A customer pushes a cart toward the entrance of a Lowe’s store in Concord, Calif., Tuesday, Feb. 23, 2021.
David Paul Morris | Bloomberg | Getty Images
Lowe’s Wednesday reported second-quarter results that beat analysts’ expectations, as the company said improved operations offset lower-than-expected sales that were hurt by a shortened spring.
The home improvement retailer said sales to DIY customers were also hurt by lower demand for some discretionary items. This was partially offset by increased sales to professionals such as contractors and electricians.
Comparable sales fell 0.3% overall, although U.S. home improvement saw a slight 0.2% growth from the same quarter last year.
“I am delighted that our team improved operating margin and effectively managed inventory despite sales below expectations – a clear reflection of our relentless focus on operational discipline and productivity,” said Lowe’s CEO, Marvin R. Ellison, in a statement.
Here’s what the company reported compared to what Wall Street expected, based on a Refinitiv analyst survey:
- Earnings per share: $4.67 cents, adjusted, vs. $4.58 expected
- Revenue: $27.48 billion vs. $28.12 billion expected
Lowe’s said it now expects total and comparable sales for the year to be towards the lower end of its outlook range. He had forecast sales of $97 billion to $99 billion and comparable sales down 1% to 1%. Operating income and earnings are expected to be at the upper end of its previous guidance.
Shares of the company rose about 3% in premarket trading.
For the three months ended July 29, Lowe’s reported net income of $2.99 billion, up from $3.02 billion a year ago. Net sales fell to $27.48 billion from $27.57 billion a year ago.
The results come after Home Depot on Tuesday rpublished earnings above expectations and revenue for the second quarter, and maintained its guidance. Many people have taken on home improvement projects as they hunkered down during the pandemic, and investors have been watching to see if that spending holds up
Lowe’s has a different customer base than Home Depot, which tends to get more of its sales from home professionals. Lowe relies more on DIY customers, which makes it more vulnerable to fluctuations in demand.
“Our first-half results were disproportionately impacted by our 75% DIY customer mix, which was partially offset by our double-digit Pro growth for the ninth consecutive quarter,” Ellison said in a statement.
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