Lowe's Tops Profit Estimates, Lifts Sales Outlook as Rivals Stumble

Lowe's posted third quarter results on Wednesday that outperformed Wall Street forecasts and prompted management to raise the retailer's full year sales guidance, according to company filings and industry reporting. The surprise strength reflected stronger than expected customer demand and the inclusion of recently acquired businesses, a combination that executives said improved sales mix and helped revive professional and trades oriented spending.

Investors reacted in premarket trading, with Lowe's shares moving higher as the market digested news that the company had delivered higher margins than analysts had penciled in. The outperformance stood in contrast to a weaker report from Home Depot and a mixed performance at Target, underscoring divergent fortunes among large brick and mortar retailers heading into the holiday season.

Lowe's results provide fresh evidence that home improvement demand remains resilient in pockets, particularly among professional contractors and trades customers who are less sensitive to consumer caution. Management highlighted mix shifts toward higher margin categories and a rebound in project oriented purchases as important drivers. The company also pointed to the contribution from recently acquired businesses as a factor lifting top line growth for the period.

The timing matters. Retailers will be judged not only on the holiday shopping season that starts now in earnest, but also on how sustainable any gains will be into 2026 as higher interest rates and housing affordability continue to shape homeowner behavior. Improvements in professional demand may signal that commercial and renovation projects are offsetting softer discretionary spending by households, a trend that can support higher average tickets even if unit volumes are flat.

The divergence among big retailers illustrates the granularity of the U S consumer recovery. Home Depot's weaker print suggests homeowner do it yourself spending remains under pressure, while Target's mixed results reflect the unevenness of discretionary categories and promotional dynamics heading into the holidays. For investors, Lowe's outperformance narrows downside risk to retail earnings in the near term but does not eliminate macroeconomic uncertainties.

From a market perspective the reports come as Wall Street prepares for several major technology earnings this week, creating a backdrop of heightened volatility. Retail earnings like Lowe's serve as a barometer of real economy demand ahead of those tech results, which can swing market sentiment broadly.

Policy considerations are also at play. The Federal Reserve's interest rate stance affects mortgage costs and home equity access, both of which feed into homeowners' decisions to renovate or replace big ticket items. If professional and contractor demand continues to strengthen, retailers with a stronger trades focus may be better positioned to weather slower consumer spending.

Longer term, the episode reinforces a strategic shift for some retailers toward professional customers and higher margin categories, and toward growth through acquisitions that add complementary product lines and services. For now, Lowe's has carved out a near term advantage, but sustaining that edge will depend on macro economic conditions, mortgage markets, and the pace of services related to home maintenance and renovation.