Lowe's Q3 Earnings Beat, Comps Decline, FY24 Outlook Revised

In This Article:

Lowe’s Companies, Inc. LOW came up with third-quarter fiscal 2024 results, wherein the top and bottom lines beat the Zack Consensus Estimate. However, the Mooresville, NC-based company faced year-over-year declines in both metrics and extended its streak of soft comparable sales performance.

The drop in big-ticket discretionary spending among Do-It-Yourself (DIY) customers hurt the company’s performance. However, this was partly mitigated by storm-related sales and growth in Pro and online comparable sales. The company also witnessed increased demand for smaller-ticket outdoor DIY projects.

Considering its third-quarter performance and the expectation of modest storm-related demand in the final quarter, Lowe’s has revised its full-year 2024 operating outlook.

LOW’s Quarterly Performance: Key Metrics and Insights

The home improvement retailer posted adjusted quarterly earnings of $2.89 per share, which came ahead of the Zacks Consensus Estimate of $2.82. However, the figure marked a decline from earnings of $3.06 per share reported in the same period last year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales of $20,170 million surpassed the Zacks Consensus Estimate of $19,955 million but declined 1.5% year over year. Comparable sales for the quarter fell 1.1%, showing an improvement from the 5.1% decline recorded in the second quarter. While muted demand from DIY customers weighed on comparable sales, the company achieved high-single-digit growth in Pro comparable sales. This performance outpaced our estimate of a 3.1% decline in comparable sales.

The gross profit declined 1.4% year over year to $6,796 million, while the gross margin remained flat at 33.7%. We had expected a gross margin expansion of 20 basis points.

The operating income decreased 5.9% to $2,536 million, while the operating margin shrunk 60 basis points to 12.6%. We had envisioned a 70-basis point contraction in the operating margin.

Lowe's Companies, Inc. Price, Consensus and EPS Surprise

Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe's Companies, Inc. Price, Consensus and EPS Surprise

Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote

LOW’s Financial Health Snapshot

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $3,271 million, long-term debt (excluding current maturities) of $32,906 million and shareholders’ deficit of $13,419 million.

For the nine months ended Nov. 1, 2024, Lowe’s generated cash flow from operations of $8,714 million. During the quarter, the company executed a buyback of around 2.9 million shares, amounting to $758 million.

Waiting for permission
Allow microphone access to enable voice search

Try again.