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Lowe’s quarterly profit rises as weather improves
Mooresville, N.C. • Lowe's second-quarter net income increased 10 percent, bolstered by improving weather.
The home improvement company's performance beat analysts' expectations, but the Mooresville, N.C. company lowered its full-year revenue outlook slightly, citing its year-to-date sales and prior assumptions for the second half.
Shares fell in premarket trading on Wednesday.
Spring is the most important season for home-improvement retailers, as homeowners and others work on their yards and gardens. While the season started off a bit cold and rainy, weather improved and shoppers headed out to stores to pick up supplies.
For the three months ended Aug. 1, Lowe's Cos. earned $1.04 billion, or $1.04 per share. A year earlier it earned $941 million, or 88 cents per share.
Analysts, on average, expected earnings of $1.02 per share, according to a FactSet survey.
Revenue rose 6 percent to $16.6 billion from $15.71 billion, topping Wall Street's $16.57 billion forecast.
Sales at stores open at least a year, a key indicator of a retailer's health, climbed 4.4 percent. This figure excludes results from stores recently opened or closed.
Chairman, President and CEO Robert Niblock said in a statement that the improving weather helped Lowe's recover most of the outdoor product sales it missed in the first quarter, when weather was less favorable.
"We believe home improvement spending will continue to progress in tandem with strengthening job and income growth," Niblock said.
On Tuesday larger rival Home Depot Inc.'s second-quarter results also topped Wall street's view due in large part to a rebound in the spring selling season.
Looking ahead, Lowe's now anticipates full-year revenue rising about 4.5 percent. Its prior outlook was for an approximately 5 percent increase. Based on fiscal 2013's revenue of $53.42 billion, the new guidance implies revenue of $55.8 billion. Lowe's reaffirmed its forecast for full-year earnings of about $2.63 per share.
Analysts are calling for fiscal 2014 earnings of $2.62 per share on revenue of $55.79 billion.
The company's stock declined $2.17, or 4.2 percent, to $49.35 before the market open.