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 | Good pictures
Lovin It reported fiscal fourth-quarter sales that fell short of Wall Street’s expectations on Wednesday, while also issuing a conservative outlook for the current year.
Here’s how the retailer did compared to Wall Street’s expectations, based on Refinitiv’s survey of analysts:
- Earnings per share: $2.28 adjusted, vs. $2.21 expected
- Revenue: $22.45 billion versus $22.69 billion expected
The company had net income of $957 million for the three months ended Feb. 3, 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 had sales of $1.4 billion in the additional week in the fiscal fourth quarter. Without that extra week, sales would have been slightly lower than last year.
Same-store sales fell 1.5% and 0.7% in the US
In fiscal 2023, Lowe’s said it expects total sales to be between $88 billion and $90 billion, compared with Wall Street’s estimate of $90.48 billion. The company also expects same-store sales to decline 2% or be 2% lower compared to the previous fiscal year.
The company expects earnings per share to be in the range of $13.60 to $14.00 for the year, versus the $13.79 forecast by analysts.
At 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 in the second half of 2022, Wall Street’s expectations fell compared to previous quarters.
Amid the Covid pandemic, the home improvement market grew as consumers stuck at home undertook costly renovations and improved their living spaces. The market is under a lot of pressure these days. Shoppers feeling pinched by high inflation are spending their discretionary dollars on travel and entertainment, as opposed to items like patio furniture and paint.
Last week, Contender Home Depot It issued a muted outlook, missing Wall Street’s earnings expectations for the first time since November 2019. The company expects flat consumer spending and more pressure on the sector in the coming quarters as the pandemic-fueled recession eases.
However, a persistent shortfall in the country’s housing supply and an aging housing stock have long benefited the home improvement sector, which could benefit retailers. With interest rates rising in a stagnant housing market, many people with low interest rates may choose to stay in their homes and make renovations instead of moving somewhere new.
Read the full earnings release Here.
