Lowe’s (LOW) earnings Q1 2022

A customer pushes a shopping cart toward the entrance of a Lowe’s store in Concord, Calif., Tuesday, Feb. 23, 2021.

David Paul Morris | Bloomberg | Getty Images

On Wednesday, Lowe’s missed Wall Street’s first-quarter sales expectations as cooler spring weather hurt demand for supplies for outdoor DIY projects.

The shares were down more than 2% in premarket trading.

The company reiterated its full-year outlook, saying it expects total sales to be between $97 billion and $99 billion and comparable store sales to range between a 1% decline and a 1% increase.

Here’s what the company reported for the quarter ended April 29 compared to what Wall Street expected, based on a Refinitiv analyst survey:

  • Earnings per share: $3.51 vs. $3.22 expected
  • Revenue: $23.66 billion vs. $23.76 billion expected

Lowe’s results diverge from those of its competitor Home Depot. Home Depot beat Wall Street expectations for quarterly earnings and revenue on Tuesday, attributing its growth to home appreciation and a boom in projects for home professionals.

Lowe’s, however, has a different mix of its business. It has historically gotten about 75% to 80% of its total sales from DIY customers compared to Home Depot, which gets about half of its sales there. This makes Lowe’s more vulnerable to changes in demand, should homeowners decide to skip a painting or landscaping project.

“Our sales this quarter were in line with our expectations, excluding our outdoor seasonal categories which were impacted by abnormally cold temperatures in April,” CEO Marvin Ellison said in Wednesday morning’s earnings release. “Now that spring has finally arrived, we are pleased with the improving sales trends we are seeing in May.”

Lowe’s net profit for the quarter increased slightly to $2.33 billion, or $3.51 per share, from $2.32 billion, or $3.21 per share, a year earlier. The results were above the $3.22 expected by analysts polled by Refinitiv.

Net sales fell to $23.66 billion from $24.42 billion last year and beat analysts’ expectations of $23.76 billion.

Same-store sales were down 4% year-over-year, a bigger drop than the 2.5% decline analysts expected, according to StreetAccount.

As of Tuesday’s close, Lowe’s shares are down about 25% so far this year. Shares closed Tuesday at $194.03, bringing the company’s market value to $128.27 billion.

This story is developing. Please check for updates.

Leave a Comment

Your email address will not be published.