Lowe's Stock Is Jumping After Earnings. Here's Why Its Results Were Different Than Home Depot's.

LOW +0.01% HD -0.63% ^SPX -1.56%

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Key Takeaways

• Lowe's shares rose Wednesday after the home improvement retailer's third-quarter profits topped analysts' estimates, a day after rival Home Depot's profits fell short.

• Lowe's CEO Marvin Ellison said comparable sales have been solid to start the current quarter, which JPMorgan analysts said was a notable comment, given how cautious Home Depot executives were yesterday.

Lowe's (LOW) shares surged Wednesday after the home improvement retailer reported profits that topped analysts' expectations, just a day after rival Home Depot's (HD) profits fell short.

Lowe's stock was up over 5% in recent trading, making it one of the best-performing stocks in the S&P 500 Wednesday morning. (Read our daily markets coverage here.)

The retail giant posted adjusted earnings of $3.06 per share in the third quarter, up from $2.89 the same time last year and well above the analyst consensus compiled by Visible Alpha. Revenue was roughly in line with estimates at $20.81 billion, while comparable sales grew slower than expected at 0.4%.

Lowe's said a jump in sales online and to professional contractors helped drive the results, along with double-digit growth in "home services," in which customers can call on professionals in the company's network to help with tasks such as installing appliances or flooring.

Why This Is Significant

The results from Lowe's, along with rival Home Depot, could reflect broader shifts in the U.S. housing market, along with demand for home improvement supplies and services.

Lowe's CEO Marvin Ellison also said that the current quarter has started with positive comparable sales growth, which he said is notable given Lowe's saw strong sales activity this time last year as hurricanes drove demand.

Lowe's lifted its full-year revenue forecast to $86 billion, up from a range of $84.5 billion to $85.5 billion previously and above the analyst consensus. However, the retailer said it sees adjusted EPS coming in at the lower end of its range, at $12.25 compared to its previous projection of $12.20 to $12.45, citing "ongoing uncertainty in the macroeconomic environment." The company said it now anticipates roughly flat comparable sales, compared to flat to 1% growth previously.

JPMorgan analysts wrote following Lowe's report that Ellison's comments about current-quarter demand are particularly notable considering how cautious Home Depot executives were a day earlier. When rival Home Depot reported earnings yesterday, it pointed to a drop in storm-driven demand and a sluggish housing market for its weaker-than-expected earnings. Home Depot executives also said that homeowners appear to be hiring contractors for fewer projects, and noted that some consumers may be feeling "some fatigue in taking on bigger projects."

Despite Wednesday's gains, Lowe's shares have lost about 7% of their value since the start of this year. Home Depot's stock is down close to 15% for 2025.

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