Lowe’s beats Wall Street expectations as it starts to break out of sales slump

Lowe’s topped Wall Street’s quarterly earnings and revenue expectations on Wednesday and said its sales could see modest growth in the year ahead.

The company said it expects full-year total sales sales to range from $83.5 billion to $84.5 billion, which on the upper end would be higher than its total revenue of $83.67 billion for fiscal 2024. It said it expects comparable sales to be flat to up 1% year over year and earnings per share to range from approximately $12.15 to $12.40.

Here’s what the company reported for the fiscal fourth quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: $1.93 adjusted vs. $1.84 expected
• Revenue: $18.55 billion vs. $18.29 billion expected

In the three-month period that ended Jan. 31, Lowe’s net income was $1.13 billion, or $1.99 per share, compared with $1.02 billion, or $1.77 per share, in the year-ago period. Revenue fell from $18.60 billion in the year-ago quarter.

Lowe’s adjusted earnings per share figure excluded a $80 million pre-tax gain associated with the 2022 sale of its Canadian retail business, which added 6 cents per share to fourth-quarter earnings.

Investors are looking for signs that the home improvement market will pick up again. Slower housing turnover and higher borrowing costs have kept some customers on the sidelines. Lowe’s net sales for the 2024 fiscal year totaled $83.67 billion, down 3% from the fiscal year prior.

Shares of Lowe’s rose more than 2% in early trading, after the company’s outlook pointed to potential for improving trends in the year ahead.

Comparable sales for the quarter rose 0.2%, boosted by online gains, high single-digit growth among home professionals and sales related to rebuilding efforts after Hurricanes Milton and Helene. That slightly positive metric ended eight consecutive quarters of comparable sales declines. It also exceeded Wall Street’s expectations. Analysts had anticipated a 1.8% decline in comparable sales.

Yet in a news release, Lowe’s said those gains were partially offset by pressure on discretionary do-it-yourself projects.

Lowe’s competitor Home Depot narrowly beat Wall Street’s fourth-quarter estimates on Tuesday and also snapped an eight consecutive quarter losing streak with comparable sales. Yet Home Depot CFO Richard McPhail said the company doesn’t expect the housing market or mortgage rates to change. Instead, he told CNBC that he thinks consumers will gradually get used to elevated rates as “a new normal.”

Shares of Lowe’s closed on Tuesday at $242.39. As of Tuesday’s close, shares of the company have fallen nearly 2% this year. That trails behind the approximately 2% gains of the S&P 500 during the same period.

This is breaking news. Please check back for updates.