Lowe's Cos. (LOW) Misses Q3 EPS by 1c, Revenues Beat; Offers 4Q EPS Mid-Point Guidance Below Consensus
Lowe's Cos. (NYSE: LOW) reported Q3 EPS of $1.98, $0.01 worse than the analyst estimate of $1.99. Revenue for the quarter came in at $22.3 billion versus the consensus estimate of $21.25 billion.
- U.S. Comparable Sales Increased 30.4%
- Diluted EPS of $0.91 which Includes $1.05 Negative Impact from Extinguishment of Debt
- Adjusted Diluted EPS of $1.98(1)
- Lowes.com Sales Increased 106%
- Company Invested over $1.1 Billion Year-to-Date to Support Associates, Store Safety and Communities in Response to COVID-19
"Strong execution enabled us to meet continued broad-based demand, as we delivered over 15% growth in all merchandising departments, over 20% growth across all geographic regions. and triple-digit growth online. We continued to invest in the future growth of the company, including a $100 million investment in the quarter as part of an ongoing effort to reset the layout of our U.S. stores, making them easier to shop with improved product adjacencies, especially for Pro customers. Our omni-channel transformation continued in the third quarter with further investments in Lowes.com and our supply chain. I remain confident that we are making the right strategic investments to deliver sustainable, long-term growth. I would also like to thank our outstanding frontline associates for their unwavering commitment to customer service and safety," commented Marvin R. Ellison, Lowe's president and CEO.
GUIDANCE:
Lowe's Cos. sees Q4 2020 EPS of $1.10-$1.20, versus the consensus of $1.16.
Fourth Quarter 2020 Financial Outlook (comparisons to fourth quarter 2019)
- Total and comparable sales growth of approximately 15 to 20 percent.
- Adjusted operating income as a percentage of sales (adjusted operating margin) is expected to be essentially flat to prior-year levels, given ongoing COVID-related operating expenses, $150 million expense related to the reset of the layout of our U.S. stores, and investments in expanding the supply chain network.2
- Effective income tax rate of approximately 27%.
- Expected repurchase of approximately $3.0 billion of stock.
- Diluted earnings per share and adjusted diluted earnings per share1 of $1.10 - $1.20.
For fiscal 2020, the Company expects capital expenditures of approximately $1.7 billion.
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