A Lowe’s store in Concord, California, reported strong fourth-quarter results, exceeding Wall Street’s expectations for both revenue and earnings on Wednesday. The home improvement retailer announced a year-over-year sales increase of more than 10%. For the full fiscal year, Lowe’s anticipates total sales to fall between $92 billion and $94 billion, marking a projected growth of approximately 7% to 9% compared to the previous year. Additionally, the company expects its adjusted earnings per share to be in the range of $12.25 to $12.75.
Despite these optimistic projections, Lowe’s indicated that comparable sales—an important measure that accounts for fluctuations—are expected to remain approximately flat to increase by up to 2%. CEO Marvin Ellison emphasized that the company’s strategy is successfully resonating with both do-it-yourself customers and home professionals, despite facing external challenges such as rising mortgage rates and a slowdown in real estate sales.
Ellison stated, “While the housing macro remains pressured, we are focused on directing what is within our control, which includes our ongoing productivity initiatives. We remain confident that we are well-positioned to take share regardless of the macro environment.”
However, in premarket trading, Lowe’s shares declined following the announcement, as the company’s earning forecasts fell short of analysts’ consensus estimate of $12.95 per share.
In comparing fourth-quarter results to Wall Street’s expectations, Lowe’s reported adjusted earnings per share of $1.98, surpassing the expected $1.94. Revenue for the quarter totaled $20.58 billion, also exceeding the forecast of $20.34 billion. Yet, net income saw a decrease to $999 million, or $1.78 per share, compared to $1.13 billion or $1.99 per share in the same quarter last year. Notably, revenue rose from $18.55 billion in the prior year.
Additionally, comparable sales for the quarter increased by 1.3%, outperforming analysts’ predictions of a modest 0.2% rise.
This performance comes shortly after competitor Home Depot also reported earnings that surpassed expectations but provided cautious full-year guidance, reflecting a cautious consumer sentiment in the home improvement market due to high borrowing costs and economic uncertainties.
As of the latest market close, Lowe’s shares are up nearly 16% year-to-date, surpassing the S&P 500’s gains of about 1% during the same period and showcasing a 15% increase over the past year, closely aligning with the S&P’s approximately 16% rise.
