Lowe's said its comparable sales – a key metric for the retail industry – fell 1.1% for the period through Nov. 1. That compared with a 2.7% drop that Wall Street analysts were expecting.

High interest rates have weighed on home improvement spending as U.S. consumers continue to postpone buying houses and put off expensive projects that may require financing. Sales at Lowe's and Home Depot Inc. have suffered over the past two years as a result.

Lowe's shares fell 4.9% in Tuesday trading in New York, the most intraday since June 25. The stock rose about 22% this year through Monday's close, while the S&P 500 index increased 24%.

Still, the company raised its sales forecast for the year, buoyed during the quarter by high-single-digit positive comps in the professional business — serving contractors and others working on larger projects — strong online sales and spending on smaller-ticket outdoor projects, Chief Executive Officer Marvin Ellison said in a statement. 

Results were "modestly better than expected, even excluding storm-related activity," Ellison said. 

The company is seeing "sustained strength" in the professional and online business, he added on the earnings call. Increases in the professional category are driven by investments to better serve its core small-to-medium sized Pro shopper.

The company said it now expects comparable sales to drop as much as 3.5%, versus the previous guidance of a 3.5% to 4% decline. That's slightly better than what Wall Street analysts were expecting.

Pressure on core home improvement categories won't "be completely eased until the housing market is back on much firmer footing, which will not be until well into 2025 at the earliest," wrote Neil Saunders, managing director at GlobalData, in a note.

Despite stubbornly high mortgage rates and housing demand that has not shifted, people are buying smaller-ticket items. Home Depot said last week that hurricanes and warm weather helped drive up demand for products like generators and outdoor grills.  

Lowe's reported its quarterly results ahead of the holiday shopping season's all-important Black Friday weekend. Operators are facing budget-conscious consumers as well as a shopping period that is shorter than usual because Thanksgiving falls late in November.