Hello, hello. Good Wednesday morning from Yahoo Finance's New York City headquarters studios. I'm Yao Finance executive editor Brian Sazi.The day has arrived. It's Nvidia earnings day after the close and by judging what Nvidia founder and CEO Jensen Wong was doing last night. He thinks the earnings results will crush.Let's put up a photo here. There you can see Jensen uh just hanging out at the White House with Nvidia chip users. Elon Musk of Tesla and opening eyes.Greg Brockman. No clue if AI's David Saxs ...

Core Insights - The company is focusing on long-term growth from professional contractors, highlighted by an $8.8 billion acquisition of Foundation Building Materials to enhance wholesale capabilities and better serve Pro customers [1][3][5] - Despite modest sales growth, the company faces challenges from inflation, elevated interest rates, and a fluctuating housing market, leading to a lowered full-year profit outlook [8][11] - Online sales increased by 11.4%, and home services revenue saw double-digit growth, indicating a shift in consumer behavior towards outsourcing installation and remodeling tasks [9][10] Financial Performance - For Q3, net sales rose to $20.8 billion, up from $20.2 billion year-over-year, while comparable sales increased by only 0.4% [8] - The company is experiencing a complex integration of expanded capabilities while maintaining operational simplicity, which includes aligning technology systems and consolidating supply chains [10][11] Strategic Focus - The integration of Foundation Building Materials is a significant shift for the company, allowing it to control more of the Pro ecosystem from specification to fulfillment [7][11] - Professional contractors, although a small share of overall store traffic, contribute a disproportionately large share of revenue, making them central to the company's long-term strategy [4][9]

Core Insights - Lowe's Companies, Inc. reported third-quarter fiscal 2025 results with year-over-year growth in both revenue and earnings, with revenues meeting the Zacks Consensus Estimate and earnings exceeding it [1][3] Financial Performance - Adjusted earnings were $3.06 per share, surpassing the Zacks Consensus Estimate of $2.97, marking a 5.9% increase from $2.89 per share in the same period last year [3] - Net sales reached $20,813 million, slightly up from $20,170 million in the previous year, driven by a 0.4% rise in comparable sales, 11.4% growth in online sales, and double-digit growth in home services [4][9] Margin and Cost Analysis - Gross margin expanded to 34.2%, up 50 basis points from the prior-year quarter, while SG&A expenses increased to 20% of sales from 19% [5] - Operating income was $2,481 million, down from $2,536 million in the year-ago quarter, with the operating margin contracting to 11.9% from 12.6% [5] Financial Health - As of the end of the quarter, Lowe's had cash and cash equivalents of $621 million, long-term debt of $37,498 million, and a shareholders' deficit of $10,382 million [6] - Operating cash flow for the nine months ended October 31 totaled $8,297 million, with $8.8 billion deployed for the FBM acquisition and $673 million paid in dividends [6] Outlook - Lowe's updated its full-year sales outlook to $86 billion, up from the previous range of $84.5-$85.5 billion, while projecting flat comparable sales [8][9] - The company anticipates an adjusted operating margin of 12.1%, slightly below the previous forecast of 12.2%-12.3%, and expects net interest expenses to be approximately $1.4 billion [8][10]

Core Viewpoint - Home Depot reported weaker-than-expected earnings for the third consecutive quarter, leading to a significant drop in stock price, with management lowering its earnings guidance for the year [1][2]. Financial Performance - In fiscal Q3, Home Depot earned $3.74 per share, below the expected $3.84, with same-store sales growth at only 0.2% [1]. - The company now anticipates a 5% decline in adjusted earnings per share for the year [2]. - Following the earnings report, Home Depot's shares have decreased approximately 20% from their September high [2]. Strategic Positioning - Despite the earnings dip, management asserts that Home Depot maintains its market-leading position and is gaining market share from competitors [3]. - The recent acquisition of GMS contributed about $900 million to quarterly sales, indicating strategic expansion into the higher-margin professional contractor segment [3]. Digital and Operational Growth - Home Depot's digital platform sales grew by 11% year-over-year, showcasing successful omnichannel execution and operational improvements [4]. Dividend and Valuation - The company offers a healthy dividend yield of 2.73%, making it an attractive option for investors [4]. - Home Depot is currently trading at a price-sales (P/S) ratio of 2.23x, which is considered inexpensive relative to its historical multiples [6]. Market Outlook - The Federal Reserve's interest rate cuts are expected to drive a recovery in Home Depot shares, particularly as the housing market begins to thaw [5]. - Home Depot's exposure to both professional contractors and DIY clients positions it well to benefit from a potential housing market recovery [5]. Analyst Sentiment - Despite the recent earnings miss, Wall Street analysts remain bullish on Home Depot shares [7].

