Lowe’s shares advanced on Wednesday after the home-improvement retailer raised its full-year outlook and posted earnings ahead of expectations, while also unveiling an $8.8 billion cash deal to acquire Foundation Building Materials.
The share price was up by 3.37% during pre-market trading on Wednesday.
The transaction is expected to close in the fourth quarter.
For the second quarter, Lowe’s reported adjusted earnings of $4.33 a share on revenue of $24 billion.
That was ahead of analyst forecasts of $4.24 a share on $23.9 billion in revenue, according to FactSet.
Comparable sales rose 1.1% year-over-year, in line with expectations, while total sales increased 1.6% to $23.96 billion.
Net income edged up 0.6% from a year earlier to $2.4 billion, underscoring steady demand across both professional and do-it-yourself segments.
Adjusted earnings per share climbed 5.6%, outpacing analyst estimates.
The company now expects full-year 2025 net sales of between $84.5 billion and $85.5 billion, compared with a prior range of $83.5 billion to $84.5 billion.
It also raised its adjusted EPS outlook to between $12.20 and $12.45 from a previous range of $12.15 to $12.40.
Expanding pro offerings through acquisition
The acquisition of Foundation Building Materials marks a strategic bet on the $250 billion professional construction market.
FBM distributes drywall, metal framing, and insulation—products aimed squarely at larger-scale projects.
“With this acquisition, we are advancing our multiyear transformation of the Pro offering,” said Chief Executive Marvin R. Ellison.
“It aligns perfectly with our Total Home strategy and positions us to capture greater planned spend within the professional segment.”
The transaction, expected to close in the fourth quarter, follows Home Depot’s June announcement that it would acquire GMS Inc. for $5.5 billion.
The duelling deals reflect intensifying competition to win over professional builders and contractors, a segment that has shown resilience despite pressure on big-ticket consumer purchases amid higher interest rates.
Stock repurchase put on hold
To finance the acquisition, Lowe’s will take on additional short- and long-term debt, pushing its leverage to between 3.4x and 3.5x.
As a result, the retailer said it would keep stock repurchases on hold, continuing a pause it had initiated earlier this year following its acquisition of Artisan Design Group.
Lowe’s has about $10.8 billion remaining under its share repurchase program, which has no expiration date.
The company said it plans to reduce its leverage ratio back to 2.75x by mid-2027, aided in part by withholding further buybacks until its balance sheet improves.
Competitive landscape
The upbeat results came just a day after rival Home Depot posted weaker-than-expected earnings, with adjusted EPS rising only 0.2% and missing consensus estimates.
Lowe’s stock is up 3.9% so far in 2025, while Home Depot has gained 4.7% and the S&P 500 has advanced 9%.
With the FBM acquisition and upgraded sales outlook, Lowe’s is positioning itself to drive growth in the professional segment while managing its debt load carefully, even as competition with Home Depot intensifies.
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