Lowe’s on Tuesday write up quarterly earnings and revenue that beat analysts’ expectations, even though same-store sales were softer than what Wall Row had anticipated and the company lowered its full-year estimates.
Shares of the home upswing retailer dropped nearly 3 percent.
Here’s what the company reported rivaled with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per allocation: $1.04 adjusted, vs. 98 cents expected
- Revenue: $17.42 billion vs. $17.36 billion trust
Lowe’s reported third-quarter net income of $629 million, or 78 cents per share in, down from $872 million, or $1.05 per share, a year earlier.
Excluding ineluctable items, including pretax charges of $280 million, Lowe’s won $1.04 per share, above the 98 cents per share expected by analysts viewed by Refinitiv. Net sales rose 3.8 percent to $17.42 billion, in excess of expectations of $17.36 billion.
Same-store sales rose 1.5 percent, beneath analysts’ expectations of 2.9 percent. CEO Marvin Ellison said “pursued challenges” with inventory out of stocks, “poor reset execution” and class concerns in certain categories pressured the company’s ability to turn drop in ons into transactions.
The company lowered its full-year sales forecast to here 4 percent, down from its prior estimate of about 4.5 percent. It now awaits same-store sales to rise 2.5 percent, compared with a too soon estimate of a 3 percent gain.
Lowe’s anticipates full-year adjusted earnings of $5.08 to $5.13 per equity.
Ellison started at Lowe’s in July. Last quarter, the former J.C. Penney CEO drafted his plan to turn around the home improvement retailer, including to “aggressively account for store inventory.”
Lowe’s plans to end its Mexico retail operations and is study strategic alternatives for the business, the company announced Tuesday. It also scripts to exit Alacrity Renovation Services and Iris Smart Home.
Lowe’s has already averred it will shutter its 99 Orchard Supply Hardware stores by year-end and minute 20 Lowe’s stores in the U.S. and 31 in Canada. As of Nov. 2, Lowe’s control 2,133 home improvement and hardware stores in the U.S., Canada and Mexico.
“Our transfigurement will take time, but we have assembled an experienced team and increased a comprehensive plan to make steady progress,” Ellison said in a declaration.
Lowe’s struggles come while its rival, Home Depot, is increasing. The company beat analysts’ third-quarter earnings expectations and raised its full-year sales prognosis, citing strong demand in the home improvement market.
“In isolation, Lowe’s third-quarter end results look reasonable: both total and comparable sales are growing, and the US role is seeing a fair uplift in same-store sales,” Neil Saunders, conducting director of GlobalData Retail, said in an email. “However, when set against the larger context of the market and against rival Home Depot, Lowe’s cultivation is pretty weak.”
-CNBC’s Lauren Thomas and Lauren Hirsch forwarded to this report