Lowe's Cos. (LOW) Tops Q2 EPS by 15c, Revenues Beat, Comp. Sales Up 2.3%; Offers FY19 EPS Guidance
Lowe's Cos. (NYSE: LOW) reported Q2 EPS of $2.15, $0.15 better than the analyst estimate of $2.00. Revenue for the quarter came in at $20.99 billion versus the consensus estimate of $20.94 billion.
- Excluding $14 million of pre-tax operating losses associated with the wind-down of the Company's Mexico retail operations
- Adjusted diluted earnings per share1 increased 3.9 percent to $2.15 from adjusted diluted earnings per share1 of $2.07 in the second quarter of 2018.
- Sales for the second quarter increased 0.5 percent to $21.0 billion from $20.9 billion in the second quarter of 2018.
- Comparable sales increased 2.3 percent.
- Comparable sales for the U.S. home improvement business increased 3.2 percent.
"We capitalized on spring demand, strong holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results. Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S. This is a reflection of a solid macroeconomic backdrop and continued momentum executing our retail fundamentals framework," commented Marvin R. Ellison, Lowe's president and CEO.
"Our transformation is ongoing, and our future is bright. We are confident that we are on the right path to capitalize on solid demand in a healthy home improvement market and generate long-term profitable growth. I would like to thank our associates for their hard work and continued commitment to serving customers," added Ellison.
GUIDANCE:
Lowe's Cos. sees FY2019 EPS of $5.45-$5.65, versus the consensus of $5.57.
Fiscal Year 2019 (comparisons to fiscal year 2018)
- Total sales are expected to increase approximately 2 percent.
- Comparable sales are expected to increase approximately 3 percent.
- Operating income as a percentage of sales (operating margin) is expected to increase 310 to 340 basis points.
- Adjusted operating income as a percentage of sales (adjusted operating margin) is expected to increase 20 to 50 basis points.
- The effective income tax rate is expected to be approximately 24%.
- The target leverage ratio is 2.75x, therefore the company expects to repurchase approximately $4 billion of stock.
- Diluted earnings per share of $5.54 to $5.74 are expected for the fiscal year ending Jan. 31, 2020.
- Adjusted diluted earnings per share1 of $5.45 to $5.65 are expected for the fiscal year ending Jan. 31, 2020.
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