Lowe’s Raises FY21 Revenue View Above Market, Despite Weak Q2 Comps
While announcing higher second-quarter profit and weak comparable sales, home improvement retailer Lowe’s Companies, Inc. (LOW) on Wednesday raised its fiscal 2021 outlook.
In pre-market activity on the NYSE, Lowe’s shares were gaining around 2.3 percent to trade at $186.50.
According to the company, the outlook revision reflects very strong first-half financial results, with strong sales trends continuing into August.
For the year, the company now projects revenue of approximately $92 billion, representing approximately 30 percent comparable sales growth on a two-year basis.
The company earlier said it was tracking ahead of the robust market scenario provided at its December investor update, which assumed fiscal 2021 sales of $86 billion.
On average, 29 analysts polled by Thomson Reuters expect full-year sales of $91.53 billion. Analysts’ estimates typically exclude special items.
Further, Lowe’s projects gross margin rate up slightly, compared to prior year. Operating margin is now expected to be 12.2 percent, compared to previously projected 12 percent margin.
Lowe’s also said it continues to plan for $9 billion in share repurchases and around $2 billion in capital expenditures in fiscal 2021.
In its second quarter, net earnings grew to $3.0 billion or $4.25 per share from last year’s $2.8 billion or $3.74 per share. Total sales were $27.6 billion, compared to $27.3 billion last year.
Analysts expected earnings of $4 per share on sales of $26.79 billion for the quarter.
Comparable sales decreased 1.6 percent. Comparable sales for the U.S. home improvement business decreased 2.2 percent for the second quarter. U.S. comparable sales increase on a two-year basis was 32 percent.
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