market trends: Management highlighted elevated borrowing costs as a near-term headwind for discretionary home improvement spending. However, the company believes that robust homeowner equity and possible interest rate reductions could unlock demand for larger projects, particularly through home equity lending channels.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be closely monitoring (1) the pace and success of FBM and ADG integration, including cross-selling and margin synergies, (2) the trajectory of digital and AI-driven productivity initiatives, and (3) evolving consumer demand in home improvement as interest rates and home equity lending trends shift. Execution in these areas will be critical for Lowe’s ability to sustain growth and improve profitability.

Lowe's currently trades at $229.20, up from $219.57 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

Our Favorite Stocks Right Now

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.