A worker at Lowe’s Home Improvement Warehouse collects carts in a parking lot on August 17, 2022 in Houston, Texas.
Brandon Bell | News from Getty Images | Getty Images
lowes on Wednesday reported fiscal fourth-quarter sales that fell short of Wall Street expectations while providing a conservative outlook for the current year.
Here’s how the retailer fared compared to Wall Street expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: Adjusted $2.28 vs. $2.21 expected
- Revenue: $22.45 billion versus $22.69 billion expected
The company’s reported net income for the three-month period ended February 3 was $957 million, compared to $1.21 billion, or $1.78 per share, a year earlier.
Revenue increased to $22.45 billion from $21.34 billion last year. However, Lowe’s fiscal fourth quarter included an extra week of $1.4 billion in revenue. Without this additional week, sales would have fallen slightly compared to the same period last year.
Total same-store sales fell 1.5%, with a 0.7% decline in the US
For fiscal 2023, Lowe’s expects total revenue to be between $88 billion and $90 billion, compared to Wall Street’s expectations of $90.48 billion. The company also expects same-store sales to be flat or down 2% compared to the prior fiscal year.
The company expects earnings per share of between $13.60 and $14.00 for the year, versus $13.79 that analysts had been forecasting.
Lowe’s, which has been working to grow its Pro market, saw 10% sales growth in the category and a 5% increase in online sales in the US.
Around this time last year, Lowe’s was benefiting from a sizzling housing market that prompted many to repair and renovate their homes. As the market began to cool off in the second half of 2022, Wall Street expectations dropped compared to previous quarters.
Amid the Covid pandemic, the home improvement market grew as consumers stuck at home carried out expensive renovations and beautified their living spaces. The market is currently under greater pressure. Shoppers, feeling hemmed in by high inflation, have spent their discretionary dollars on travel and entertainment, as opposed to commodities like patio furniture and paint.
Last week, rival home depot missed Wall Street revenue expectations for the first time since November 2019 and issued a muted outlook. The company expects flat consumer spending in the coming quarters and more pressure on the sector as the pandemic-related boon wears off.
However, a persistent shortage in the country’s housing supply and an aging housing stock, which has long benefited the home improvement industry, could benefit retailers. With interest rates rising in a sluggish housing market, many people with low interest rates may choose to stay in their homes and do renovations rather than move to a new location.
Read the full results announcement here.
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