Shares of Lowe’s (NYSE: LOW) rose 9% in regular trading on Wednesday after the company reported second quarter earnings that beat estimates thanks in part to growth in its Paint and Pro business, as well as strong spring demand.
Lowe’s delivered positive results despite concerns of difficult weather and deflation in the price of lumber. Revenue during the quarter grew 0.5% while adjusted earnings per share rose 3.9%.
The home improvement retailer also reported an increase in U.S same-stores sales that was slightly above its competitor, Home Depot. Lowe’s repurchased $1.96 billion of stock and paid $382 million in dividends during the quarter.
LOW Earnings & Outlook
Net income for the quarter ended August 2 rose to $1.68 billion, or $2.14 per share, from $1.52 billion, or $1.86 per share a year ago. Adjusted for one-time costs and gains, earnings came to $2.15 per share compared with $2.07 per share a year earlier.
Revenue increased to $20.99 billion from $20.89 billion in the same period last year. Analysts polled by Refinitiv had expected adjusted earnings per share of $2.01 on sales of $20.94 billion.
Same-store sales grew 2.3%, topping expectations of a 1.9% rise. U.S same-store sales increased 3.2%.
Looking ahead, Lowe’s expects adjusted earnings per share of between $5.45 to $5.65. Sales are expected to rise 2% while same-store sales to increase 3% in fiscal 2019.Wall Street expects the company to post adjusted earnings per share of $5.57 for fiscal 2019.
Lowe’s Companies CEO Comments
Lowe’s President and Chief Executive Marvin R. Ellison commented, “We capitalized on spring demand, strong holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results. Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S. This is a reflection of a solid macroeconomic backdrop and continued momentum executing our retail fundamentals framework.”
“Our transformation is ongoing, and our future is bright. We are confident that we are on the right path to capitalize on solid demand in a healthy home improvement market and generate long-term profitable growth. I would like to thank our associates for their hard work and continued commitment to serving customers,” added Ellison.
Lowe’s Companies Inc. Profile
Lowe’s is the second- largest home improvement retailer in the world, operating just over 2,000 stores throughout the United States, Canada, and Mexico at year-end 2018. The firm’s stores offer products and services for home decorating, maintenance, repair, and remodeling.
Lowe’s targets retail do-it-yourself and do-it-for-me customers as well as commercial business clients. We estimate that Lowe’s captures a low-double-digit share of the domestic home improvement market, based on U.S. census estimates for market size. – Warrior Trading News
