Lowe's Companies (LOW) -) posted stronger-than-expected second quarter earnings Tuesday, and repeated it full year profit forecast, adding it remains confident in the prospects for the home improvement industry.
Lowe's said adjusted earnings for the three months ending in July were pegged at $4.56 per share, a 2.4% decrease from the same period last year but 6 cents ahead of the Street consensus forecast of $4.49 per share.
Group revenues, Lowe's said, slipped 9.25% to $24.96 billion, narrowly missing analysts' estimates of a $25 billion tally. U.S. same-store sales fell 1.6%, compared to the Refinitiv forecast of a 2.4% decline.
Group profit margins, however, improved by 40 basis points from last year, to 33.7%.
Looking into the back half of Lowe's financial year, which ends in January, Lowe's reiterated that said it sees revenues in the region of $97 billion and $98 billion, with same-store sales falling between 2% and 4% from prior year levels. Earnings are expected to come in between $13.20 to $13.60 per share.
"Our investments in our Total Home strategy continued to drive growth across Pro and online this quarter. And we are excited by our recent launch of same-day delivery nationwide and the expansion of our rural merchandising framework to roughly 300 stores," said CEO Marvin Ellison.
"Our ability to reduce expenses while improving customer service is the result of excellent execution by our team, and we remain confident in the mid- to long-term outlook for the home improvement industry," he added. "In recognition of the contributions of our front-line associates, we are awarding over $100 million in discretionary and profit-sharing bonuses to them this quarter. I would like to thank our front-line team for serving our customers and supporting our communities."
Lowe's shares were marked 3.6% higher in the late Tuesday trading following the earnings release to change hands at $225.43 each.
Last week, Lowe's larger rival, Home Depot (HD) -) reiterating its full-year profit forecast and noted it sees continued pressure on big ticket sales.
Home Depot said same-store sales were down 2% from a year earlier over the three months ending in July, ahead of Wall Street forecasts, while comparable sales in the U.S. were down 2%. Average tickets rose 0.05% per trip to $90.07, while the number of individual transactions slowed by around 1.8%.
Looking into the 2023 fiscal year, which ends next January, Home Depot reiterated its overall earnings forecast to a decline of between 7% and 13% with comparable sales down between 2% and 5%.
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