Lowe's Earnings Miss Expectations -- Update
August 17 2016 - 7:44AM
Dow Jones News
By Anne Steele
Lowe's Cos. posted earnings sharply below expectations in the
latest quarter as the home-improvement retailer reported
disappointing comparable sales growth.
Shares in the company, which have risen 7.2% so far this year,
dropped 4.9% to $77.50 in premarket trading Wednesday morning.
Lowe's also lowered its guidance for the year to reflect the
impact of its acquisition of Canadian home-improvement chain Rona
Inc.
For 2016, the company now expects earnings of about $4.06 a
share, down from previous guidance for $4.11 a share. Lowe's backed
its guidance for comparable-store sales to rise 4%. Total sales are
expected climb 10%, above analyst estimates for 8% growth.
Wednesday's report from Lowe's follows strong results from
larger rival Home Depot Inc. on Tuesday. Though the retail sector
has struggled with dwindling foot traffic and sales lost to online
retailers like Amazon Inc., the home-improvement retailers have
benefited from an improving housing market. While shoppers have cut
spending on things like apparel, they have been willing to shell
out for refurbishing their dwellings amid favorable housing
trends.
Chief Executive Robert Niblock said results were "in line with
our expectations," and the company is "well positioned to
capitalize on a favorable macroeconomic backdrop for home
improvement in the second half of this year."
During the quarter, sales at stores open at least a year grew
2%. U.S. same-store sales rose 1.9%.
In all for the July quarter, Lowe's posted a profit of $1.17
billion, or $1.31 a share, up from $1.13 billion, or $1.20, a year
earlier. The quarter's results were dented by $84 million, or six
cents a share, due to a loss on a foreign-currency hedge entered
into in advance of the company's Rona acquisition.
Revenue climbed 5.3% to $18.26 billion. Analysts polled by
Thomson Reuters had projected $1.42 a share in adjusted earnings on
$18.45 billion in revenue.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
August 17, 2016 07:29 ET (11:29 GMT)
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