Lowe’s Beats Expectations in Q3 and Lifts Sales Forecast

Home improvement retailer Lowe’s topped estimates on Wednesday in its fiscal third quarter earnings report as more customers invested in bigger home projects.

The company reported that same-store sales rose by 2.2% in the three month period while analysts had been expecting a decline of 1.5%.

CEO Marvin Ellison said sales to home pros, such as electricians and contractors, rose 16% in the quarter.

For the third quarter, the company reported earnings per share of $2.73 while analysts had expected $2.36 according to Refinitiv. Revenue at $22.92 billion was also ahead of the $22.06 billion that was expected.

Profits rose to $1.90 billion, or $2.73 per share, from $692 million, or 91 cents a share, a year earlier. The results outmatched the $2.36 per share expected by analysts surveyed by Refinitiv.

Net sales climbed to $22.92 billion from $22.31 billion last year and were higher than analysts’ expectations of $22.06 billion.
Consumer transactions declined 7.5% in the three-month period, as there were lower sales of smaller ticket, do-it-yourself customers and was a drop in lumber sales, Chief Financial Officer
Dave Denton said.

Average ticket increased nearly 10% over the year-ago period as more consumers bought appliances and flooring and the price of some items like copper rose due to inflation, Denton added.

Digital sales jumped by 25% in the quarter.

Looking ahead the company raised its forecast, saying it anticipates $95 billion in sales. It had previously predicted revenue of $92 billion.

Lowe’s also said it plans to buy back $3 billion in shares in the fourth quarter, bringing total repurchases for the year to $12 billion.

In an interview with CNBC, Ellison said, “Even as a CEO of a home improvement company, it was extremely difficult to get those things done. It dawned on me that if my Dad is having these issues and I’m the CEO of a home improvement company, then the greater baby boomer population and caretakers must also have the same issue.”

The company’s shares closed up 0.4% to $245.76 and even hit a 52-week high of $255.22.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.