Decreased Demand For Big-Ticket Items Hits Lowe's Sales

Lowe's Companies, Inc. (NYSE: LOW) today [19th November] reported net earnings of $1.7 billion and diluted earnings per share (EPS) of $2.99 for the quarter ended Nov. 1, 2024, compared to diluted EPS of $3.06 in the third quarter of 2023. During the third quarter, the company recognized a $54 million pre-tax gain associated with the 2022 sale of the Canadian retail business. This positively impacted third quarter diluted EPS by $0.10. Excluding this gain, third quarter 2024 adjusted diluted EPS1 was $2.89.

Total sales for the quarter were $20.2 billion, compared to $20.5 billion in the prior-year quarter. Comparable sales for the quarter decreased 1.1%, driven by continued softness in DIY bigger-ticket discretionary demand, which was partly offset by storm-related sales and positive comparable sales in Pro and online.

"Our results this quarter were modestly better-than-expected, even excluding storm-related activity, driven by high-single-digit positive comps in Pro, strong online sales and smaller-ticket outdoor DIY projects," said Marvin R. Ellison, Lowe's chairman, president and CEO.  "I'd like to extend my heartfelt sympathy to those who suffered losses from Hurricanes Helene and Milton.  I would also like to express my appreciation for our associates, suppliers and first responders for their commitment to the impacted communities.  Next month at our Analyst and Investor Conference, I look forward to discussing our new growth and productivity initiatives, which underscore our confidence that we are well-positioned to capitalize on the expected recovery in home improvement."  

As of Nov. 1, 2024, Lowe's operated 1,747 stores representing 195.0 million square feet of retail selling space.

Capital Allocation
With a disciplined focus on its leading capital allocation program, the company continues to generate long-term shareholder value. During the quarter, the company repurchased approximately 2.9 million shares for $758 million, and it paid $654 million in dividends.

Lowe's Business Outlook

Based on third quarter results and anticipated modest storm-related demand in the fourth quarter, the company is updating its outlook for the operating results of full year 2024.

Adjusted operating income, adjusted operating margin, adjusted effective income tax rate and adjusted diluted EPS are non-GAAP financial measures that exclude the gains associated with the 2022 sale of the Canadian retail business, recorded in the second and third quarter. The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items (which may be significant) without unreasonable effort, including timing of adjustments associated with the sale of the Canadian retail business.

Full Year 2024 Outlook

• Total sales of $83.0 to $83.5 billion (previously $82.7 to $83.2 billion)
• Comparable sales expected to be down -3.0 to -3.5%, as compared to prior year (previously down -3.5 to -4.0%)
• Adjusted operating income as a percentage of sales (adjusted operating margin) of 12.3 to 12.4% (previously 12.4 to 12.5%)
• Net interest expense of approximately $1.3 billion (previously $1.4 billion)
• Adjusted effective income tax rate of approximately 24.5%
• Adjusted diluted earnings per share of approximately $11.80 to $11.90 (previously $11.70 to $11.90)
• Capital expenditures of approximately $2 billion

Source : Lowe's 

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