Lowe’s swings to Q4 loss on charges; encouraged by early signs of spring business
Lowe’s Companies reported mixed results for its fourth quarter as its earnings were impacted by a weak housing market in Canada.
The home improvement retailer reported a net loss of $824 million, or $1.03 per share, for the quarter ended Feb. 1, compared with net income of $554 million, or 67 cents a share in the year-ago period. Its performance was weighed down by $1.6 billion in pre-tax charges that included a $952 million impairment charge in Canada and various store closing costs. Excluding one-time items, Lowe’s earned 80 cents per share, a penny a share ahead of analysts’ forecast based on Refinitiv data.
Net sales were $15.6 billion, up from $15.5 billion last year. Comparable-store sales for U.S. stores were up 2.4%.
CEO Marvin Ellison said he was encouraged by the direction of same store sales, which increased from the third quarter. In January, the U.S. home improvement comps increased to 5.8%, he said.
“Most of the intense work over the past six months to transform our company has been in preparation for an improved spring season and fiscal 2019,” said Ellison. “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.”
For the full year, Lowe’s turned in net sales of $71.3 billion, up from $68.6 billion in the prior year. The company’s net earnings for the year declined to $2.3 billion, down from $3.4 billion.
Looking ahead, Ellison sounded a confident note about the U.S. economy.
“U.S. macroeconomic fundamentals remain sound for 2019, and we will continue to implement process and technology improvements to capitalize on the immediate opportunity to improve results,” he stated. “We anticipate continued weakness in the Canadian housing market in the near-term, but remain confident in our market position in Canada and the long-term potential of that business.”
Under Ellison, Lowe’s has been sharpening its focus and cutting underperforming stores and ancillary businesses. The company announced plans to close 47 stores in November. That followed the news that it would shutter its Orchard Supply chain.
More recently, Lowe’s exited its Irish smart home business, which for years was a prominent end-cap item for the home improvement retailer.
Lowe’s earnings followed by one day the earnings report of rival Home Depot, which reported net income of $2.3 billion and U.S. comp-store sales of 3.7%.
As of Feb. 1, 2019, the company operated 2,015 home improvement and hardware stores in North America.
The home improvement retailer reported a net loss of $824 million, or $1.03 per share, for the quarter ended Feb. 1, compared with net income of $554 million, or 67 cents a share in the year-ago period. Its performance was weighed down by $1.6 billion in pre-tax charges that included a $952 million impairment charge in Canada and various store closing costs. Excluding one-time items, Lowe’s earned 80 cents per share, a penny a share ahead of analysts’ forecast based on Refinitiv data.
Net sales were $15.6 billion, up from $15.5 billion last year. Comparable-store sales for U.S. stores were up 2.4%.
CEO Marvin Ellison said he was encouraged by the direction of same store sales, which increased from the third quarter. In January, the U.S. home improvement comps increased to 5.8%, he said.
“Most of the intense work over the past six months to transform our company has been in preparation for an improved spring season and fiscal 2019,” said Ellison. “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.”
For the full year, Lowe’s turned in net sales of $71.3 billion, up from $68.6 billion in the prior year. The company’s net earnings for the year declined to $2.3 billion, down from $3.4 billion.
Looking ahead, Ellison sounded a confident note about the U.S. economy.
“U.S. macroeconomic fundamentals remain sound for 2019, and we will continue to implement process and technology improvements to capitalize on the immediate opportunity to improve results,” he stated. “We anticipate continued weakness in the Canadian housing market in the near-term, but remain confident in our market position in Canada and the long-term potential of that business.”
Under Ellison, Lowe’s has been sharpening its focus and cutting underperforming stores and ancillary businesses. The company announced plans to close 47 stores in November. That followed the news that it would shutter its Orchard Supply chain.
More recently, Lowe’s exited its Irish smart home business, which for years was a prominent end-cap item for the home improvement retailer.
Lowe’s earnings followed by one day the earnings report of rival Home Depot, which reported net income of $2.3 billion and U.S. comp-store sales of 3.7%.
As of Feb. 1, 2019, the company operated 2,015 home improvement and hardware stores in North America.