A customer pushes a shopping cart toward the entrance of a Lowe’s store in Concord, California, on Tuesday, February 23, 2021.
David Paul Morris | Bloomberg | Getty Images
Lowe’s on Wednesday reported second-quarter earnings that beat analysts’ expectations as the company said improved operations offset lower-than-expected sales hurt by a shortened spring.
The home improvement retailer said sales to DIY customers were also hurt by lower demand for certain discretionary items. This was partly offset by an increase in sales to professionals such as contractors and electricians.
Comparable store sales fell by 0.3% overall, although US home improvement showed a modest growth of 0.2% compared to the same quarter last year.
“I am pleased that our team has improved operating margin and managed inventory effectively despite lower-than-expected sales — a clear reflection of our relentless focus on operational discipline and productivity,” said Lowe’s CEO Marvin R. Ellison in a statement. press release.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $4.67 cents, adjusted, vs. $4.58 expected
- Revenue: $27.48 Billion vs. $28.12 Billion Expected
Lowe’s said it now expects total and comparable sales for the year to be near the lower end of its outlook. It had forecast sales of $97 to $99 billion and comparable store sales up 1% to 1%. Operating income and earnings are expected to be at the higher end of the previous forecast.
The company’s shares rose about 3% in premarket trading.
For the three-month period ended July 29, Lowe’s reported net income of $2.99 billion, down from $3.02 billion last year. Net sales fell to $27.48 billion from $27.57 billion a year ago.
The results come after Home Depot reported better-than-expected revenue and earnings for the second quarter on Tuesday and stuck to its forecast. Many people took up home improvement projects as they kneel during the pandemic, and investors have been looking to see if that spending is holding up
Lowe’s has a different customer mix than Home Depot, which tends to get more of its revenue from home professionals. Lowe relies more on DIY customers, making it more vulnerable to shifts in demand.
“Our first half results were disproportionately impacted by our 75% DIY customer mix, which was partially offset by our double-digit Pro growth for the ninth straight quarter,” Ellison said in a statement.
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