Lowe’s Companies Inc. (NYSE: LOW) reported better than expected profit and sales for its fiscal first quarter on Wednesday, as the ongoing pandemic sustained demand for home-improvement projects.
Financial performance
Lowe’s reported $2.32 billion (£1.64 billion) of net earnings in the first quarter that translates to $3.21 per share. In the comparable quarter of last year, its near earnings were capped at $1.34 billion or $1.76 per share.
Lowe’s generated $24.42 billion of sales in Q1 that represents a 24% year over year growth. According to FactSet, experts had forecast the company to post $23.81 billion of sales and $2.56 of earnings per share in the recent quarter.
Comparable sales
Comparable sales, Lowe’s added, jumped 25.9% versus 20.3% expected. U.S. home-improvement comparable sales climbed by 24.4% in the first quarter. Lowe’s professional segment noted an over 30% growth in Q1, while each of its U.S. regional divisions saw a more than 18% growth.
In separate news on Wednesday, China’s JD.com said its revenue climbed by 39% in the recent quarter.
Other notable figures
Each of the retail firm’s U.S. regional divisions saw an over 18% growth in Q1. Its professional segment noted an over 30% growth. For hourly workers, Lowe’s valued its profit-sharing bonus at $152 million in the recent quarter.
The Mooresville-based company said it repurchased $3.1 billion worth of shares (16.8 million) in the first quarter and made $440 million of dividend payments. Lowe’s quarterly update comes a day after rival Home Depot published its earnings report for Q1.
Future outlook
Lowe’s had previously forecast $86 billion of sales this year. On Wednesday, the NYSE-listed firm expressed confidence that it will beat its earlier guidance for sales in 2021. For the full year, Lowe’s is targeting a 12% operating margin and a further increase in its market share. The retail company intends to spend $2 billion this year and repurchase $9 billion worth of shares.
Impact on the share price
Despite market-beating results, Lowe’s shares were reported about 2.5% down in premarket trading on Wednesday on fears that the housing market might lose pace due to labour shortage. Investors were also focused on a decline in the retail firm’s performance from an exceptionally high growth it reported at the height of the COVID-19 crisis.
Lowe’s is still up more than 15% on a year-to-date basis. At the time of writing, it is valued at $138.24 billion and has a price to earnings ratio of 24.88.
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Wajeeh Khan
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