Key Takeaways Walmart gains share across categories with AI, automation and high-margin profit streams.Costco grows sales and EPS with global expansion and a strong membership-driven business model.Lowe's drives growth via Pro services, digital upgrades, and strategic acquisitions like FBM and ADG.Heading into 2026, expectations of more stable economic growth and improving financial conditions are shaping investor strategy. Within this environment, blue-chip retail stocks such as Walmart Inc. (WMT) , Costco ...

Core Insights - Lowe's reported a year-over-year sales increase for the quarter but slightly lowered its full-year profit outlook due to a challenging economic environment [1][3] - The company expects full-year total sales to reach $86 billion, an increase from previous expectations of $84.5 to $85.5 billion, attributed to a recent acquisition [2] - Comparable sales are expected to be flat compared to the previous year, down from an earlier forecast of flat to up 1% [2] Financial Performance - For the fiscal third quarter, Lowe's net income decreased to $1.62 billion, or $2.88 per share, compared to $1.7 billion, or $2.99 per share in the same period last year [3] - Revenue for the quarter increased from $20.17 billion in the year-ago quarter to $20.81 billion, slightly below the expected $20.82 billion [3][9] - The adjusted earnings per share for the full year is now expected to be approximately $12.25, at the lower end of the previous range of $12.20 to $12.45 [3] Strategic Moves - Lowe's is focusing on attracting more business from contractors and home professionals to counteract weaker do-it-yourself sales [4][5] - The company recently acquired Foundation Building Materials for about $8.8 billion, which is expected to enhance its offerings to large residential and commercial professionals [5] - Earlier in the year, Lowe's announced the acquisition of Artisan Design Group for nearly $1.33 billion, further emphasizing its strategy to cater to professional markets [6] Market Context - The home improvement market is anticipated to remain roughly flat, as indicated by Lowe's CFO, who noted that the company's strategy, rather than an improving industry backdrop, will drive sales [7] - Competitor Home Depot has also lowered its full-year profit forecast, citing similar challenges such as a tough housing market and consumer uncertainty [4]

Core Insights - Lowe's Companies, Inc. reported net earnings of $1.6 billion and diluted EPS of $2.88 for Q3 2025, a decrease from $2.99 in Q3 2024. Adjusted diluted EPS increased by 5.9% to $3.06 when excluding $129 million in pre-tax expenses related to acquisitions [1][19][20] Financial Performance - Total sales for the quarter reached $20.8 billion, up from $20.2 billion in the same quarter last year. Comparable sales increased by 0.4%, driven by an 11.4% growth in online sales and double-digit growth in home services and Pro sales [2][3] - Gross margin for the quarter was 34.19%, compared to 33.69% in the prior year, indicating improved profitability [13] - Operating income was $2.481 billion, representing 11.92% of sales, down from 12.57% in Q3 2024 [13] Capital Allocation - The company invested $8.8 billion in the acquisition of Foundation Building Materials and paid $673 million in dividends during the quarter [4][19] - Lowe's updated its full-year 2025 outlook, projecting total sales of $86.0 billion, adjusted operating margin of 12.1%, and adjusted diluted EPS of approximately $12.25 [5][9] Business Outlook - The company anticipates ongoing uncertainty in the macroeconomic environment, which has influenced its updated outlook for 2025 [5][9] - Lowe's continues to focus on enhancing its offerings to Pro customers following the recent acquisitions, aiming for sustainable long-term sales and profit growth [3][5] Operational Metrics - As of October 31, 2025, Lowe's operated 1,756 stores, covering 195.8 million square feet of retail space [3] - The company serves approximately 16 million customer transactions weekly, with total fiscal year 2024 sales exceeding $83 billion [7]

Group 1 - Lowe's Companies, Inc. has completed the acquisition of Foundation Building Materials, enhancing its position in the professional customer segment [2][3] - The acquisition is expected to expand product selection, improve order fulfillment, enhance digital capabilities, and introduce a trade credit platform, facilitating growth in key regions like California, the Northeast, and the Midwest [3][4] - This acquisition aligns with Lowe's strategy to create a comprehensive interior solutions platform for homebuilders, positioning the company to capitalize on housing market trends [4] Group 2 - Lowe's has a strong dividend history, having raised its dividend for 60 consecutive years, with a current quarterly dividend of $1.20 per share and a dividend yield of 1.98% as of October 16 [5]

