This article first appeared on GuruFocus.

Revenue: $20.8 billion for the third quarter.

Comparable Sales: Increased by 0.4% year-over-year.

Adjusted Operating Margin: Expanded by approximately 10 basis points.

Adjusted Diluted Earnings Per Share: $3.06, a 6% increase versus last year.

Online Sales Growth: Increased by 11.4% this quarter.

Gross Margin: 34.2%, up 50 basis points.

Adjusted SG&A: 19.6% of sales, deleveraging 36 basis points.

Inventory: Ended Q3 at $17.2 billion, down approximately $400 million versus prior year.

Operating Cash Flow: $687 million in Q3.

Capital Expenditures: $597 million in Q3.

Return on Invested Capital: 26.1%.

Full Year Sales Expectation: Approximately $86 billion, including FBM sales.

Full Year Adjusted Operating Margin Expectation: Approximately 12.1%.

Full Year Adjusted Diluted EPS Expectation: Approximately $12.25, representing 2% growth over the prior year.

Warning! GuruFocus has detected 7 Warning Signs with CNNRF.

Is LOW fairly valued? Test your thesis with our free DCF calculator.

Release Date: November 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Lowe's Companies Inc (NYSE:LOW) reported third-quarter sales of $20.8 billion with a 0.4% increase in comparable sales year-over-year, despite challenges from hurricanes.

The company achieved an adjusted diluted earnings per share of $3.06, marking a 6% increase compared to the previous year.

Lowe's Companies Inc (NYSE:LOW) saw online sales growth of 11.4%, driven by increased traffic and strong conversion rates.

The Total Home strategy initiatives, including Pro extended aisle and enhanced online sales, are showing positive results.

The acquisition of Foundation Building Materials (FBM) is expected to expand product offerings and enhance fulfillment capabilities, particularly benefiting Pro customers.

Lowe's Companies Inc (NYSE:LOW) is facing a cautious consumer environment amid ongoing macroeconomic uncertainties.

The company anticipates flat comparable sales for the year, at the bottom end of previous guidance.

The acquisition of FBM and Artisan Design Group (ADG) is expected to negatively impact consolidated adjusted operating margin by approximately 50 basis points annually.

There is pressure on larger discretionary purchases due to elevated borrowing costs, affecting consumer confidence.

The company is experiencing a decline in comparable transactions, with a 3% decrease in the third quarter.

Q: Can you elaborate on the trend in the business given the past six months' performance and expectations for 2026? A: Marvin Ellison, CEO, noted that despite storm overlaps, November started with positive comp performance. The company is optimistic about the top line strategy and expects continued strength in appliances and seasonal categories. CFO Brandon Sink added that while navigating a choppy macro environment, there are reasons for cautious optimism in 2026, with ongoing strength in Pro, online, and appliances, and early signs of life in home services.

Q: What is driving the recent improvement in Pro survey sentiment? A: Marvin Ellison, CEO, stated that the small-to-medium Pro business remains stable, with 75% of Pros confident in their job prospects. The Pro segment continues to work on smaller ticket repair and maintenance projects. Joe McFarland, EVP of Stores, highlighted the success of the Transform Pro offering, including loyalty programs, enhanced digital experiences, and fulfillment investments.

Q: How do you view the macro environment, particularly the potential for a prolonged housing slowdown? A: Marvin Ellison, CEO, acknowledged elevated mortgage rates but emphasized the healthy financial state of homeowners and the substantial home equity available. He suggested that HELOCs could drive discretionary remodel projects. CFO Brandon Sink added that while new home starts remain under pressure, there is potential for home equity to become a significant funding mechanism for projects.

Q: Can you discuss the integration of FBM and ADG and its impact on margins? A: Marvin Ellison, CEO, explained that the integration is in early stages, with a focus on not harming performance. The IT platform transition is expected to accelerate integration. CFO Brandon Sink noted that FBM and ADG are expected to negatively impact consolidated adjusted operating margin by approximately 50 basis points annually, with the majority affecting gross margin.

Q: What are the initial performance and future expectations for the marketplace platform? A: Marvin Ellison, CEO, expressed excitement about the marketplace launch, noting it exceeds expectations in financial performance and seller quality. The platform allows returns in physical Lowe's stores, enhancing customer convenience. William Boltz, EVP of Merchandising, added that the marketplace complements in-store offerings and provides new product opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.