Lowe’s Companies shares fell after the home improvement retailer reported disappointing quarterly earnings, with same-store sales growth coming in below rival Home Depot.
For the first quarter, Lowe’s posted net income of $602 million, or 70 cents per share, down from $884 million, or 98 cents per share, a year ago. Adjusted earnings rose to $1.03 a share from $0.87 but missed Wall Street estimates of $1.06.
Quarterly sales of $16.9 billion missed analyst estimates of $17 billion despite increasing 10.7% from a year ago, while same-store sales rose 1.9%, below forecasts of $2.9%.
Lowe’s CEO Robert Niblock said “weather challenges” including excessive flooding and severe hurricanes in the Southeast U.S. affected the company’s performance.
“A solid macroeconomic backdrop, combined with our project expertise, drove above average performance in indoor projects,” he said Wednesday in a news release. “We also continued to advance our sales to Pro customers, delivering another quarter of comparable sales growth well above the company average.”
But on news of the earnings, Lowe’s shares declined 3% to $79.85. Home Depot had a stronger first quarter, reporting last week that same-store sales rose 5.5% fueled by strong sales of big-ticket items.
Lowe’s results “weren’t as robust as hoped, given the momentum in the housing sector,” CNBC said, noting that “With rising home prices leading Americans to invest more in their properties, the home improvement sector has been a rare outperformer in retail of late.”
According to a report from HomeAdvisor, U.S. homeowners are spending 60% more on home improvement projects now than in the past year.
Lowe’s said most interior product categories — including kitchens, flooring and appliances — performed above average in the first quarter, while exterior categories such as seasonal and outdoor living performed below average.
For the full fiscal year, the company reaffirmed that it expects comparable store sales to increase 3.5%. It is also forecasting earnings of $4.30 per share, well below analysts’ expectations of $4.64.