Lowe’s (LOW) Q3 2021 earnings beat

Lowe’s beat analysts’ expectations for fiscal third-quarter earnings on Wednesday, as the corporate received a bump in enterprise from residence professionals and on-line gross sales.

The house enchancment retailer raised its forecast, saying it anticipates $95 billion in gross sales. It had beforehand predicted income of $92 billion.

The corporate’s shares closed up 0.4% to $245.76. They touched a 52-week excessive of $255.22 earlier within the day.

This is what the corporate reported for the fiscal third quarter ended Oct. 29 in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by Refinitiv:

  • Earnings per share: $2.73 vs. $2.36 anticipated
  • Income: $22.92 billion vs. $22.06 billion anticipated

Lowe’s income rose to $1.90 billion, or $2.73 per share, from $692 million, or 91 cents a share, a yr earlierThe outcomes outmatched the $2.36 per share anticipated by analysts surveyed by Refinitiv.

Internet gross sales climbed to $22.92 billion from $22.31 billion final yr and have been increased than analysts’ expectations of $22.06 billion.

Lowe’s same-store gross sales grew by 2.2% within the three-month interval. That was a pointy distinction from analysts’ prediction of a 1.5% decline, in line with StreetAccount.

Concentrate on residence execs

A robust housing market — and a wave of larger initiatives — has lifted gross sales for Lowe’s and its rival, House Depot. At the same time as costs rise for homes and building supplies, Individuals have continued to purchase. Homebuilder confidence surged this week, because of the massive urge for food for brand new single-family properties.

The retailers additionally noticed prospects store for paint, throw pillows and extra as they spent extra time at residence and tackled do-it-yourself initiatives in the course of the coronavirus pandemic.

As customers get out and about once more, Lowe’s and House Depot are more and more attempting to woo the house professionals that householders rent to sort out renovations or redo their kitchens.

House Depot’s third-quarter earnings mirrored that shift, as buyer transactions dropped however common tickets rose by 12.9% to $82.38. The retailer stated momentum has continued into the fourth quarter, with gross sales beginning barely increased than third-quarter ranges.

Underneath CEO Marvin Ellison, Lowe’s has stepped up efforts to draw execs, since they’re steadier and greater spenders. It has a loyalty program for execs and added perks like parking for bigger autos, free telephone charging stations and air stations for refilling tires.

Gross sales development amongst execs outpaced the speed for do-it-yourself gross sales within the third quarter — a mirrored image of pandemic tendencies reversing. Comparable gross sales to execs rose over 16% within the third quarter and greater than 43% on a two-year foundation.

Client transactions declined 7.5% within the three-month interval, as there have been decrease gross sales of smaller ticket, do-it-yourself prospects and was a drop in lumber gross sales, Chief Monetary Officer Dave Denton stated on the earnings name.

Common ticket elevated practically 10% over the year-ago interval as extra customers purchased home equipment and flooring and the worth of some gadgets like copper rose resulting from inflation, Denton stated.

Digital gross sales jumped by 25% within the third quarter.

Lowe’s additionally stated it plans to purchase again $3 billion in shares within the fourth quarter, bringing complete repurchases for the yr to $12 billion. It purchased again 13.7 million of its personal inventory for $2.9 billion in the course of the newest quarter.

Tapping a brand new market

The retailer can also be kicking off a brand new initiative, referred to as Livable House, to turn into a “one-stop store” for child boomers who need to age in place. It’s coaching workers, including useful resource guides and rising stock to cater to seniors who might have much less mobility or need to add options to their properties for security, corresponding to seize bars within the bathe. It launched the trouble in collaboration with nonprofit AARP.

Ellison stated that market represents about $32 million in gross sales.

In an interview with CNBC, Ellison stated the thought was impressed by his personal expertise of attempting to retrofit his father’s residence with options like a walk-in bathtub and wheelchair ramp.

“At the same time as a CEO of a house enchancment firm, it was extraordinarily tough to get these issues completed,” he stated. “It dawned on me that if my Dad is having these points and I am the CEO of a house enchancment firm, then the higher child boomer inhabitants and caretakers should even have the identical challenge.”

Learn the corporate’s press launch right here.

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