A Lowe’s employee walks through the store during the grand opening of the Lowe’s store in San Francisco, California.
Lowe’s reported Wednesday quarterly earnings that beat analysts’ expectations and raised its forecast for the year. However, revenue during the quarter fell short of expectations.
Shares of Lowe’s were up about 5% in premarket trading.
Here’s what Lowe’s reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.41, adjusted, vs. $1.35 expected
- Revenue: $17.39 billion vs. $17.68 billion expected
- Same-store sales growth: 2.2% vs. 3.1% expected
Lowe’s now expects to earn between $5.63 and $5.70 per share, on an adjusted basis, compared with a prior estimate of $5.67 per share.
Since Lowe’s CEO Marvin Ellison arrived in July 2018, he has focused his attention on professional contractors, or pro customers. In the second quarter, Lowe’s credited its ability to grow U.S. same-store sales at a faster pace than its competitor Home Depot to these efforts. Lowe’s said it added 35,000 new pro customers last quarter.
Home Depot, however, has always had its stronghold in the professional space. About 45% of Home Depot’s business comes from its professional customers, according to Jonathan Matuszewski, an analyst at Jefferies. By comparison, Lowe’s gets about 20% to 25% of its sales from this group, he said Tuesday.
The Atlanta-based company said Tuesday that it is in the process of improving its B2B website, which was created mostly for the company’s pro customers. The site still requires underlying technical work before the company can move forward with additional elements.
Lowe’s closed down 1.4% Tuesday on the back of Home Depot’s quarterly report. Shares of Lowe’s were up more than 22% year to date at market close on Tuesday. The stock has a market value of $87.5 billion.
Meanwhile, Home Depot shares closed down 5.4% on Tuesday, putting its market value at $247.4 billion. In the year-to-date period, its shares have risen 32%.
This story is developing. Please check back for updates.