LOS ANGELES, CALIFORNIA – AUGUST 20: The exterior sign of Lowe’s home improvement store is seen on August 20, 2024 in Los Angeles, California. The company beat expectations for fiscal second-quarter earnings, but missed sales and cut its full-year outlook blaming inflation. (Photo by Eric Thayer/Getty Images)
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Lowe’s beat Wall Street’s quarterly earnings expectations on Tuesday, as outdoor do-it-yourself projects, home professional businesses and online shopping sales grew stronger.
But even with better-than-expected results, the home improvement retailer is forecasting a year-over-year decline in sales. The company updated its full-year guidance on Tuesday, and now expects total sales to be between $83 billion and $83.5 billion, up from its previous forecast of $82.7 billion to $83.2 billion. It said it expects comparable sales to fall 3% to 3.5%, slightly better than the 3.5% to 4% decline it had previously anticipated.
Lowe’s has lapped the period last year when the company lowered its prospects and sales fell by almost 13% year over year. It also cut its full-year forecast in August, predicting weak home improvement demand in the back half of the year due to high interest rates.
Here’s what the company reported for the three-month period ended Nov. 1 compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.89 adjusted vs $2.82 expected
- result: $20.17 billion vs $19.95 billion expected
In the fiscal third quarter, Lowe’s net income fell to $1.7 billion, or $2.99 ​​per share, compared with $1.77 billion, or $3.06 per share, in the year-ago period. Revenue was down from $20.47 billion in the year-ago quarter.
lowe’s rival, Home Depotreported last week that customers are still putting off bigger projects and buying more expensive ones, even after two interest rate cuts by the Federal Reserve. Home Depot beat Wall Street sales and earnings expectations, but posted the eighth quarter in a row of similar sales. However, there are some improving sales trends, thanks to hurricane-related demand, warm-weather housing projects and the acquisition of SRS Distribution, a company that sells supplies to landscape, pool and roofing professionals.
As of Monday’s close, Lowe’s stock had risen about 22% this year. That’s less than the roughly 24% gain of the S&P 500 over the same period. The company’s stock closed Friday at $271.77, bringing Lowe’s market value to $154.17 billion.
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