Lowe's Builds On Momentum With Margin Strength, Despite Decelerated Sales

JPMorgan analyst Christopher Horvers expressed views on Lowe’s Companies, Inc.‘s LOW first quarter fiscal 2025 results reported today before market open.

The company posted adjusted earnings of $2.92 per share, which beat the analyst consensus estimate of $2.80.

Revenue of $20.93 billion missed the analyst consensus estimate of $20.94 billion.

Lowe's forecasts 2025 EPS of $12.15–$12.40 versus the $12.23 consensus estimate. Total sales are projected between $83.5 billion and $84.5 billion, compared with analysts' expectations of $84.31 billion.

Expectations for Lowe’s had risen after Home Depot‘s beat, and Lowe’s indeed performed slightly better, says the analyst.

The analyst writes that Lowe’s delivered an EPS beat, fueled by slightly better-than-expected comparable store sales (similar to Home Depot) and more substantial gross margins.

The analyst noted that Pro sales decelerated to a mid-single-digit increase, while DIY sales were impacted by early-quarter weather issues, suggesting a better exit rate.

Horvers writes that operating margin came in at 11.9% compared to management’s prior expectations of an 11.8% operating margin, largely due to an estimated $400 million (200 basis points) of Spring demand shifting from first-quarter to second-quarter.

This shift was influenced by Lowe’s facing normalized spring weather in the first quarter but “one of the worst weather backdrops in 30 years” in second quarter of the previous year, notes the analyst.

Horvers says that Lowe’s retaining its full-year guidance suggests strong trends by quarter-end, particularly as their earlier forecast anticipated flat comparable sales for the first half.

Price Action: Lowe’s shares are down 0.91% at $229.15 at the last check on Wednesday.

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