Why Is Lowe's (LOW) Up 8.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Lowe's (LOW). Shares have added about 8.4% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Lowe's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

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

Lowe’s 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 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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.91% due to these changes.

VGM Scores

Currently, Lowe's has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Lowe's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Lowe's belongs to the Zacks Retail - Home Furnishings industry. Another stock from the same industry, Home Depot (HD), has gained 6.8% over the past month. More than a month has passed since the company reported results for the quarter ended October 2025.

Home Depot reported revenues of $41.35 billion in the last reported quarter, representing a year-over-year change of +2.8%. EPS of $3.74 for the same period compares with $3.78 a year ago.

For the current quarter, Home Depot is expected to post earnings of $2.53 per share, indicating a change of -19.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -6.9% over the last 30 days.

Home Depot has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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

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