Investors have pushed Lowe's (NYSE:LOW) stock returns well above the broader market this year, which is no shock given that consumer spending has surged in its home improvement retailing niche. But the chain has even outpaced its bigger rival Home Depot (NYSE:HD) in 2020, mainly thanks to its double-digit revenue spike in the pandemic-influenced first quarter.

Lowe's will reveal in its earnings report on Wednesday, Aug. 19, whether those market share gains continued into the second quarter. Investors will also be focused on management's outlook for the second half of the year, which could be cautious due to recessionary selling conditions.

With that bigger picture in mind, let's look at three trends to follow in Lowe's report next week.

Inside a home improvement store.

Image source: Getty Images.

1. A sales checkup

Lowe's and Home Depot both remained open through the temporary shutdowns in the retailing industry in March, April, and May. Combine that factor with increased consumer incomes from stimulus payments and surging demand for home improvement supplies during stay-at-home orders, and you have a recipe for unusually strong sales gains. Lowe's notched a 12% spike at its U.S. stores last quarter compared with 2.6% in the prior quarter .

Home Depot's growth was more sluggish at 7%, which means investors will be watching for signs that Lowe's latest expansion surge over the market leader wasn't just a one-time fluke. We'll get that answer by comparing its results with Home Depot's, which are set for a day earlier.

2. Handling those COVID-19 costs

It is getting more expensive to operate in the home improvement industry these days. Extra costs related to COVID-19 include labor, cleaning, and maintenance expenses. Plus, there are all the supply chain challenges associated with a sharp turn toward online shopping and quick fulfillment methods like same-day delivery.

LOW Operating Margin (TTM) Chart

LOW Operating Margin (TTM) data by YCharts. TTM = trailing 12 months.

Lowe's overcame those challenges to post a solid profitability boost last quarter, with operating margin rising to 10% of sales versus 8% a year ago. The second quarter might slow or reverse that trend, which would impact its earnings potential. Home Depot's comparable metric is still much higher at nearly 15% of sales. But the industry leader has cautioned investors to expect operating margin to fall in 2020 as it invests more in the business. Lowe's could make a similar projection on Wednesday.

3. The outlook into 2021

CEO Marvin Ellison and his executive team withdrew their 2020 outlook in the early spring while citing an "unusually wide range of potential outcomes" for the year. There will be another strong sales quarter in the books now, which normally would support a bullish forecast for the second half of 2020. But executives still might be more cautious than optimistic about growth.

Home prices are strong across the country, but incomes are plunging, and economic growth rates have slumped in recent months. Sure, a big portion of this recession slump is temporary and could easily disappear as local economies restart. On the other hand, Lowe's will be looking at some of the worst GDP and personal income metrics in modern history as it tries to estimate growth trends through 2020 and into the next fiscal year.

That means the chain's range of potential sales and profit figures likely expanded over the last few months, and so investors might want to stay cautious even if Lowe's announces another blockbuster growth result on Wednesday.