Lowe’s reported second-quarter earnings and sales on Wednesday that fell short of analysts’ expectations.
The home improvement retailer has also lowered its outlook for the full year, anticipating investing more in marketing and service for customers in stores, which will hurt margins.
The stock was last falling around 6 percent in premarket hours on the news.
Here’s what Lowe’s reported compared to what Wall Street was expecting, based on a Thomson Reuters survey of analysts:
- Earnings of $1.57 a share, adjusted, compared with a forecast profit of $1.61 per share.
- Revenue was $19.50 billion versus an estimate of $19.53 billion.
- Same-store sales climbed 4.5 percent, slightly better than the expected 4.3 percent growth.
“While our results were below our expectations in the first half of this year, the team remains focused on making the necessary investments to improve the customer experience and drive sales,” CEO Robert Niblock said in a statement.
“We are pleased with our improved comparable sales performance relative to last quarter, and the strong momentum we built throughout the second quarter culminating in a 7.9% comparable sales increase for the month of July.”
Lowe’s reported net income for the second quarter of $1.4 billion, or $1.68 per share, compared to $1.2 billion, or $1.31 a share, one year ago. Excluding a $96 million gain from the sale of Lowe’s interest in its Australian joint venture, the retailer earned $1.57 a share.
Revenue increased 6.8 percent, to $19.5 billion.
Sales at Lowe’s stores open for more than 12 months rose 4.5 percent, topping the 4.3 percent expected by analysts on average, according to Thomson Reuters.
Earlier this month, retail rival Home Depot reported profit, revenue and comparable sales that topped analysts’ expectations. But shares fell that same day on continued fears that the home improvement company might not be “Amazon proof,” after all.
In its fiscal first quarter, Lowe’s earnings and sales fell short of Wall Street estimates, especially when considering the momentum in the housing sector heading into the start of the year.
As of Tuesday’s market close, shares of Lowe’s have fallen about 2 percent over the past 12 months. This compares to the S&P 500 Retail ETF (XRT‘s) losses of more than 15 percent over the same period.
In 2017, Lowe’s stock has managed to make up for some of its losses, climbing more than 6 percent since the start of the year.
Source: FactSet
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