MOORESVILLE, N.C. (AP) — Lowe’s easily beat Wall Street expectations for the fourth quarter, buoyed by consumers tackling home projects. The chain also provided a fiscal 2017 earnings forecast that also topped most projections.
Shares jumped more than 7 percent before the market opened Wednesday.
Home improvement retailers like Lowe’s and Home Depot Inc. are taking advantage of a continued housing recovery. On Tuesday it was reported that there was a 5.6 percent rise in the Standard & Poor’s CoreLogic Case-Shiller 20-city home price index, the most since January 2016. With a limited supply of available properties, bidding wars are breaking out among prospective buyers. Steady job gains and growing consumer confidence have encouraged more people to take the plunge and look for a home.
At the same time, mortgage rates are climbing and home prices are increasing, so some existing home owners are staying put and spending their money on home improvement projects.
For the three months ended Feb. 3, Lowe’s earned $663 million, or 74 cents per share. A year earlier the Mooresville, North Carolina-based company earned $11 million, or a penny per share.
Earnings, adjusted for one-time costs and severance costs, came to 86 cents per share. That easily beat the 79 cents per share that analysts surveyed by Zacks Investment Research were looking for.
Revenue totaled $15.78 billion, topping the $15.28 billion in revenue that analysts polled by Zacks expected.
Sales at stores open at least a year, a key measure of a retailer’s health, climbed 5.1 percent.
Chairman, President and CEO Robert Niblock said in a written statement that the company is positioned well to capitalize on favorable economic conditions for home improvement.
“We achieved strong fourth quarter results, delivering comparable sales growth and adjusted earnings per share above our expectations,” commented Niblock. “We leveraged our omni-channel platform, customer experience design capabilities, and project expertise to drive strong holiday performance and capitalize on broad-based project demand throughout the quarter. Our success is a testament to our employees and I’d like to thank them for their dedication and purposeful commitment to serving the evolving needs of customers.
“We’ve entered 2017 well-positioned to capitalize on a favorable macroeconomic backdrop for home improvement by continuing to execute on our strategies to expand customer reach and develop capabilities to anticipate and support their needs. We remain committed to making productivity a core strength and investing in future capabilities that will add the most value for customers. We have the vision, the drive, the plan, and the leadership team to deliver long-term value for customer and shareholders,” Niblock added.
Lowe’s Cos. anticipates fiscal 2017 earnings of about $4.64 per share, with total sales up about 5 percent and same-store sales up approximately 3.5 percent. Analysts surveyed by FactSet predict earnings of $4.53 per share.
View the full financial report on the Lowe’s website here.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
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