Lowe's Increases Both Earnings & Sales YOY in Q2

Andrew Cummings
August 24, 2017

Sales at Lowe's stores open for more than a year rose 4.5 percent, edging past the 4.3 percent expected by analysts polled by Consensus Metrix.

Lowe's stated that comparable sales for the home improvement business in the USA increased 4.6% versus the prior-year quarter.

Fiscal second quarter adjusted earnings rose to $1.57 per share from $1.37 a year ago, but that missed the $1.63 estimate from analysts polled by Capital IQ. "I would like to thank our employees for their passion and commitment to serving customers". Lowe's Cos. Inc. reports earnings, Wednesday, Aug. 23, 2017. They also noted that Lowe's is closing in on rival Home Depot [s:HD] in terms of comparable sales.

Lowe's Companies Inc. (LOW) is extending the hours workers work per shift at a time when home owners tend to spend money on renovation projects.

CEO Robert Niblock said in a statement that the company's performance in the first half of 2017 came short of management's expectations, but he added that Lowe's is making investments to boost sales.

In the near term, Lowe's expects its more aggressive marketing will pressure its operating margin.

"To more fully capitalize on our strong traffic trends and ensure we are delivering an excellent customer experience, we are reinvesting in store hours at the customer service associate level", she stated.

Credit Suisse analyst Seth Sigman add team see some "bright spots" but write that it was "not a clean quarter".

"While Lowe's is benefiting from the more buoyant demand from a strong housing market and stable economy, it still plays second fiddle to Home Depot - which remains more of a "go-to" destination", Neil Saunders, managing director of GlobalData Retail, said.

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