Lowe's Companies Cuts FY23 Guidance On Low Consumer Demand And Lumbar Deflation; Beats On Q1

Lowe's Companies Inc LOW reported a first-quarter FY23 sales decline of 5.5% year-on-year to $22.35 billion, beating the analyst consensus estimate of $21.60 billion.
Comparable sales decreased 4.3%, driven by lumber deflation, unfavorable weather, and lower DIY discretionary sales.
Adjusted EPS of $3.67 beat the analyst consensus of $3.44.
The gain associated with the 2022 sale of the Canadian retail business positively impacted 1Q EPS by $0.10.
Gross profit fell 6.5% Y/Y to $7.5 billion, with a profit margin contracting 35 basis points to 33.68%.
Operating margin expanded 75 basis points to 14.71%, and operating income for the quarter fell 0.4% to $3.3 billion.
The company held $3.3 billion in cash and equivalents as of May 5, 2023. Net cash provided by operating activities for the quarter totaled $2.1 billion.
The company repurchased 10.6 million shares for $2.1 billion and paid $633 million in dividends in the quarter.
Outlook: Lowe's cuts FY23 revenue outlook from $88 billion - $90 billion to $87 billion - $89 billion, against the Street view of $88.57 billion.
It also cut FY23 EPS guidance from $13.60 - $14.00 to $13.20 - $13.60 against the consensus of $13.64.
LOW cut FY23 comparable sales outlook from flat to down 2% range to down 2%-4%.
Price Action: LOW shares are trading lower by 1.54% at $200.02 in premarket on the last check Tuesday.

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