A customer pushes a shopping cart toward the entrance of a Lowe’s store in Concord, Calif., Tuesday, Feb. 23, 2021.
David Paul Morris | Bloomberg | Getty Images
Lowe’s on Wednesday reported second-quarter earnings that beat analysts’ expectations as the company said improved operations offset lower-than-expected sales hurt by a shortened spring.
The home improvement retailer said sales to do-it-yourself customers were also hurt by lower demand for certain discretionary items. This was partially offset by an increase in sales to professionals such as contractors and electricians.
Comparable sales fell 0.3% overall, although US home improvement saw slight growth of 0.2% compared to the same quarter last year.
“I am pleased that our team drove operating margin improvement and effectively managed inventory despite lower-than-expected sales – a clear reflection of our relentless focus on operational discipline and productivity,”[ads1]; Lowe’s CEO Marvin R. Ellison said in a release.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- 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 toward the bottom of its outlook range. It had forecast sales of $97 billion to $99 billion and comparable sales down 1% to 1%. Operating income and earnings are expected to be towards the top of the previous forecast.
Shares in the company rose around 3% in pre-market trading.
For the three-month period ended July 29, Lowe’s reported net income of $2.99 billion, down from $3.02 billion last year. Net sales fell to $27.48 billion, from $27.57 billion a year ago.
The results come after Home Depot on Tuesday reported better-than-expected earnings and sales for the second quarter, sticking to its forecast. Many people took up home improvement projects as they hunkered down during the pandemic, and investors have been watching to see if that spending measures up
Lowe’s has a different customer mix than Home Depot, which tends to get more of its sales from home professionals. Lowe’s relies more on do-it-yourself customers, making it more vulnerable to changes 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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