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Lowe’s Companies, Inc. reported its financial results for the third quarter of 2024, revealing a mixed performance. The company achieved a diluted earnings per share (EPS) of $2.99, slightly down from $3.06 in the same quarter last year. Adjusted diluted EPS, which excludes a $54 million pre-tax gain from the sale of its Canadian retail business, stood at $2.89. This adjustment reflects a more accurate picture of Lowe’s operational performance. Net earnings for the quarter were $1.7 billion, a decrease from $1.773 billion in the previous year.
Total sales for the quarter reached $20.2 billion, showing a slight decrease from $20.5 billion in the prior-year quarter. Comparable sales decreased by 1.1%, primarily due to a decline in DIY bigger-ticket discretionary demand. However, this was partially offset by increased sales in Pro and online, as well as storm-related sales following Hurricanes Helene and Milton. The company’s performance in smaller-ticket outdoor DIY projects also contributed positively.
Lowe’s capital allocation strategy remained robust, with the company repurchasing approximately 2.9 million shares for $758 million and paying $654 million in dividends during the quarter. The company’s disciplined focus on capital allocation underscores its commitment to generating long-term shareholder value. As of November 1, 2024, Lowe’s operated 1,747 stores, representing 195.0 million square feet of retail selling space.
Lowe Reports Double Beat in Third Quarter of 2024
Lowe’s third-quarter performance surpassed market expectations. Analysts had anticipated an EPS of $2.82, but the reported EPS of $2.99 exceeded these projections. Even the adjusted EPS of $2.89 was above the expected figure, indicating a stronger-than-anticipated operational performance. This outperformance was attributed to high-single-digit positive comps in Pro sales and robust online sales, which helped mitigate the decline in DIY bigger-ticket discretionary demand.
Revenue expectations for the quarter were set at $19.93 billion, but Lowe’s reported total sales of $20.2 billion, again surpassing forecasts. Despite the overall decline in comparable sales by 1.1%, the company’s ability to leverage storm-related sales and boost online and Pro sales provided a cushion against the downturn in other areas. This resilience in key segments highlights Lowe’s strategic positioning in the market.
CEO Marvin R. Ellison expressed optimism about the company’s performance, emphasizing the better-than-expected results even when excluding storm-related activity. Ellison’s remarks reflect confidence in Lowe’s ability to navigate challenging market conditions and capitalize on growth opportunities, such as the anticipated recovery in home improvement.
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Lowe’s Updates Full Year 2024 Outlook, Expects Total Sales Between $83B and $83.5B
Based on the third quarter results and anticipated demand in the fourth quarter, Lowe’s has updated its full-year 2024 outlook. The company now expects total sales to range between $83.0 billion and $83.5 billion, up from the previous guidance of $82.7 billion to $83.2 billion. This revision reflects a more optimistic view of the company’s sales trajectory, driven by factors such as modest storm-related demand and a recovery in key market segments.
Lowe’s also adjusted its expectations for comparable sales, projecting a decline of 3.0% to 3.5%, an improvement from the previous forecast of a 3.5% to 4.0% decline. Adjusted operating income as a percentage of sales is expected to be between 12.3% and 12.4%, slightly lower than the previous guidance of 12.4% to 12.5%. The company anticipates an adjusted diluted EPS of approximately $11.80 to $11.90, with capital expenditures remaining around $2 billion.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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