Retail

How Lowe's Earnings Measure Up Against Home Depot

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Lowe’s Companies Inc. (NYSE: LOW) reported its most recent quarterly results early on Wednesday, and unfortunately they don’t stack up well against rival Home Depot Inc. (NYSE: HD), which reported earlier this week. 24/7 Wall St. has compared the earnings reports of each of these companies, as well as the investor reactions.

Lowe’s said that it had $1.22 in earnings per share (EPS) and $17.74 billion in revenue, while consensus estimates had called for $1.34 in EPS and revenue of $17.7 billion. The same period of last year reportedly had EPS of $1.19 on $17.36 billion in revenue.

During the first quarter, Lowe’s sales increased 2.2% year over year, and comparable sales increased 3.5%. Comparable sales for the U.S. home improvement business increased by 4.2%.

The company previously announced its intention to exit its Mexico retail operations and had planned to sell the operating business. However, in the first quarter, after an extensive market evaluation, the decision was made to sell the assets of the business instead. That decision resulted in an $82 million tax benefit in the quarter. The tax benefit offset $12 million of pretax operating costs for the Mexico retail operations in the quarter.

Looking ahead to the fiscal full year, Lowe’s expects to see EPS in the range of $5.45 to $5.65 and total sales increasing 2%. Consensus estimates call for $6.05 in EPS and $72.44 billion in revenue for the year.

Shares of Lowe’s were last seen Wednesday down about 10% at $99.82, in a 52-week range of $84.75 to $118.23. The consensus price target is $117.59.

As for Home Depot, the home improvement retailer posted $2.27 in EPS and $26.4 billion in revenue, while the consensus estimates had called for $2.19 in EPS and revenue of $26.39 billion. In the same period of last year, the big-box retailer said it had EPS of $2.08 and $24.95 billion in revenue.

For this quarter, comparable sales grew 2.5%, with comparable sales in the United States increasing 3.0%.

For the fiscal 2019 full year, the company expects to see EPS growth of 3.1% and revenues up by 3.3%, with comparable sales increasing 5.0%. The consensus estimates are $3.11 in EPS and $31.09 billion in revenue for the year.

Home Depot shares actually had a positive reaction to earnings, with the stock ending Tuesday up 0.3% at $191.45, in a 52-week range of $158.09 to $215.43.

Lowe’s is among the retailers closing the most stores while Home Depot is not. Yet, like its rival, Lowe’s has one of the highest paid chief executive officers.


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