Q2 Sales Decline At Lowe's

Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.17 for the quarter ended Aug. 2, 2024, compared to diluted EPS of $4.56 in the second quarter of 2023. During the second quarter, the Company recognized a $43 million pre-tax gain associated with the 2022 sale of the Canadian retail business. This positively impacted second quarter diluted EPS by $0.07. Excluding this gain, second quarter 2024 adjusted diluted EPS1 was $4.10.

Total sales for the quarter were $23.6 billion, compared to $25.0 billion in the prior-year quarter. Comparable sales for the quarter decreased 5.1% driven by continued pressure in DIY bigger ticket discretionary spending and unfavorable weather adversely impacting sales in seasonal and other outdoor categories, partially offset by positive comparable sales in Pro and online.

"The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner.  At the same time, we continue to build momentum with our Total Home strategy reflected by our mid-single-digit positive comps with the Pro customer this quarter," said Marvin R. Ellison, Lowe's chairman, president and CEO. "As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers.  I'd like to extend my appreciation to our dedicated frontline associates who remain committed to serving our customers."

As of Aug. 2, 2024, Lowe's operated 1,746 stores representing 194.9 million square feet of retail selling space.

Capital Allocation

Through a disciplined capital program, the company continues to deliver long-term, sustainable shareholder value. During the quarter, the company repurchased approximately 4.4 million shares for $1.0 billion, and it paid $629 million in dividends.

Lowe's Business Outlook

Based on lower-than-expected DIY sales and a pressured macroeconomic environment, 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 gain associated with the 2022 sale of the Canadian retail business, recorded in the second 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 our Canadian retail business.

Full Year 2024 Outlook

• Total sales of $82.7 to $83.2 billion (previously $84 to $85 billion)
• Comparable sales expected to be down -3.5 to -4.0% as compared to prior year (previously down -2 to -3%)
• Adjusted operating income as a percentage of sales (adjusted operating margin) of 12.4 to 12.5% (previously 12.6 to 12.7%)
• Net interest expense of approximately $1.4 billion
• Adjusted effective income tax rate of approximately 24.5% (previously 25%)
• Adjusted diluted earnings per share of approximately $11.70 to $11.90 (previously $12.00 to $12.30)
• Capital expenditures of approximately $2 billion

Source : Lowe's

For all the very latest news and intelligence on the largest UK home improvement and garden retailers, sign up for the Insight DIY newsletter.