logo-loader
viewLowe's Companies, Inc.

Lowe’s heads lower on disappointing second quarter earnings and sales

Despite the vibrant US housing market, Lowe’s earnings and sales fell short of Wall Street expectations

lowe's store front
Lowe’s didn’t catch the same tailwind as Home Depot did in the second quarter

Lowe’s Companies Inc (NYSE:LOW) headed lower in pre-market trade after the DIY retailer’s second quarter performance disappointed.

Despite the vibrant US housing market, which recently helped fellow home improvement giant Home Depot Inc (NYSE:HD) to a record second quarter, Lowe’s earnings and sales fell short of Wall Street expectations.

Full-year guidance lowered

The North Carolina-headquarter company also lowered its full-year profit guidance as it expects additional investment in marketing and customer service to pressurize margins.

For the three months August 4, Lowe’s reported earnings of US$1.57 a share (Q2 2016: US$1.37), below the US$1.61 analysts had been looking for.

Revenue came in at US$19.5bn, ahead of the US$18.3bn it generated last year but slightly behind analyst forecasts of US$19.53bn.

There was a small beat on the same-store sales front though, which climbed 4.5% year-on-year, slightly better than the 4.3% estimates.

That’s not a bad area to beat expectations in, as it removes the volatility of stores recently openly or closed.

In terms of full-year earnings, Lowe’s is now guiding for between US$4.20 and US$4.30 a share, below the US$4.62 analysts had been expecting.

Sales are still expected to rise by roughly 5% year-on-year, with sales at its established stores rising 3.5%.

Boss concedes results were below par

“While our results were below our expectations in the first half of this year, the team remains focused on making the necessary investments to improve the customer experience and drive sales,” said chairman, president and chief executive Robert Niblock.

“This includes amplifying our consumer messaging and incremental customer-facing hours in our stores which will put pressure on our operating margin.

“We believe this is the right strategy to more fully capitalize on strong traffic trends in what we believe is a supportive macroeconomic backdrop for home improvement.”

The stock was down 4.9% to US$75.82 in pre-market trade on Wednesday.

Quick facts: Lowe's Companies, Inc.

Price: 154.78 USD

NYSE:LOW
Market: NYSE
Market Cap: $116.9 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

HANetf's Bitcoin ETC rapidly becomes most traded product on XETRA

ETC Group's Bradley Duke speaks with Proactive London’s Katie Pilbeam about the launch of its BTCetc Bitcoin Exchange Traded Crypto (BTCE) which was brought to market thanks to partner HANetf and has reached $50 million in AUM in less than two months from its launch. In July the BTCE was...

1 hour, 36 minutes ago

2 min read