Lowe's Companies reported better-than-expected earnings and sales and raised its full-year profit forecast as home improvement demand remains strong even in the face of inflation.
“We’re not seeing the negative impacts of inflation,” CEO Marvin R. Ellison told CNBC, adding that customers have been spending money to renovate and trade up for better products.
Net income totaled $154 million, or $0.25 a share, in the quarter ended Oct.28, down from $1.896 billion, or $2.73 a share, in the year-earlier period. Adjusted for a charge of $2.1 billion related to the company's Canadian retail business, earnings per share were $3.27, topping analysts’ estimates of $3.09.
[Read More: Lowe’s selling its Canadian business to Sycamore Partners]
Sales rose 3% to $23.5 billion from $22.9 billion, ahead of estimates of $23.1 billion. Total same-store sales increased 2.2%. Sales on Lowes.com grew 12%, on top of 25% growth last year.
"We delivered better-than-expected results this quarter, with U.S. comps up 3%, driven by Pro growth of 19% and improved DIY sales trends," stated Ellison in the earnings release. “We also drove substantial improvement in adjusted operating margin through disciplined execution and cost management. This enabled us to award $200 million in bonuses to our front-line hourly associates, while also announcing $170 million in permanent wage increases.”
Lowe’s earnings came the day after rival Home Depot released third-quarter earnings that also beat analysts’ estimates.
Lowe’s raised its full-year guidance, saying it now expects adjusted earnings per share of $13.65 to $13.80, up from its previous range of $13.10 to $13.60. Lowe’s lowered the top end of its revenue outlook to about $97 billion to $98 billion for the full year, from its previous top end of $99 billion
“There’s a lot of unknown out there, we’re not going to be overly bullish for no reason,” Ellison said on the chain’s earnings call. “There’s a lot of unknown out there, we’re not going to be overly bullish for no reason.”
As of Oct. 28, 2022, Lowe's operated 1,969 home improvement and hardware stores in the U.S. and Canada representing 208 million square feet of retail selling space, and it serviced approximately 212 dealer-owned stores.