Core Insights - Lowe's experienced a nearly 6% surge in pre-market trading, reflecting investor enthusiasm about operational progress despite only a 0.4% increase in comparable sales for Q3 [2][4] - The company is undergoing a transformation in its growth strategy, focusing on digital sales and professional customer engagement [4][10] Digital and Services Growth - Online sales increased by 11.4%, indicating strong momentum from Lowe's multi-year digital initiative [4] - There is a notable shift towards larger, project-oriented expenditures rather than small DIY purchases, suggesting a change in customer spending habits [5][10] Professional Customer Engagement - High single-digit growth in Pro comparable sales marks a significant improvement for Lowe's, which has historically lagged behind Home Depot in this sector [6][7] - Lowe's is gaining market share in the Pro segment, indicating a shift in competitive dynamics [7][12] Operational Scale and Capabilities - Lowe's operates 1,756 stores with 195.8 million square feet of retail space, facilitating 16 million weekly transactions and supported by 300,000 associates [8] - The company has a robust national distribution network, enhancing its ability to serve both large contractors and everyday homeowners [8] Strategic Acquisition - The acquisition of Foundation Building Materials (FBM) in October is expected to reshape Lowe's Pro strategy by providing access to high-demand product lines with strong contractor relationships [9][10] - This acquisition is seen as a significant move that enhances Lowe's ongoing demand in the Pro market [9] Future Outlook - The Q3 results indicate a strategic shift towards a more digital, service-oriented, and Pro-focused business model, positioning Lowe's for steadier growth in 2026 [10][12] - Increased digital tool usage and larger purchase orders from professional customers suggest a more resilient growth engine for the company [10][12]

Core Insights - Lowe's Companies reported an earnings beat with $3.06 per share against an analyst forecast of $2.95, although sales were slightly lower than expected at $20.81 billion compared to the forecast of $20.84 billion [1][3] Financial Performance - The non-GAAP profit of $3.06 per share translates to a GAAP profit of $2.88 per share, reflecting a nearly 4% decline from the previous year [3] - Same-store sales (SSS) growth was 0.4%, which is double the growth rate of Home Depot, while total sales growth reached 3% [3][4] Market Context - Lowe's raised its full-year sales forecast to $86 billion but lowered its SSS forecast to predict flat sales against 2024 [5] - The company also adjusted its forecast for adjusted operating margin and indicated that earnings would be near the low end of previous guidance at approximately $12.25, adjusted for one-time items [5] Stock Valuation - Lowe's stock is trading at a price-to-earnings ratio of under 19x, which presents a modestly more optimistic outlook compared to Home Depot, although it is still considered a sell [6][7]

Core Viewpoint - Lowe's Companies Inc reported adjusted third-quarter earnings of $3.06 per share on revenue of $20.81 billion, exceeding estimates, but lowered its full-year guidance due to home affordability and economic uncertainty [1] Financial Performance - The adjusted earnings per share of $3.06 and revenue of $20.81 billion indicate a strong performance for the quarter [1] - The stock price increased by 3.3% to $226.75 following the earnings report [1] Market Reaction - Analysts reacted positively to Lowe's report, leading to 12 price-target cuts for sector peer Home Depot, with Bernstein setting the lowest target at $362 [2] - Lowe's stock had previously been under pressure, trading at $218 before the earnings report, and was on a five-day losing streak [3] Technical Indicators - The 14-Day Relative Strength Index (RSI) for Lowe's reached 18, indicating it was in "oversold" territory, contributing to today's rally [3] - The stock has experienced significant losing streaks in the past, including an eight-day slide in September and a ten-day slide in October [3] Sentiment and Options Activity - Bearish sentiment has been prevalent, with a 50-day put/call volume ratio of 1.39, placing it in the 90th percentile of its annual range [4]

Core Insights - Home Depot reported a 2.8% increase in net sales for Q3 2025, totaling $41.4 billion, but reduced its full-year earnings outlook due to softer demand and macroeconomic pressures [1][2] - The acquisition of GMS contributed approximately $900 million to the total sales, accounting for about eight weeks of revenue [2] Sales Performance - Comparable sales increased by 0.2%, with US comparable sales rising by 0.1% [2] - Gross profit rose nearly 3% year-on-year to $13.81 billion [2] Earnings and Guidance - Net earnings remained unchanged at $3.6 billion, while diluted earnings per share decreased from $3.67 to $3.62 [2] - Operating income declined by 1.2% to $5.35 billion from $5.42 billion [2] - Home Depot now expects full-year sales growth of around 3%, with GMS projected to contribute $2 billion in additional revenue [4] - Adjusted earnings per share are anticipated to decline by approximately 5% from the previous year, a revision from earlier guidance of a 2% decrease [4] Future Plans - For fiscal 2025, Home Depot plans to open 12 new stores [5] - The company is targeting a gross margin of 33.2% and an operating margin of 12.6%, with an adjusted operating margin expected to be around 13% [5]

