Revenue Misses Expectations As Lowe's Offers Soft Sales Outlook

On Wednesday, Lowe's released fiscal fourth-quarter sales results that fell short of Wall Street forecasts along with a cautious prognosis for the next year.

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Based on a Trade Algo survey of analysts, the retailer performed as compared to what Wall Street had predicted:

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$2.28 adjusted earnings per share, compared to $2.21 projected

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Revenue: $22.45 billion versus the anticipated $22.69 billion

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For the three months that ended on February 3, the firm reported a net income of $957 million, down from $1.21 billion, or $1.78 per share, in the same time last year.

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Sales increased from $21.34 billion to $22.45 billion over the previous year. Yet, an additional week in Lowe's fiscal fourth quarter resulted in revenues of $1.4 billion. Without that extra week, sales would have been marginally lower than they were during the same time last year.

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Same-store sales worldwide decreased by 1.5%, with a 0.7% decrease in the United States.

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In contrast to Wall Street's forecast of $90.48 billion for the fiscal year 2023, Lowe's stated that it anticipates total sales to range between $88 billion and $90 billion. Also, the business anticipates same-store sales to be flat or down 2% from the previous fiscal year.

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In contrast to analysts' projection of $13.79, the business forecasts its earnings per share for the year to be between $13.60 and $14.00.

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Sales in the category increased 10% in the United States for Lowe's, which has been seeking to expand its Pro market, and online sales increased 5%.

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Around this time last year, the housing market was booming, encouraging many people to fix up and refurbish their homes. Wall Street's expectations decreased compared to previous quarters as the market steadily cooled in the second half of 2022.

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The home remodeling industry expanded during the Covid pandemic as consumers who were stranded at home made expensive improvements and improved their living environments. These days, there is more pressure on the market. Consumers have been spending their discretionary money on vacation and leisure rather than items like patio furniture and paint because they are feeling the pressure from high inflation.

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Rival Home Depot released a muted outlook last week and missed Wall Street's revenue projections for the first time since November 2019. As the pandemic-fueled boom fades, the business predicts flat consumer spending and increased pressure on the industry in the upcoming quarters.

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The home renovation industry has long benefited from the nation's chronic housing crisis and its aging housing stock, but the merchants may also gain from these factors.

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Many people with low mortgage rates may decide to stay in their houses and make modifications rather than move somewhere new as a result of rising interest rates and a stagnating housing market. In fact, according to data made public on Wednesday, demand for mortgages to purchase homes is at a 28-year low.