Lowe's Companies Inc (NYSE:LOW)) delivered a solid quarterly performance and announced a major acquisition aimed at deepening its reach into the professional construction market.
The home improvement giant announced it would acquire California-based Foundation Building Materials for $8.8 billion, adding a distributor that serves around 40,000 professional customers across more than 370 North American locations.
Analysts say the deal marks a new level of urgency in the professional segment distribution arms race, with rival Home Depot also making acquisition plays.
Adjusted earnings per share from Lowe's of $4.33 for the second quarter were up 5.6% year-on-year and ahead of the Wall Street analyst conensus of $4.24.
Total sales rose to $24 billion, with comparable sales improving by 1.1%, driven by strength in both Pro and DIY segments, though this was shy of Street estimates of 1.29%.
Chairman and CEO Marvin Ellison said the quarter showed “solid performance in both Pro and DIY” and noted that front-line associates helped deliver “another increase in customer satisfaction scores.”
The company also reaffirmed confidence in its core outlook, raising full-year sales guidance to between $84.5 billion and $85.5 billion following its recent $1.3 billion acquisition of Artisan Design Group, also in the Pro space.
Shares in Lowe’s were up 3.2% in premarket trading at $264.54.