Lowe’s misses sales estimates, sees slower growth in 2024

Lowe’s misses sales estimates, sees slower growth in 2024

Lowe’s Cos reported lower-than-expected quarterly sales on Tuesday, as the home improvement retailer faced a tough comparison with the previous year when the Covid-19 pandemic boosted demand for its products.

The company also forecast annual sales and profit below analysts’ estimates, signaling a slowdown in the home improvement market as consumers shift their spending to other areas such as travel and entertainment.

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Lowe’s said it expects sales of $88 billion to $90 billion for the fiscal year ending January 2024, compared with the average analyst estimate of $90.48 billion, according to Refinitiv data. It also projected earnings per share of $13.60 to $14.00, below the consensus estimate of $13.79.

A Lowe's store in Round Rock, Texas. REUTERS/Sergio Flores

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The company’s chief executive officer, Marvin Ellison, said the guidance was based on a “conservative” view of the market, and that Lowe’s was well-positioned to gain market share and grow its online and professional businesses.

Lowe’s has been investing in expanding its product assortment, enhancing its digital capabilities, and improving its customer service to compete with its larger rival Home Depot, which also reported lower-than-expected sales last week.

However, both companies face challenges from rising inflation, supply chain disruptions, labor shortages, and higher interest rates, which could dampen the demand for home renovation projects.
Lowe’s said its comparable sales, or sales at stores open for at least a year, fell 2.2% in the third quarter, while analysts had expected a 0.9% decline. Total net sales dropped 9.3% to $24.96 billion, missing the estimate of $25 billion.

The company’s net income rose 6.4% to $2.54 billion, or $3.75 per share, beating the estimate of $3.52 per share, helped by lower expenses and higher margins.

Lowe’s shares fell 2.7% to $248.50 in premarket trading. The stock has gained about 28% this year, outperforming Home Depot’s 18% rise.

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Source : yahoo finance

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