Lowe’s Q3 income jumps; to close 34 stores in Canada
Lowe’s Cos. reported third-quarter income that topped Street expectations even as its revenue fell short.
The home improvement giant on Wednesday also reported that it will shutter 34 underperforming stores — 26 Rona locations, 6 Lowe’s stores, and 2 Reno-Depot stores — in Canada. It also plans to streamline its multiple Canadian store banners to drive efficiency and reduce operational complexity. (Lowe’s Canada operates and services a network of more than 600 stores including corporate and independent locations. The store network includes five banners: Lowe’s, Rona, Reno-Depot, Ace and Dick’s Lumber.)
“We are committed to the Canadian market and are taking decisive action to improve the performance and profitability of our Canadian operations,” stated Lowe’s CEO Marvin E. Ellison. “We also have a detailed roadmap and a very experienced team in place to repair our Lowes.com business.”
Lowe’s net earnings jumped 67% to $1.05 billion, or $1.36 a share, in the quarter ended Nov. 1, from $629 million in the year-ago quarter. Adjusted earnings were $1.41 a share, beating estimates of $1.35 a share.
Net sales for the quarter were $17.39 billion, down from $17.42 billion, missing estimates of $17.69 billion. Consolidated same-store sales rose 2.2%, dragged down by weaker performance in Canada. Same-store sales in the U.S. rose 3%.
“We were pleased with the performance of our U.S. home improvement stores, which reflects a solid macroeconomic backdrop and continued progress in our transformation driven by investments in customer experience, improved merchandise category performance, and continued growth of our Pro business,” stated CEO Marvin Ellison.
Lowe’s third-quarter release followed by one day a similar release from rival Home Depot. In the third quarter, Home Depot posted U.S. comp-store sales growth of 3.8%, compared to 3.0% for Lowe’s.
Looking ahead, Lowe’s expects full-year sales to increase about 2%, and comparable-store sales to increase about 3%.
As of Nov. 1, 2019, Lowe’s operated 2,004 home improvement and hardware stores in the United States and Canada.