A Lowe employee goes through the store during the grand opening of Lowe's store in San Francisco, California.
Lowe's reported quarterly revenue Wednesday that beat analysts' expectations and raised the forecast for the year. However, sales fell below expectations during the quarter.
Lowe's shares increased by about 5% in premarket trading.
This is what Lowe reported compared to what Wall Street expected, based on a survey of Refinitive Analysts:
- Earnings per share: $ 1[ads1].41, adjusted, against $ 1.35 expected
- Revenue: $ $ 17.39 vs. $ 17.68 Expected
- Same Store Sales: 2.2% vs. 3.1% Expected
Lowe now expects to make between $ 5.63 and $ 5.70 per share, on an adjusted basis, compared to a previous estimate of $ 5.67 per share.
In the third quarter ended November 1, Lowe's net income grew to $ 1.05 billion, or $ 1.41 per adjusted share, from $ 629 million, or $ 78 per share, the year before. Analysts had expected the company to earn $ 1.35 per share, according to a survey by Refinitive.
Sales increased $ 17.39 billion, only hidden by analysts' estimates of $ 17.68 billion.
Consolidated sales in the same store grew by 2.2%. Analysts expected a gain of 3.1%. Sales in US stores that have opened at least 12 months increased by 3.0%.
Since Lowe's CEO Marvin Ellison arrived in July 2018, he has focused on professional entrepreneurs or professional clients. In the second quarter, Lowe & # 39; s ability to increase US sales of the same store at a faster pace than competitor Home Depot approved for this effort. Lowe's said it added 35,000 new professional customers last quarter.
However, Home Depot has always had its stronghold in the professional space. About 45% of Home Depot's business comes from professional clients, according to Jonathan Matuszewski, an analyst at Jefferies. In comparison, Lowe's gets about 20% to 25% of sales from this group, he said Tuesday.
Home Depot reported weaker-than-expected sales in the third quarter, cutting sales forecast for 2019 because recent investments take longer than expected to pay off.
The Atlanta-based company said Tuesday it is improving its B2B site, which was mostly created for the company's professional customers. The site still requires underlying technical work before the company can move on with additional elements.
Lowe dropped 1.4% Tuesday on the back of Home Depot's quarterly report. Shares in Lowe increased more than 22% from the previous year on the market Tuesday. The stock has a market capitalization of $ 87.5 billion.
Meanwhile, Home Depot shares plunged 5.4% on Tuesday, leaving the market capitalization at $ 247.4 billion. So far this year, the shares have risen 32%.
This story is evolving. Please check for updates.