Core Insights - Lowe's Companies has completed the acquisition of Foundation Building Materials (FBM) for $8.8 billion, announced in August 2025, enhancing its service offerings to professional customers [1][2][5] - The acquisition aims to expand Lowe's market presence in key regions and align operations with Artisan Design Group, targeting a $250 billion total addressable market [2][3] - The deal is expected to support Lowe's strategy for sustainable sales growth and long-term shareholder value, with an anticipated demand for 16 million new homes in the US by 2033 [3] Company Overview - FBM, established in 2011 and headquartered in Santa Ana, California, operates over 370 locations across the US and Canada, while Lowe's operates more than 1,700 home improvement stores [4] - The leadership of FBM will remain under its founder, Ruben Mendoza, and the existing senior management team post-acquisition [3][4] Financial Performance - In Q2 2025, Lowe's reported net earnings of $2.4 billion and total sales of $24 billion, with diluted earnings per share increasing to $4.27 from $4.17 in Q2 2024 [5]

Core Insights - Lowe's is facing challenges in attracting customers due to inflation, tariffs, and an uncertain housing market, despite a slight increase in sales during the second quarter [1] - Customer visits to Lowe's same-store locations decreased by 3.9% year-over-year, indicating a concerning trend in customer behavior [2] - The U.S. housing market challenges and higher labor costs have led professional contractors to focus on smaller projects rather than large home improvements [2][3] Financial Performance - Comparable sales increased by 1.1% year-over-year, while the average customer spending per purchase rose by 2.9%, but comparable transactions declined by 1.8% [7] - Existing-home sales dropped by 0.2% month-over-month in August, with the median existing-home sales price increasing to $422,600, a 2% year-over-year increase [3] Strategic Moves - Lowe's completed an $8.8 billion acquisition of Foundation Building Materials to enhance its offerings to professional customers [5][6] - This acquisition is part of Lowe's strategy to accelerate sales and serve a $250 billion total addressable market [7] - The company previously acquired Artisan Design Group for about $1.3 billion, further expanding its pro offerings [8] Industry Context - Lowe's acquisition strategy mirrors that of Home Depot, which has also increased its Pro offerings in response to similar customer behavior trends [9] - Home Depot recently closed a $5.5 billion acquisition of GMS, enhancing its position in the building materials distribution market [10][11]

Core Insights - Lowe's has completed its largest acquisition to date by acquiring Foundation Building Materials (FBM), enhancing its market position and service capabilities [1][2]. Strategic Value of the Acquisition - FBM operates over 370 locations in the U.S. and Canada, serving approximately 40,000 professional customers with a projected revenue of $6.5 billion and adjusted EBITDA of $635 million for 2024 [2]. - The acquisition is expected to expand Lowe's product offerings, accelerate fulfillment speed, optimize digital tools, and establish a comprehensive industry credit platform, thereby improving service to professional customers [2]. - FBM's presence in key regions such as California, the Northeast, and the Midwest complements Lowe's operations, presenting significant growth opportunities and expanding market coverage for professional customer business [2]. - The acquisition is anticipated to create numerous cross-selling opportunities among FBM, Lowe's, and the recently acquired Artisan Design Group (ADG) [2]. Market Outlook and Analyst Perspectives - Lowe's CEO Marvine Ellison highlighted the favorable conditions for increasing market penetration and capitalizing on the expected recovery in the housing market, with a projected need for 16 million new homes in the U.S. by 2033 [3]. - Analysts view the acquisition as a strategic move to better serve the complex professional customer market, enhancing Lowe's competitive position against Home Depot [3]. - The combination of ADG and FBM positions Lowe's as a leader in the attractive new residential and repair & remodeling verticals, providing faster fulfillment, a broader product selection, superior digital tools, and a robust industry credit platform [3]. - There are expectations for potential cost synergies and significant cross-selling opportunities, with the market anticipating further bolt-on M&A activities by Lowe's in the future [3]. Stock Performance - Lowe's stock has declined by 3.48% year-to-date [4].

