Lowe’s Cos. raised its adjusted earnings outlook for the year and said it plans to reorganize in Canada, even as the home-improvement chain reported third-quarter sales that trailed analysts’ estimates. The shares advanced in early trading.
- Adjusted diluted earnings per share will be between US$5.63 to US$5.70 for the fiscal year ending Jan. 31, the company said Wednesday. That’s above an earlier estimate of as much as $5.65. Same-store sales increased 2.2 per cent, missing projections for 3.2 per cent growth. The company also said it plans to shut 34 under-performing stores in Canada.
Key Insights
- The adjusted earnings guidance and store-closing plans show that Lowe’s is pushing hard to get back on track, even as rival Home Depot Inc. disappointed investors earlier this week.
- Lowe’s is often compared to Home Depot, and for many years it struggled to keep pace. That had changed this year, with Lowe’s at times posting better sales results.
- Gains in home prices accelerated in the quarter, boosted by a decline in borrowing costs.. That usually means home-improvement spending picks up because more people see their properties as investments.
Market Reaction
- Lowe’s rose five per cent in premarket trading Wednesday. The shares had gained 23 per cent this year through Tuesday’s close, compared with Home Depot’s 31% advance.
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