Lowe's earnings beat expectations, sales grow over 10% against the trend

　　Despite the sluggish real estate market, Lowe's reported quarterly revenue and profits that exceeded Wall Street expectations on Wednesday, with quarterly sales increasing by more than 10% year-over-year.

　　The home improvement retailer expects total sales for the current fiscal year to be between $92 billion and $94 billion, representing a growth of about 7% to 9% compared to last year. Full-year adjusted earnings per share are expected to be between $12.25 and $12.75. Same-store sales, excluding one-time factors, are expected to be flat or grow by up to 2%.

　　CEO Marvin Ellison stated in a press release that although high mortgage rates and slowing real estate sales present challenges for the industry, the company's strategy continues to attract both DIY customers and professional home improvement contractors. "While the overall housing market remains under pressure, we are focused on controllable factors, including ongoing efficiency initiatives. We firmly believe we can continue to maintain market share regardless of the macro environment."

　　According to data from the London Stock Exchange Group, Lowe's pre-market share price fell due to its full-year earnings per share forecast of $12.25 to $12.75, which was below analysts' consensus expectation of $12.95.

　　Below is a comparison of Lowe's fourth quarter results as of January 31 with Wall Street expectations:

　　Adjusted earnings per share: Actual $1.98 vs. Expected $1.94

　　Revenue: Actual $20.58 billion vs. Expected $20.34 billion

　　Net profit for the quarter fell from $1.13 billion ($1.99 per share) in the same period last year to $999 million ($1.78 per share). Revenue increased year-over-year from $18.55 billion.

　　Same-store sales grew 1.3%, far exceeding StreetAccount's forecast of 0.2%. The company said the growth was driven by expansion of the professional customer base, online sales, home improvement services, and robust holiday season performance.

　　Competitor Home Depot also beat expectations on Tuesday, but maintained a conservative full-year outlook, reflecting that high borrowing costs, high home prices, and economic concerns are still suppressing US home improvement demand.

　　Like Home Depot, Lowe's is also feeling industry headwinds. Both companies have expanded their contractor and professional customer businesses through acquisitions—which are typically more stable sources of revenue. Last year, Lowe's acquired Foundation Building Materials, a building materials distributor serving large residential and commercial clients, for about $8.8 billion, and Artisan Design Group, which provides design and installation services for builders and property owners, for about $1.33 billion.

　　For consumers delaying home purchases, Lowe's has launched a third-party e-commerce platform to enrich product categories, leveraged influencers to boost social media exposure, and relaunched children's programs to attract young families.

　　As of Tuesday's close, Lowe's stock had risen nearly 16% year-to-date, far outperforming the S&P 500's approximately 1% gain over the same period; over the past year, the stock is up about 15%, roughly in line with the S&P 500's 16% increase.

Editor: Zhang Jun SF065