Lowe’s on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations, though same-store sales were softer than what Wall Street had anticipated and the company lowered its full-year estimates.
Shares of the home improvement retailer dropped 1 percent in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.04 adjusted, vs. 98 cents expected
- Revenue: $17.42 billion vs. $17.36 billion expected
Lowe’s reported third-quarter net income of $629 million, or 78 cents per share, down from $872 million, or $1.05 per share, a year earlier.
Excluding items, including pretax charges of $280 million, Lowe’s earned $1.04 per share, above the 98 cents per share expected by analysts surveyed by Refinitiv. Net sales rose 3.8 percent to $17.42 billion, above expectations of $17.36 billion.
Same-store sales rose 1.5 percent, below analysts’ expectations of 2.9 percent. CEO Marvin Ellison in a statement said “continued challenges” with inventory out of stocks, “poor reset execution” and assortment concerns in certain categories pressured the company’s ability to turn visits into transactions.
The company lowered its full-year sales forecast to about 4 percent, down from its prior estimate of about 4.5 percent. It now expects same-store sales to rise 2.5 percent, compared with a previous estimate of a 3 percent gain.
Lowe’s anticipates full-year adjusted earnings of $5.08 to $5.13 per share.
Ellison started at Lowe’s in July. Last quarter, the former J.C. Penney CEO outlined his plan to turn around the home improvement retailer, including to “aggressively rationalize store inventory.”
Lowe’s plans to end its Mexico retail operations and is exploring strategic alternatives for the business, the company announced Tuesday. It also plans to exit Alacrity Renovation Services and Iris Smart Home.
Lowe’s has already announced it will shutter its 99 Orchard Supply Hardware stores by year-end and close 20 Lowe’s stores in the U.S. and 31 in Canada. As of Nov. 2, Lowe’s operated 2,133 home improvement and hardware stores in the U.S., Canada and Mexico.
“Our transformation will take time, but we have assembled an experienced team and developed a comprehensive plan to make steady progress,” Ellison said in a statement.
-CNBC’s
Lauren Thomas
and
Lauren Hirsch
contributed to this report
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