Financial Performance

Lowe’s Posts Mixed Results, Sees Spring Surge

CEO Marvin Ellison says the retailer's turnaround is progressing, citing "results we are seeing in early spring categories."
Matthew HellerFebruary 27, 2019

Lowe’s Companies said Wednesday it was making progress in turning around its business, citing comparable sales growth and optimism about the coming spring season.

For the fourth quarter, the home improvement chain reported a net loss of $824 million, or $1.03 per share, due to restructuring charges but excluding one-time items, it earned 80 cents per share.

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Revenue increased about 1% to $15.65 billion while comparable store sales, a key retail metric, grew 1.7 percent during the quarter, missing analysts’ expectations for growth of 2.1%. But U.S. same-store sales rose 2.4%, with growth of 5.8% in January.

Analysts had expected earnings of 79 cents per share on revenue of $15.74 billion.

“Overall, we are pleased with the progress we are making in our business,” Lowe’s CEO Marvin Ellison said.

He added that the company was “encouraged by an improved comparable sales progression through the fourth quarter, culminating in U.S. home improvement comp growth of 5.8% in January. Although we have remaining work to do, we are pleased with the results we are seeing in early spring categories, which is evidence that we are focused on the right actions at this stage of our transformation.”

As the Charlotte Observer reports, Ellison, who took over as Lowe’s chief executive in July, “has taken major steps to improve the company’s financial health, from closing stores to replacing executives.” He has also hired thousands of software workers and opened fulfillment centers to boost online sales, while also trying to improve the in-store experience.

“We like the direction [Lowe’s is] headed,” Eric Grasse, a vice president at Dillon & Associates, told Reuters.

Ellison said most of the company’s transformation efforts over the past six months have been to lay a foundation for an improved spring season and fiscal 2019. For this year, it is now predicting earnings per share of between $6 and $6.10 versus analysts’ expectations of $6.04 per share.

“As home prices are increasing, consumers are staying in their homes longer and because of their improved financial position, they are investing in their homes,” Ellison said in an earnings call.