Lowe's Top Views on Comparable Sales Growth, Lifts Guidance -- Update
18 May 2016 - 10:00PM
Dow Jones News
By Anne Steele
Lowe's Cos. reported a strong earnings beat in the latest
quarter and lifted its guidance for the year as the
home-improvement retailer logged impressive growth in comparable
sales.
Shares, which have risen 12% over the past three months, added
another 2% premarket to $77.55.
Lowe's results come on the heels of a strong report from bigger
rival Home Depot this week. The home-improvement retailers have
enjoyed rising sales while companies in other corners of the retail
sector struggle. Though Americans have curbed spending on things
like apparel, they have been willing to shell out for refurbishing
their dwellings amid favorable housing trends.
Home prices are rising, giving owners more confidence to spend
on larger projects. More people are moving and starting new homes,
and America's old housing stock means plenty of opportunities for
other improvement projects.
In the latest quarter, Lowe's said "project expertise and
commitment to customer service allowed us to capitalize on strong
home-improvement demand during the quarter."
"We executed well in the quarter, growing both transaction and
average ticket to achieve comparable sales growth that exceeded our
expectations, " said Chief Executive Robert Niblock
Sales at stores open at least a year climbed 7.3%. And U.S.
same-store sales at Lowe's rose 7.5%, edging out Home Depot --
whose U.S. same-store sales grew 7.4% in the quarter -- for the
first time in a decade.
In all, Lowe's posted a profit of $884 million, or 98 cents a
share, up from $673 million, or 70 cents, a year earlier. The
quarter's results were padded by $160 million, or 11 cents a share,
due to an unrealized gain on a foreign-currency hedge entered into
ahead of the company's pending acquisition of Canadian
home-improvement chain Rona Inc.
Revenue rose 7.8% to $15.2 billion. Analysts polled by Thomson
Reuters had projected 85 cents a share in adjusted earnings on
$14.87 billion in revenue.
For 2016, the company now expects earnings of about $4.11 a
share, up from previous guidance for $4 a share. Lowe's backed its
guidance for comparable-store sales to rise 4%.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 18, 2016 07:45 ET (11:45 GMT)
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