Lowe's Companies, Inc. (LOW) shares climbed more than 6% in premarket trading Thursday after the home improvement giant posted better-than-expected profits for the third quarter, even as revenue came in just shy of Wall Street's mark and the company acknowledged some persistent headwinds.

The retailer reported third-quarter adjusted earnings per share of $3.06, up 5.9% year over year and comfortably ahead of the $2.97 analyst consensus. Revenue of $20.813 billion narrowly missed the Street's expectation of $20.823 billion, but the real story is what's driving growth beneath the surface.

Comparable sales edged up 0.4% for the quarter, fueled by impressive 11.4% online sales growth, double-digit expansion in home services, and continued strength with Pro customers—the contractors and professional buyers who tend to spend more and return more frequently. It's a mix that suggests Lowe's is finding traction where it counts, even if the overall numbers look modest.

Gross profit climbed to $7.116 billion from $6.796 billion a year earlier, with margins expanding to 34.19% from 33.69%. That's the good news. Operating income, however, slipped to $2.481 billion from $2.536 billion, and operating margins contracted to 11.92% from 12.57%, reflecting some of the cost pressures and strategic investments the company is navigating.

As of October 31, Lowe's operated 1,756 stores across 195.8 million square feet of retail selling space.

Big Bet on Professional Customers

During the quarter, the company made a major move, investing $8.8 billion to acquire FBM. The acquisition is all about deepening relationships with Pro customers, a segment that's been a bright spot for the retailer.

"With the closing of the FBM acquisition last month, we look forward to enhancing our offering to Pro customers and creating more sustainable, long-term sales and profit expansion for the company," said Marvin R. Ellison, Lowe's chairman, president, and CEO.

The company also paid $673 million in dividends during the quarter. On the balance sheet, cash and equivalents stood at $621 million as of quarter-end, down sharply from $3.271 billion a year ago. Long-term debt (excluding current maturities) climbed to $37.498 billion from $32.906 billion in the prior-year period, reflecting the financing activity around recent acquisitions.

Cautious Guidance Amid Uncertain Conditions

Looking ahead, Lowe's updated its fiscal 2025 outlook to reflect what it's calling "ongoing uncertainty in the macroeconomic environment." The company trimmed its comparable-sales outlook to flat (0%) from a prior range of 0% to 1%, signaling that it doesn't expect much movement in same-store sales for the full year.

But there's some good news mixed in. Lowe's raised its full-year revenue guidance to $86.0 billion from a prior range of $84.5 billion to $85.5 billion, topping analyst expectations of $85.415 billion. The company also narrowed its adjusted EPS guidance to $12.25 from a prior range of $12.20 to $12.45, versus the $12.29 analyst estimate.

The company now expects an adjusted operating margin of 12.1%, down from its earlier forecast of 12.2% to 12.3%, and anticipates capital spending of up to $2.5 billion for the year.

Price Action: LOW shares were trading higher by 6.42% at $233.67 in premarket activity Thursday.