LOW

Lowe's Companies, Inc.

177.36
USD
1.54%
177.36
USD
1.54%
170.12 263.31
52 weeks
52 weeks

Mkt Cap 122.81B

Shares Out 692.43M

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Lowe’s pushes past profit estimates, sales fall short

The North Carolina-based home improvement retailer posted GAAP EPS of $3.51 for the first quarter, $0.28 above expectations, but missed revenue estimates. The company reported $23.66 billion in sales, $60 million below the bar set by Wall Street and a 3.1% decline from the year prior. Comparable sales were also disappointing, declining 4% and standing in stark contrast to gains from Home Depot (HD). CEO Marvin Ellison explained that sales were impacted by unseasonably cold weather in the first quarter that took away from sales in outdoor categories. "Because 75% of our customer base is DIY, our Q1 sales were disproportionately impacted by the cooler spring temperatures,” he explained. However, Ellison commented that the improvement in weather into May has already accelerated sales trends and allowed management to affirm sales forecasts for the full year. Additionally, margins were cited as resilient to inflationary pressures. “Despite some increased uncertainty in the macro environment, we remain confident in the outlook for the home improvement market and our ability to deliver operating margin expansion in 2022,” Ellison said. Diluted earnings per share expectations of $13.10 to $13.60 falls largely in line with estimates set at $13.40, while total sales for the full year are expected to fall within the range of $97 billion to $99 billion, also in line with the consensus of $97.97 billion. Also, despite the steep decline in comparable sales for the first quarter, the full year figure is expected to range from a decline of 1% to an increase of 1%. Still, the lackluster revenue and comparable sales figures for the first quarter appeared to attract the bulk of attention, especially after its chief competitor in Home Depot (HD) smashed estimates on comparable sales and raised its sales outlook only a day prior. As unseasonable weather impacts both retailers, the dichotomous results are drawing scrutiny. Shares of the specialty retailer fell 1.56% about 3 hours before Wednesday’s market open. Elsewhere, the company repurchased approximately 19 million shares for $4.1 billion, and paid $537 million in dividends.Total share repurchases for 2022 are expected to reach $12 billion. Read more on the comparatively stronger sales results, especially in comparable sales, from Home Depot (HD) on Tuesday.

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