Shares of Lowe’s Companies
LOW,
rose 1.9% in premarket trading Wednesday, after the home improvement retailer reported fiscal second-quarter profit that topped expectations but sales that surprisingly declined, citing a “shortened spring” and lower demand in certain discretionary categories. Net income for the quarter to July 29 was $2.99 billion, or $4.67 a share, after income of $3.02 billion, or $4.25 a share, in the year-ago period, as the weighted average shares outstanding fell 7.5% to 638 million. That beat the FactSet consensus for earnings per share of $4.58. Sales declined 0.3% to $27.48 billion from $27.57 billion, while the FactSet consensus was for an increase to $28.12 billion. Overall same-store sales decreased 0.3%, missing the FactSet consensus for a 2.1% increase, and U.S. same-store sales edged up 0.2% to miss expectations of 1.9% growth. Cost of sales rose 0.5% to $9.13 billion, as gross margin contracted to 33.2% from 33.8%. For fiscal 2022, the company expects EPS at the top end of its guidance range of $13.10 to $13.60, but expects total sales and same-store sales at the bottom end of its guidance for sales of $97 billion to $99 billion and for same-store sales of down 1% to up 1%. The company said it will help its hourly front-line employees during the period of high inflation by paying out $55 million in bonuses. The stock has rallied 10.4% over the past three months through Tuesday, while rival Home Depot Inc. shares
HD,
have advanced 8.8% and the S&P 500
SPX,
has gained 5.3%.
