Lowe’s reported first-quarter earnings, revenue and comparable sales Wednesday that missed Street estimates, sending shares of the stock tumbling in premarket trade.
Here’s what the company reported vs. what the Street was expecting:
- Earnings per share: $1.03 adjusted vs. an estimate of $1.06, according to Thomson Reuters analysts.
- Revenue: $16.86 billion vs. a $16.96 billion forecast, Thomson Reuters said.
- Same-store sales: 1.9 percent increase vs. a forecast for 2.9 percent growth, according to FactSet.
Shares of the stock were falling around 7 percent following this news.
Lowe’s net income fell to $602 million, or 70 cents per share, during the first quarter, from $884 million, or 98 cents per share, a year ago.
The retailer said it recorded a $464 million pre-tax loss on the extinguishment of debt during the latest period, which was in connection with a $1.6-billion cash tender offer. Lowe’s has updated its earnings outlook for 2017 to reflect this loss and the resulting lower interest expense.
Lowe’s reaffirmed Wednesday that it expects revenue to increase roughly 5 percent by the end of the year, with sales at its established stores rising 3.5 percent. It now anticipates earning $4.30 per share for the fiscal year 2017, adding approximately 35 home improvement and hardware stores.
“A solid macroeconomic backdrop, combined with our project expertise, drove above average performance in indoor projects,” CEO Robert Niblock said in a statement. “We also continued to advance our sales to Pro customers, delivering another quarter of comparable sales growth well above the company average.”
Earlier this year, North Carolina-based Lowe’s delivered what was considered a rosy outlook for fiscal year 2017, after posting a whopping 5.1 percent increase in same-store sales for the fourth quarter as the chain capitalized on a stronger U.S. housing market.
Home improvement rival Home Depot reported impressive first-quarter results last week, reaffirming it expects its revenue and comparable sales to climb 4.6 percent for the full year, topping Lowe’s forecast.
With rising home prices leading Americans to invest more in their properties, the home improvement sector has been a rare outperformer in retail of late.
While Lowe’s same-store sales didn’t increase as much as analysts were expecting for the quarter, growth of 1.9 percent is still seen as healthier than the comparable nubers many other retailers have been reporting.
“They’re in a bit of a hole here,” Brian Nagel, an equity analyst for Oppenheimer, told CNBC during an interview Wednesday. “I think Home Depot is the better performing company. We saw another indication of that today.”
As of Tuesday’s close, Lowe’s stock has climbed about 16 percent for the year-to-date period and is up 3.4 percent over the past 12 months.
Source: FactSet