Group 1: Market Overview - Wall Street showed signs of recovery with S&P 500 futures up 0.3%, Dow Jones Industrial futures up 0.1%, and Nasdaq futures up 0.4% ahead of Nvidia's earnings report [1] - Nvidia's stock is influential on Wall Street, with shares rising about 2% before market opening, driven by strong demand for its artificial intelligence chips [2] Group 2: Company Performance - Target's shares fell 1.9% after reporting a significant drop in third-quarter profit and projecting a continued sales slump through the holiday season, resulting in a 43% decline in shares over the past year [3] - Lowe's shares increased by more than 5% after exceeding Wall Street profit expectations and raising its full-year guidance [3] Group 3: Energy Sector - Constellation Energy's stock rose 3.4% following the announcement of a $1 billion loan from the U.S. Department of Energy to finance the restart of its nuclear power plant, which will supply power to Microsoft data centers [4] Group 4: Global Market Performance - In Europe, France's CAC 40 rose 0.1%, Germany's DAX increased by 0.4%, while the FTSE 100 remained unchanged [4] - In Asia, Japan's Nikkei 225 fell 0.3%, Hong Kong's Hang Seng dropped 0.4%, while the Shanghai Composite rose 0.2% [5]

Financial Data and Key Metrics Changes - Third quarter sales reached $20.8 billion, with comparable sales increasing by 0.4% year over year, despite a 100 basis point headwind from hurricanes [5][32] - Adjusted diluted earnings per share were $3.06, reflecting a 6% increase compared to the previous year [5][31] - Adjusted operating margin expanded by approximately 10 basis points, resulting in an adjusted operating margin rate of 12.4% [5][33] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in 10 of 14 merchandise divisions, with notable strength in appliances, flooring, paint, and kitchens and bath [17][32] - Online sales grew by 11.4% during the quarter, driven by increased traffic and strong conversion rates [7] - Home services experienced double-digit comparable sales growth, indicating strong performance in this key initiative [27] Market Data and Key Metrics Changes - Monthly comparable sales were up 2.5% in August, 0.9% in September, and down 2.6% in October, reflecting storm-related demand impacts [32] - Inventory at the end of Q3 was $17.2 billion, down approximately $400 million year over year, aided by inventory productivity initiatives [33] Company Strategy and Development Direction - The company is focused on its 2025 Total Home Strategy, which includes enhancing pro offerings, accelerating online sales, and leveraging loyalty programs [6][8] - The acquisition of Foundation Building Materials (FBM) aims to expand product offerings and enhance fulfillment capabilities, particularly in urban markets [12][13] - Investments in AI capabilities are expected to improve customer engagement and operational efficiency [10][11] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the long-term health of the home improvement sector, despite current consumer anxiety and economic uncertainty [15][16] - The potential for lower interest rates and strong homeowner equity could spur demand for home improvement projects [15][66] - The company anticipates flat comparable sales for the year, with expectations of approximately $86 billion in total sales, including FBM [37] Other Important Information - The company has been recognized for its AI adoption, achieving a milestone award from OpenAI [11] - The company is committed to supporting veterans through community initiatives, including the Freedom Hill project [29] Q&A Session Summary Question: Thoughts on business trends and performance outlook for 2026 - Management noted positive comp performance to start the quarter and improvements in top-line performance since exiting October, indicating that key elements of the Total Home Strategy are working [41][42] Question: Changes in kitchen and bath performance - Management believes Lowe's is gaining market share in the kitchen and bath space due to improved technology and a better go-to-market strategy [48][49] Question: Improving pro survey sentiment and its implications - Management reported that 75% of pros feel confident in their job prospects, with ongoing investments in loyalty programs and fulfillment driving growth [55][57] Question: Macro environment and housing market outlook - Management acknowledged elevated mortgage rates but highlighted strong homeowner equity as a potential driver for future discretionary spending [65][66] Question: Strategy for medium to larger pro customers - Management emphasized the importance of the Milo's Pro Rewards loyalty platform and the integration of FBM to enhance service offerings for pro customers [70][71]