Lowe’s Shock: Pro Strength Surges, DIY Stabilizes, and the Stock Rockets Higher—Is This the Turning Point?

Lowe’s shares are up roughly 5% in early trading after the company delivered a third-quarter earnings report that came in ahead of expectations on the bottom line and showed early signs of stabilization across several core metrics. The reaction stands in sharp contrast to the selloff seen after Home Depot’s results the prior day. As we highlighted in yesterday's preview , Lowe’s price action into the print suggested sellers had largely stepped aside—shares had already retraced most of Tuesday’s post-HD decline—setting up the possibility of an upside response if the results simply landed “good enough.” That is largely what happened.

Adjusted EPS came in at $3.06, ahead of the $2.97 consensus, and up nearly 6% year over year. Total revenue of $20.81 billion was essentially in line with expectations and increased more than 3% from last year. Comparable sales rose 0.4%, modest but still better than feared given the sluggish home-improvement backdrop and the negative read-through from HD’s print. The stock’s 5% pre-market jump reflects both relief and the acknowledgment that Lowe’s delivered a cleaner quarter with fewer margin surprises than its peer.

The key driver beneath the comp number was the mix of strong Pro performance and accelerating digital engagement. Online sales grew 11.4%, a sharp contrast to Target’s deceleration and meaningful progress for a company that has lagged peers in digital scale. The Pro segment also delivered continued growth—helped by the early integration of Foundation Building Materials—and management cited double-digit gains in home services. This is exactly the pivot Lowe’s has been making: relying on Pro, services, and fulfillment improvements to offset the stagnant DIY environment that has weighed on the industry for nearly two years.

DIY trends remained soft, as expected, with discretionary and big-ticket categories still under pressure from weak housing turnover, elevated mortgage rates, and a cautious consumer. However, management noted that the company posted positive comps in early November—encouraging given the hurricane-distorted comparisons a year ago—and CEO Marvin Ellison highlighted strength in “repair and maintenance” categories, which tend to stabilize earlier than renovation and décor.

On the margin front, the quarter landed in a respectable place. Gross margin held at 28.2%, essentially flat with last year, and benefitted from growth in advertising and marketplace revenues, lower shrink, and improved supply-chain efficiency. Operating margin of 12.1% (adjusted) was slightly lower year over year, reflecting integration costs related to FBM and ADG, but still better than expected given the environment. SG&A expense rate was in line with the prior year once non-recurring items were removed. Overall, margins did not deteriorate to the extent feared after HD’s report.

Inventory discipline remained solid. While management did not flag major reductions or buildups, the company continued to execute against its long-stated goal of avoiding excessive working-capital drag during a slow demand period. The addition of FBM expands Lowe’s inventory footprint and product assortment for Pro customers, but early signs suggest integration is proceeding without disruption. The company also reiterated its expectations for $2.5 billion in capital expenditures next year, emphasizing investments in automation, fulfillment, and Pro-focused distribution assets.

The updated outlook was mixed but not surprising. Lowe’s lifted its full-year revenue forecast to $86 billion, up from $84.5–$85.5 billion prior—entirely due to the FBM acquisition. However, it trimmed its full-year adjusted EPS guidance to $12.25, the low end of the prior range but slightly below consensus. Comparable sales are now expected to be flat versus the earlier flat to +1% guidance. Management explicitly cited persistent macro uncertainty—higher interest rates, a slow housing market, and consumer caution—as reasons for the adjustments. Investors were already bracing for this after HD’s tone, and the fact that Lowe’s guided mostly in line with expectations helped fuel the stock’s positive reaction.

The Pro versus DIY discussion remains central to the Lowe’s narrative. Pro demand is holding up much better than DIY, driven by strength in repair/maintenance and ongoing construction backlogs. The acquisitions of FBM and ADG significantly deepen Lowe’s ties with professional contractors, builder networks, and trade partners—an essential offset to the multiyear stagnation in do-it-yourself categories. DIY continues to face pressure from elevated mortgage rates, low home turnover, and a consumer base that remains reluctant to take on large projects. The company did note pockets of stability, but no sustained demand recovery.

Management commentary on the consumer echoed themes heard across retail: shoppers remain value-focused, cautious, and selective. However, unlike Target—where traffic trends have been deteriorating—Lowe’s saw more balanced behavior, with positive comps in early November providing some reassurance that the underlying business is not slipping further. The company continues to lean on merchandising improvements, faster delivery options, and expanded services to keep budget-conscious customers engaged.

One of the more encouraging elements of the report was Lowe’s digital trajectory. Online sales growth of 11.4% represents a meaningful acceleration and suggests that the company’s omnichannel investments are gaining traction. With more than 50% of U.S. households now eligible for next-day delivery, and with multiple Pro-oriented fulfillment upgrades underway, the digital contribution is likely to remain a tailwind.

The bottom line: Lowe’s delivered a better-than-expected quarter relative to fears, particularly in the wake of HD’s disappointing print on Tuesday. Strong Pro growth, resilient margins, improving digital results, and stable early-Q4 comps all helped build a narrative of incremental stabilization. The updated outlook was conservative but not alarming, and macro caution remains appropriate. With shares up roughly 5% and the worst-case scenarios avoided, investors are reassessing whether Lowe’s slow-and-steady Pro strategy can offset ongoing DIY weakness as the housing market grinds through prolonged stagnation.