LOW

Lowe’s reports gross margins in 1Q that were below consensus, but the retailer’s better-than-expected sales during the quarter kept profits in line with the consensus estimate, DA Davidson analyst Michael Baker says in a research note. On the margin side, it’s a tough look for Lowe’s, which had been narrowing its margin gap with rival Home Depot for the past several years only for the gap to widen in 1Q, the analyst says. Still, the sales decline was lighter than expected and guidance was reiterated, Baker says. Lowe’s is off 1.4% in early trading.

Home improvement spending may be getting closer to a bottom as the rate of Lowe’s comparable sales declines continued to ease in 1Q, M Science analyst John Tomlinson says in a note. Same-store sales were down 4.1%, beating analyst forecasts for a 5.6% decline and an improvement from a 6.2% drop in 4Q and 7.4% decline in 3Q. Unlike its rival Home Depot, Lowe’s logged stronger quarterly results that topped analyst expectations in part from gains in its professional-customers channel, though spending on big-ticket items remains under pressure, the analyst says. Shares slide 3.1% to $222.12.

Lowe’s notched its best regional performance in 1Q come from the Western U.S., says Joe McFarland, executive vice president of stores, on a call with analysts. He says markets that saw the best weather during the quarter generated the best performance. CFO Brandon Sink notes that the performance from its professional customer cohort, which make up about a quarter of overall sales, was consistent across all regions. CEO Marvin Ellison adds that the company’s rural locations were its best performing subset of stores in 1Q, while the western markets outperformed overall.

Our 12-month target of $238, up $17, is 19.5x our FY 25 EPS view of $12.20 (down $0.06; FY 26’s down $0.28 to $13.48), a premium to historical averages. Our P/E reflects LOW’s productivity initiatives, improved customer service, and improving rate cut expectations. FQ1 (May) EPS of $3.06 (-16.6% Y/Y) beat by $0.10 on revenue of $21.4B (-4.4% Y/Y), 1% above consensus. Comp sales declined 4.1% on a 1% ticket contraction and a 3.1% transaction count decline. Notably, Pro and online sales achieved growth in Q1, with Pro backlogs flat Y/Y. Gross margin of 33.2% declined 50 bps due to investments, promotions, and a decline in credit revenue. SG&A advanced 140 bps to 18.8%, netting a 200-bp EBIT decline to 12.4%. Despite the top- and bottom-line beat, FY 25 guide remains unchanged. We see the roll-out of the loyalty program as necessary in meeting a stressed consumer. LOW assures its

Lowe’s sales were impacted by ongoing pressure on discretionary spending for big-ticket items, or ones costing $500 or more, that doesn’t appear to be going away anytime soon, Edward Jones analyst Brian Yarbrough says in a research note. The pullback will delay an eventual turnaround to positive sales growth, though long-term drivers are still intact, the analyst says. Lowe’s management says on a call with analysts that big-ticket categories will likely continue to face pressure among the retailer’s do-it-yourself customers. Shares are down 3.1% at $222.

The following is a summary of the Lowe’s Companies, Inc. (LOW) Q1 2024 Earnings Call Transcript: Financial Performance: Lowe’s Q1 reported sales of $21.4 billion, with comparable sales down by 4.1% from last year. The company delivered positive Q1 growth in Pro and online sales despite a challenging home improvement environment. Gross margin was at 33.2%, down by 49 basis points due to ongoing supply chain investments and spring promotions. Operating margin declined to 12.4%. Lowe’s generated $3.9 billion in free cash flow and made $382 million in capital expenditures. The company plans to use free cash flow in 2024 to repay a $450 million bond maturity with the remainder for share repurchases. Business Progress: Lowe’s achieved traction in its Total Home strategy, gaining Pro customers and improving online sales. It launched a successful SpringFest campaign and expanded delivery options through partnerships with DoorDash and Shipped. The company launched a

Lowe’s Companies (LOW) reported fiscal Q1 diluted earnings Tuesday of $3.06 per share, down from $3.77 a year earlier. Analysts polled by Capital IQ expected $2.96. Total sales for the quarter ended May 3 was $21.36 billion, down from $22.35 billion a year earlier. Analysts surveyed by Capital IQ expected $21.1 billion. The company said it expects full-year 2024 diluted earnings of $12.00 to $12.30. Analysts surveyed by Capital IQ expect $12.15. The company expects total sales for 2024 of $84 billion to $85 billion. Analysts polled by Capital IQ expect $84.41 billion.

Lowe’s (LOW) on Tuesday recorded better-than-expected fiscal first-quarter results, even as consumers cut back on big-budget spending on home improvement projects. The retailer’s earnings came in at $3.06 per share for the quarter ended May 3, down from $3.77 the year before, but topped the Capital IQ-polled consensus of $2.96. Sales slipped to $21.36 billion from $22.35 billion, but were ahead of the Street’s view for $21.1 billion. Shares rose nearly 3% in premarket activity. Comparable sales decreased 4.1%, compared with the 5.7% drop modeled by analysts, as positive pro and online same-store sales partially offset the decline in do-it-yourself big ticket discretionary spending, according to Lowe’s. “We are pleased with our start to spring, driven by strong execution and enhanced customer service,” Chief Executive Marvin Ellison said in a statement. “We think the company got off to a tough start, but our data indicated that sales trends accelerated towards

LOWE’S REPORTS FIRST QUARTER 2024 SALES AND EARNINGS RESULTS PR Newswire MOORESVILLE, N.C., May 21, 2024 — Comparable Sales Decreased 4.1%; Diluted EPS of $3.06 — — Affirms Full Year 2024 Outlook — MOORESVILLE, N.C., May 21, 2024 /PRNewswire/ — Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $1.8 billion and diluted earnings per share (EPS) of $3.06 for the quarter ended May 3, 2024, compared to diluted EPS of $3.77 in the first quarter of 2023, which included a gain associated with the 2022 sale of the Canadian retail business. Excluding this gain, first quarter 2023 adjusted diluted EPS(1) was $3.67. Total sales for the quarter were $21.4 billion, compared to $22.3 billion in the prior-year quarter. Comparable sales for the quarter decreased 4.1% as the decline in DIY big ticket discretionary spending was partially offset by positive comparable sales in Pro and online. “We are pleased

Lowe’s Companies (NYSE:LOW) reported quarterly earnings of $3.06 per share which beat the analyst consensus estimate of $2.94 by 4.08 percent. The company reported quarterly sales of $21.364 billion which beat the analyst consensus estimate of $21.123 billion by 1.14 percent.

Mizuho analyst David Bellinger initiates coverage on Lowe’s Companies (NYSE:LOW) with a Buy rating and announces Price Target of $280.