Lowe’s Cos. efforts to a profit in the fourth quarter amid ongoing efforts to accelerate its online business.
The home improvement retailer reported net income of $509 million, or $0.66 per share, for the quarter ended Jan. 31, compared with a loss of $824 million, or $1.03 per share, a year ago. Excluding items, the company earned $0.94 per share, topping analyst estimates of $0.91.
Revenue rose to $16.03 billion from $15.65 billion a year ago, Analysts had forecast revenue of $16.15 billion. Same-store sales grew by 2.5%, missing estimates of 3.6%.
In a statement, CEO Marvin R. Ellison noted that the company’s sales growth was driven almost entirely by its U.S. brick-and-mortar stores, supported by investments in technology, store environment and the Pro business.
“We have a detailed road map in place to modernize our e-commerce platform and accelerate Lowes.com sales, which combined with the sales productivity improvement in our physical stores, underscores our opportunity to unlock additional growth,” Ellison said. “Though we are only one year into a multi-year plan, we made significant progress transforming our company and believe we are well-positioned to capitalize on solid demand in a healthy home improvement market.”
Analyst Neil Saunders, managing director of GlobalData Retail, commented that while Lowe’s digital channel is growing, it is doing so at a much slower pace than the overall sector, so Lowe’s is losing online market share in home improvement.
“Admittedly, Lowe’s is in the enhancing its website and mobile app,” he said. “But there is still more work to do to deliver an experience that is at least comparable to Home Depot. Getting digital right is critical if Lowe’s is to generate higher growth, if only because increasing numbers of consumers start their journey by researching online and many more are now ordering online too.”
Lowe’s reported its earnings one day after rival Home Depot reported earnings, revenue and same-store sales that beat the Street.
Lowe's forecast that fiscal 2021 adjusted earnings will range from $6.45 to $6.65 on comparable-store sales growth between 3% and 3.5%. Analysts had forecast earnings of $6.67.
As of Jan 31, 2020, Lowe’s operated 1,977 home improvement and hardware stores in the United States and Canada.