Strong consumer and pro sales helped propel Lowe’s Cos. to better-than-anticipated third-quarter results.
For the quarter, Lowe’s recorded net earnings of $154 million, or 25 cents per diluted share, versus $1.9 billion, or $2.73 per diluted share, for the year-previous period. Excluding an impairment charge related to sale of the Lowe’s Canadian business, third quarter adjusted diluted EPS increased 19.8% to $3.27 versus the year-before period.
Lowe’s beat a Yahoo Finance-published analyst consensus estimate on earnings, which was for $3.10 per adjusted diluted share, and on revenues, which was for $23.12 billion.
Total sales for the third quarter were $23.48 billion versus $22.92 billion as comparable sales for the U.S. home improvement business increased 3% in the period year over year, the company reported. Operating income was $924 million versus $2.79 billion in the year-before period.
In a conference call, Marvin Ellison, Lowe’s chairman, president and CEO, said better-than-expected results got a boost from “nesting trends” with consumers traveling less as summer wound down and pro sales continued to gain. He added pressures on the housing market have not affected Lowe’s sales as consumers facing higher mortgage rates are investing in refreshing and remodeling homes, driving consumer do-it-yourself and pro sales. Lowe’s earnings also got a boost from productivity initiatives, which have provided the resources to increase compensation for front-line associates. Ellison noted e-commerce sales grew 12% in the quarter, four times the U.S. growth rate and reaching a sales penetration of 10%.
“We delivered better-than-expected results this quarter, with U.S. comps up 3%, driven by Pro growth of 19% and improved DIY sales trends,” Ellison said. “Sales on Lowes.com grew 12%, on top of 25% growth last year. We also drove substantial improvement in adjusted operating margin through disciplined execution and cost management. This enabled us to award $200 million in bonuses to our front-line hourly associates, while also announcing $170 million in permanent wage increases.”
As of October 28, Lowe’s operated 1,969 home improvement and hardware stores in the United States and Canada.