Lowes Reports Q4 Results and Raises its Forecast

Home improvement retailer Lowes reported its fourth quarter financial results this week, revealing that sales grew 5% in the quarter.

The company also raised its forecast as it grabs a bigger share of home pro spending. The company had said sales among home professionals, a steadier and more lucrative customer, grew 23% in the fourth quarter.

Lowe’s raised its forecast for fiscal 2022, saying it now anticipates between $97 billion and $99 billion in sales.

The company’s shares rose less than 1% to close the day at $215.09 on Wednesday.

For the quarter ended Jan. 28, Lowes reported earnings per share of $1.78, compared to $1.71 that was expected by a survey of analysts by Refinitiv. This is also compared to $1.32 per share, a year earlier.

Revenue at $21.34 billion was higher than the $20.90 billion expected, per Refinitiv.

Lowe’s same-store sales in the U.S. increased 5.1% in the fourth quarter, as customers made fewer trips to the company’s website and stores but spent more when they did.

Transactions in the U.S. fell 4.4% in the fourth quarter compared with the year-ago period. Ellison said sales of big-ticket items that cost at least $500 grew 15.6% in the quarter. The average ticket at U.S. stores and on Lowe’s website rose 9.5% to $95.66 in the fourth quarter, partially due to inflation.

Sales from home professionals jumped 23% in the three-month period, too. The pros tend to be steadier and more lucrative customers.

“When home prices go up, consumers have confidence to invest in their homes,” Lowe’s CEO Marvin Ellison said on CNBC’s “Squawk Box.”

According to Ellison, repair and maintenance projects will drive spending, even as prices rise from inflation and a mortgage rate hike looms.

Ellison said in a separate interview that a year ago the mix of purchases looked different as shoppers bought cleaning products and supplies for simple do-it-yourself projects.

Lowe’s has expanded its portfolio of merchandise, so shoppers have a wider variety if an item is out of stock.

“You may not get the exact brand you want, but if you’re looking for a stainless steel, French door refrigerator, we’re going to have that model for you,” said Ellison. “It just may not be in the specific brand that you wanted when you came in.”

Looking ahead, the retailer said it expects earnings per share to range from $13.10 to $13.60 on revenue of $97 billion to $99 billion in fiscal 2022. It had previously forecast earnings per share of $12.94 on revenue of $97 billion for the year, which is a week longer than fiscal 2021.

It said same-store sales will range from a decline of 1% to an increase of 1% for the full year.

Lowe’s shares are up 27% over the past 12 months.

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