Lowe’s said Wednesday that high inflation isn’t hurting sales as it reported third-quarter earnings that beat Wall Street expectations.

The company also upped its guidance for its full-year earnings. Shares of Lowe’s rose 3% Wednesday.

Company executives on Wednesday noted they are confident in Lowe’s business, despite macroeconomic pressures, as they saw customers continue to up discretionary spending and a good quarter for both the professional and do-it-yourself home improvement segments.

Lowe’s now expects full-year earnings of $13.65 to $13.80, up from $13.10 to $13.60. The home improvement retailer also lowered the top end of its revenue outlook to about $97 billion to $98 billion for the full year. The previous top end was $99 billion. The company had said in August that it expected sales to come in at the bottom end of the range. Lowe’s also cut guidance for comparable sales to be flat or down 1%, compared with earlier this year when it expected it to be down 1% to up 1%.

Chief Executive Marvin Ellison said on Wednesday’s earnings call that the company chose to be conservative regarding its sales outlook.

“There’s a lot of unknown out there, we’re not going to be overly bullish for no reason,” Ellison said. “We had a midterm election that, was still candidly not quite determined, aggressive action from the Fed, and global geopolitical events that happened. We’re being appropriately conservative.”

Here’s what Lowe’s reported on Wednesday compared with analyst expectations, based on a survey of analysts by Refinitiv:

  • Earnings per share: $3.27 vs. $3.10
  • Revenue: $23.48 billion vs. $23.13 billion

Revenue was up 3% compared with the same period last year.

“We’re not seeing the negative impacts of inflation,” Ellison said in an earlier interview with CNBC on Wednesday, adding instead customers have been spending money to renovate and trade up for better products.

Ellison said that the tough housing market and rising interest rates haven’t affected Lowe’s customer base, noting that many homeowners in the U.S. have fixed interest rates or have paid off their mortgages, and are unaffected by the Fed’s increases. He added that many homeowners have seen increases in their home equity values, driving them to investing and renovating.

“There tends to be confusion between homebuilding and home improvement,” Ellison said.

Customers haven’t shown any slowdown on discretionary spending due to inflation, pointing to strong sales of Halloween decorations and a strong start to the holiday season, executives said.

The company said its earnings were driven by 19% growth in its professional segment, and that its do-it-yourself sales improved. Lowe’s added its website sales grew 12%.

Ellison said on a call with investors Wednesday the third quarter was its best performance for the do-it-yourself segment. “That customer segment tends to be the indicator for us on the overall health of our business,” Ellison added.

Lowe’s earnings report comes a day after Home Depot‘s third quarter earnings beat analyst’s estimates. On Tuesday, Home Depot said its professional and do-it-yourself sales had positive growth during the period, adding that professionals have said their backlogs remain strong.

Home Depot executives on Tuesday had noted the company was “navigating a unique environment,” and was unable to predict how rising costs and other pressures were affecting its customers. The company said that while its customer transactions were down, it had higher ticket prices driven by inflation.

By OngkyF