Why Lowe’s Q1 Earnings Fell Short

By Chris Lange Updated Jan 12, 11:43AM EST · Published May 24, 9:05AM EDT

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Why Lowe’s Q1 Earnings Fell Short — © Thinkstock

Lowe’s Companies Inc. (NYSE: LOW) released its fiscal first-quarter financial results before the markets opened on Wednesday. The $1.03 in earnings per share (EPS) and $16.86 billion in revenue home improvement retailer posted compares with consensus estimates from Thomson Reuters of for $1.06 in EPS and $16.96 billion in revenue. The same period of last year reportedly had EPS of $0.87 and revenue of $15.23 billion.

During this quarter, same-store sales rose by only 2%, which fell short of analyst estimates of 3.1%.

In terms of the outlook for the 2017 fiscal year, the company expects to see total sales up roughly 5.0%, comparable sales up 3.5%, and EPS of approximately $4.30. The consensus estimates are $4.64 in EPS and $68.31 billion in revenue in the current quarter.

In the fiscal first quarter, Lowe’s repurchased $1.2 billion of stock under its share repurchase program and paid $304 million in dividends.

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At the same time, Lowe’s operated 2,137 home improvement and hardware stores in the United States, Canada and Mexico.

On the books, Lowe’s cash, cash equivalents and short-term investments totaled $2.05 billion at the end of the quarter, compared with $4.74 billion at the end of the same period of last year.

Robert A. Niblock, Lowe’s board chair, president and chief executive, commented:

A solid macroeconomic backdrop, combined with our project expertise, drove above average performance in indoor projects. We also continued to advance our sales to Pro customers, delivering another quarter of comparable sales growth well above the company average.

Shares of Lowes closed Tuesday down 2% at $82.34, with a consensus analyst price target of $89.27 and a 52-week trading range of $64.87 to $86.25. Following the release of the earnings report, the stock was down an additional 3.7% at $79.30 in early trading indications Wednesday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.