Lowe’s beats earnings, misses sales in Q2; cuts full-year forecast
Lowe’s Companies Inc. is predicting a slowdown in the home improvement industry following a mixed second quarter of fiscal 2024.
For the full fiscal year 2024, the home improvement giant is now projecting total sales of $82.7 to $83.2 billion, down from previous estimates of $84 to $85 billion. Comparable sales are now expected to be down 3.5 to 4% from the prior year, up from the previously forecast 2 to 3%.
In addition, Lowe’s now expects adjusted diluted earnings per share of approximately $11.70 to $11.90, instead of its previously estimated $12 to $12.30. The retailer cited "lower-than-expected DIY sales and a pressured macroeconomic environment" as driving factors in its decision to revise its previously issued full-year guidance downward.
Chief Lowe’s rival The Home Depot also recently sounded a cautionary note about the rest of the year as consumers put off big projects amid high interest rates. The Home Depot said it now expects full-year fiscal 2024 comparable sales to decline by 3% to 4% compared with the prior fiscal year, down from its previous estimate of about 1%.
Lowe’s reports mixed results in second quarter
For the second quarter ended Aug. 2, 2024, Lowe’s reported net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.17, compared to diluted EPS of $4.56 in the second quarter of 2023. Despite the year-over-year decline, the retailer beat Wall Street EPS estimates of $3.97.
During the quarter, the company recognized a $43 million pre-tax gain associated with the 2022 sale of its Canadian retail business. This positively impacted second quarter diluted EPS by $0.07. Excluding this gain, second quarter 2024 adjusted diluted EPS was $4.10.
[READ MORE: Done Deal: Lowe’s sells its Canadian retail business]
Total sales for the quarter were $23.6 billion, down roughly 6% from $25 billion in the prior-year quarter. Comparable sales for the quarter decreased 5.1%, driven by what Lowe’s said was continued pressure in DIY bigger ticket discretionary spending and unfavorable weather adversely impacting sales in seasonal and other outdoor categories, partially offset by positive comparable sales in its professional and online businesses.
"The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner," said Marvin R. Ellison, Lowe's chairman, president and CEO. "At the same time, we continue to build momentum with our Total Home strategy reflected by our mid-single-digit positive comps with the Pro customer this quarter."
“As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers," Ellison said. "I'd like to extend my appreciation to our dedicated frontline associates who remain committed to serving our customers."
As of Aug. 2, 2024, Lowe's operated 1,746 stores representing 194.9 million square feet of retail selling space.
