Lowe's Can Hold The Line On Expenses, Jefferies Reports

Lowe's Companies Inc.'s LOW is demonstrating that in a soft sales environment it can hold the line on expenses, Jefferies & Company reports. “Although GM% was the primary upside to our model, SG&A rate was flat ex 1x items in both years,” Jefferies writes. “Good progress on expenses in recent qtrs, which will likely lend support to the shares.” F3Q'11 sales were about 140bps below consensus, “but we think informal expectations were fairly low given cautious commentary from management during the quarter and from vendors more recently,” Jefferies adds. Lowe's currently trades at $21.46.