A Lowe’s Home Improvement Warehouse worker assembles carts in a parking lot on August 17, 2022 in Houston, Texas.
Brandon Bell | Getty Images News | Getty Images
Lowe’s on Wednesday reported fourth-quarter financial sales that fell short of Wall Street expectations, while giving a conservative outlook for the current year.
Here’s how the retailer did compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.28 adjusted, vs. $2.21 expected
- Revenue: $22.45 billion vs. $22.69 billion expected
The company’s reported net income for the three-month period ended Feb. 3 was $957 million, compared with $1.21 billion, or $1.78 per share, a year earlier.
Sales rose to $22.45 billion from $21.34 billion a year earlier. However, Lowe’s fiscal fourth quarter included an extra week that brought in $1.4 billion in sales. Without the extra week, sales would have fallen slightly from the previous year.
Total same-store sales fell 1.5%, with a 0.7% decline in the US
For fiscal 2023, Lowe’s said it expects total sales to be between $88 billion and $90 billion, compared with Wall Street expectations of $90.48 billion. The company also expects same-store sales to be flat or down 2% compared to the previous financial year.
The company expects earnings per share for the year to be $13.60 to $14.00, compared to the $13.79 estimated by analysts.
Lowe’s, which has been working to expand its Pro market, saw 10% growth in category sales in the US and a 5% jump in online sales.
This time last year, Lowe’s was benefiting from a red-hot housing market that had many people repairing and renovating their homes. As the market gradually cooled towards the second half of 2022, Wall Street expectations fell compared to previous quarters.
In the midst of the Covid pandemic, the home improvement market grew as homebound consumers undertook expensive renovations and spruced up their living spaces. The market is under more pressure these days. Shoppers feeling squeezed by high inflation have been spending their discretionary dollars on travel and entertainment as opposed to items like patio furniture and paint.
Last week, rival Home Depot missed Wall Street’s earnings expectations for the first time since November 2019 and gave them a subdued outlook. The company expects flat consumer spending and more pressure on the sector in the quarters ahead as the pandemic-driven boon wears off.
A persistent shortage of the country’s housing supply and an aging housing stock, which the home improvement sector has long benefited from, will however be able to benefit the dealers. With interest rates skyrocketing in a stagnant housing market, many people with low interest rates may choose to stay in their home and undergo renovations instead of moving somewhere new.
Read the full results report here.