Core Insights - Lowe's has completed the acquisition of Foundation Building Materials (FBM), valued at approximately $8.8 billion, which was announced in late August [1][2] Group 1: Acquisition Details - The acquisition of FBM enhances Lowe's offerings for professional customers, with FBM operating 370 locations across the U.S. and Canada, distributing products such as metal framing, insulation, and commercial doors [2][3] - FBM will continue to operate under its existing senior leadership team, including founder Ruben Mendoza [3] Group 2: Strategic Implications - The acquisition is part of Lowe's Total Home strategy aimed at serving large professional customers within a $250 billion total addressable market [2] - Lowe's expects to expand its market penetration and capitalize on the anticipated recovery in housing, with an estimated 16 million new homes needed in the U.S. by 2033 [4] - The deal follows Lowe's earlier acquisition of Artisan Design Group, completed in June, indicating a strategic focus on expanding its professional customer base [3][4]

Core Viewpoint - Lowe's Companies, Inc. has completed the acquisition of Foundation Building Materials (FBM), enhancing its offerings to professional customers and expanding its market presence in key regions [1][2][3]. Group 1: Acquisition Details - The acquisition of FBM is expected to enhance Lowe's product assortment, fulfillment speed, digital tools, and trade credit platform, providing significant growth opportunities [2][3]. - FBM operates over 370 locations across the U.S. and Canada, which complements Lowe's existing operations in key geographies such as California, the Northeast, and the Midwest [2][6]. - FBM will continue to be led by its founder, Ruben Mendoza, and its senior leadership team, ensuring continuity in service for Pro customers [3]. Group 2: Strategic Implications - This acquisition is a critical step in accelerating Lowe's Total Home strategy, targeting a $250 billion total addressable market [3]. - The combined efforts with FBM and the recent acquisition of Artisan Design Group (ADG) aim to create a comprehensive interior solutions platform for homebuilders [3]. - The housing market is projected to require 16 million new homes in the U.S. by 2033, positioning Lowe's to capitalize on this expected recovery [3]. Group 3: Company Overview - Lowe's operates over 1,700 home improvement stores and serves approximately 16 million customer transactions weekly, with total fiscal year 2024 sales exceeding $83 billion [5]. - The company employs around 300,000 associates and is based in Mooresville, North Carolina, focusing on community support and skilled trade development [5].

Core Viewpoint - Lowe's reported strong second-quarter results, exceeding earnings expectations and demonstrating resilience in a challenging operating environment for the home improvement sector [1][2][3]. Financial Performance - Adjusted earnings per share (EPS) for the quarter were $4.33, surpassing the Zacks Consensus Estimate by 2.36% and increasing by 5.4% compared to the same quarter in 2024 [1]. - Total revenues reached $23.96 billion, slightly above estimates and up from $23.59 billion in the previous year, with comparable sales increasing by 1.1% [6]. Market Response - Following the positive earnings surprise, Lowe's shares rose approximately 1% in early trading [3]. Strategic Initiatives - The company is focusing on service offerings and operational efficiency, supported by its Total Home strategy and AI-powered shopping assistant [5]. - Partnerships with Apple and NVIDIA are enhancing customer experience and operational capabilities, including the use of advanced technology for kitchen design visualization and AI integration [7]. Acquisitions - Lowe's completed the acquisition of Artisan Design Group, which is expected to enhance its reach to professional customers in the design and installation sectors [8]. - An agreement to acquire Foundation Building Materials (FBM) for $8.8 billion is anticipated to improve offerings to Pro customers and is expected to close in Q4 2025 [10]. Industry Context - The home improvement sector is facing challenges due to high mortgage rates and rising home prices, which have dampened demand [2]. - Despite these challenges, the acquisition of FBM positions Lowe's to capitalize on long-term spending in a fragmented $50 billion market, with an estimated 18 million new homes needed in the U.S. by 2033 [9]. Risks and Challenges - The housing downturn may delay a sustained recovery for home improvement companies, with ongoing inflation and potential cost increases from tariffs impacting Lowe's operations [11][12]. - Rising selling, general, and administrative (SG&A) costs and high debt levels are testing the company's financial flexibility [12].