Lowe's Q3: Earnings: Revenue And EPS Beat But Comp Sales Fall Amid Softness In Bigger-Ticket DIY Discretionary Demand

Lowe’s Companies, Inc. LOW shares are trading lower in the premarket session on Tuesday.

The company reported third-quarter adjusted earnings per share of $2.89 beating the street view of $2.82.

Quarterly sales of $20.170 billion outpaced the analyst consensus estimate of $19.424 billion.

Comparable sales for the quarter decreased 1.1%, driven by continued softness in DIY bigger-ticket discretionary demand, partly offset by storm-related sales and positive comparable sales in Pro and online.

Gross margin in the quarter under review remained relatively flat year over year to 33.69%. Quarterly operating income totaled $2.536 billion compared with $2.696 billion a year ago.

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During the third quarter, the company recognized a $54 million pre-tax gain associated with the 2022 sale of the Canadian retail business. This positively impacted third-quarter diluted EPS by 10 cents.

“Next month at our Analyst and Investor Conference, I look forward to discussing our new growth and productivity initiatives, which underscore our confidence that we are well-positioned to capitalize on the expected recovery in home improvement,” said Marvin R. Ellison, Lowe’s chairman, president and CEO.  

As of Nov. 1, Lowe’s operated 1,747 stores representing 195.0 million square feet of retail selling space.

Guidance: Lowe’s has revised its fiscal year 2024 outlook for its adjusted earnings per share (EPS) guidance from a range of $11.70 – $11.90 to a range of $11.80 – $11.90, compared with the consensus estimate of $11.85.

Additionally, the company raised its sales forecast from a range of $82.70 billion – $83.20 billion to a new range of $83.00 billion – $83.50 billion, compared with the consensus estimate of $83.05 billion.

For FY24, Comparable sales is expected to be -3.0 to -3.5%, as compared to prior year (previous view -3.5% to -4.0%).

Adjusted operating income as a percentage of sales (adjusted operating margin) of 12.3% to 12.4% (previously 12.4% to 12.5%).

Price Action: LOW shares are trading lower by 1.02% to $269.00 premarket at last check Tuesday.

Photo via Wikimedia Commons

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