Lowe’s Reports Fiscal Q2 Results, Maintains Full-Year Forecast

One sentence summary – Lowe’s reported fiscal second quarter earnings that exceeded estimates but fell slightly short on sales, maintaining its full-year forecast and projecting a decline in comparable sales; CEO Marvin Ellison remains optimistic about the long-term outlook for home improvement, citing factors such as the older age demographic and limited housing availability in the U.S., while acknowledging short-term challenges such as reduced demand due to the diminishing impact of the Covid pandemic, rising interest rates, and elevated prices of everyday items.

At a glance

  • Lowe’s released its fiscal second quarter results, with earnings exceeding estimates but sales falling slightly short.
  • The company maintained its full-year forecast, anticipating total sales between $87 billion and $89 billion.
  • A projected decline in comparable sales of 2% to 4% is expected.
  • CEO Marvin Ellison remains optimistic about the long-term outlook for home improvement, citing factors such as the older age demographic and limited housing availability in the U.S.
  • Lowe’s, along with its rival Home Depot, is facing reduced demand as the high demand triggered by the Covid pandemic diminishes, but they are benefiting from a strong job market and a housing shortage in the U.S.

The details

Lowe’s, the home improvement retailer, recently released its fiscal second quarter results.

The earnings exceeded estimates, but sales fell slightly short.

The company maintained its full-year forecast, anticipating total sales between $87 billion and $89 billion.

A projected decline in comparable sales of 2% to 4% is expected.

CEO Marvin Ellison remains optimistic about the long-term outlook for home improvement.

Ellison cites factors such as the older age demographic and limited housing availability in the U.S. as reasons for optimism.

However, he acknowledged the existence of challenges in the short term.

For the quarter, Lowe’s reported a net income of $2.67 billion, or $4.56 per share.

This is compared to $2.99 billion, or $4.68 per share, during the same period last year.

Net sales declined from $27.48 billion in the previous year.

Lowe’s, along with its rival Home Depot, is facing reduced demand as the high demand triggered by the Covid pandemic diminishes.

Consumer sentiment is being impacted by rising interest rates and elevated prices of everyday items.

However, the companies are benefiting from a strong job market and a housing shortage in the U.S.

Mortgage rates have reached their highest level in over two decades.

This has made homebuying unaffordable for some and discouraged current homeowners from moving.

Despite higher mortgage rates, home prices have continued to rise.

This has led to increased investment in home renovations and projects.

However, shakier consumer confidence has affected discretionary sales, resulting in softer sales.

In the second quarter, comparable sales decreased by 1.6%.

This was better than the expected 2.6% decline.

Lowe’s experienced growth in sales due to spring projects, online sales, and momentum with home professionals.

The company has been actively focusing on attracting more home professionals.

Home professionals currently account for about a quarter of sales, compared to half at Home Depot.

Home professionals have reported a healthy amount of projects in the pipeline.

This has driven purchases of paint, plumbing tools, and other related items.

Falling prices, including those of lumber and appliances, have contributed to lower sales after a period of higher costs and out-of-stock items.

Appliance brands have returned to pre-pandemic levels of promotions.

These promotions are factored into the company’s guidance for the second half of the year.

By providing these comprehensive details, it is clear that Lowe’s is navigating the challenges of a changing market while capitalizing on opportunities within the home improvement industry.

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cnbc.com
– Lowe’s reported mixed results for its fiscal second quarter, with earnings beating estimates but sales falling slightly short.
The company maintained its full-year forecast, projecting total sales between $87 billion and $89 billion and a drop in comparable sales of 2% to 4%.
– CEO Marvin Ellison expressed optimism about the long-term outlook for home improvement due to older age and low availability of housing in the U.S., but acknowledged challenges in the short term.
– Lowe’s net income for the quarter was $2.67 billion, or $4.56 per share, compared to $2.99 billion, or $4.68 per share, in the same period last year.
– Net sales declined from $27.48 billion in the previous year.
– Lowe’s and rival Home Depot are both facing slowing demand as the high demand driven by the Covid pandemic diminishes.
– Rising interest rates and elevated prices of everyday items are impacting consumer sentiment, but a strong jobs market and housing shortage in the U.S. are benefiting the companies.
– Mortgage rates have reached their highest level in over two decades, making homebuying unaffordable for some and discouraging current homeowners from moving.
Despite higher mortgage rates, home prices have continued to rise, leading to increased investment in home renovations and projects.
However, shakier consumer confidence is resulting in softer discretionary sales.
– Comparable sales in the second quarter decreased 1.6%, better than the expected 2.6% decline.
– Lowe’s saw growth from spring projects, online sales, and momentum with home professionals.
The company has been focusing on attracting more home professionals, who account for about a quarter of sales compared to half at Home Depot.
– Home professionals have reported a healthy amount of projects in the pipeline, driving purchases of paint, plumbing tools, and more.
– Falling prices, including lumber and appliance prices, have contributed to lower sales after a period of higher costs and out-of-stock items.
– Appliance brands have returned to pre-pandemic levels of promotions, which are factored into the company’s guidance for the second half of the year.

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