A Lowe’s Home Improvement Warehouse worker collects carts in a parking lot on August 17, 2022 in Houston, Texas.
Brandon Bell | Getty Images News | Getty Images
Lowe’s on Wednesday reported fiscal fourth-quarter sales that fell short of Wall Street’s expectations, while also issuing a conservative outlook for the current year.
Here’s how the retailer did compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.28 adjusted, vs. $2.21 expected
- Revenue: $22.45 billion vs. $22.69 billion expected
The company’s reported net income for the three-month period that ended Feb. 3 was $957 million, compared with $1.21 billion, or $1.78 per share, a year earlier.
Sales rose to $22.45 billion from $21.34 billion a year earlier. However, Lowe’s fiscal fourth quarter included an extra week that saw $1.4 billion in sales. Without that additional week, sales would have declined slightly from the year-ago period.
Same-store sales fell 1.5%, and 0.7% in the U.S.
For fiscal 2023, Lowe’s said it expects total sales to be between $88 billion and $90 billion, compared with Wall Street expectations of $90.48 billion. The company also expects same-store sales to be flat or down 2% compared to the prior fiscal year.
The company expects its earnings per share for the year to be $13.60 to $14.00, versus $13.79 projected by analysts.
This time last year, Lowe’s was benefiting from a red-hot housing market that led many to fix up and renovate their homes. As the market gradually cooled towards the second half of 2022, Wall Street’s expectations fell compared to prior quarters.
Amid the Covid pandemic, the home improvement market grew as stuck-at-home consumers undertook pricey renovations and spruced up their living spaces. The market is under more pressure these days. Shoppers feeling pinched from high inflation have been using their discretionary dollars on travel and entertainment as opposed to goods like patio furniture and paint.
Last week, rival Home Depot missed Wall Street’s revenue expectations for the first time since November 2019 and issued a muted outlook. The company anticipates flat consumer spending and more pressure on the sector in the quarters ahead as the pandemic-fueled boon subsides.
However, a persistent shortage in the country’s housing supply and an aging housing stock, which the home improvement sector has long benefited from, could benefit the retailers. With interest rates soaring in a stagnant housing market, many people with low interest rates may choose to stay in their homes and perform renovations rather than move somewhere new.
Read the full earnings release here.
