Lowe's Q2 Profit Misses View, But Sales Top; Reaffirms 2015 Outlook

(RTTNews) - Home improvement retailer Lowe's Companies Inc. (LOW) reported Wednesday a profit for the second quarter that grew eight percent from last year, reflecting lower expenses and sales growth. Comparable store sales grew 4.3 percent.

Earnings per share missed analysts' expectations, while quarterly sales topped their estimates by a whisker. The company also reaffirmed earnings and sales growth guidance for the full-year 2015.

"We posted solid results for the quarter and were able to capitalize on big-ticket market share opportunities with strong growth in categories like appliances and outdoor power equipment," Chairman, President and CEO Robert Niblock said.

The Mooresville, North California-based nation's No. 2 home improvement chain reported net earnings of $1.13 billion or $1.20 per share for the second quarter, higher than $1.04 billion or $1.04 per share in the year-ago quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to post earnings of $1.24 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 4.5 percent to $17.35 billion from $16.60 billion in the same quarter last year, and topped twenty-four Wall Street analysts' consensus estimate of $17.27 billion by a whisker.

Comparable store sales for the quarter improved 4.3 percent, with comparable sales for the U.S. business increasing 4.6 percent.

Gross margin for the quarter contracted to 34.47 percent from last year's 34.55 percent, while total expenses, as a percentage of total sales, decreased to 23.87 percent from 24.35 percent a year ago.

As at the end of the second quarter, Lowe's operated 1,846 home improvement and hardware stores in the U.S., Canada and Mexico representing 201.4 million square feet of retail selling space.

"Our year-to-date earnings per share performance was in line with our expectations. This, together with the execution of our strategic priorities, gives us confidence in our Business Outlook for 2015," Niblock added.

Looking ahead to fiscal 2015, Lowe's continues to expect earnings of about $3.29 per share on projected total sales growth of 4.5 to 5 percent and comparable store sales growth of 4 to 4.5 percent. The Street is currently looking for full-year 2015 earnings of $3.28 per share on annual sales growth of 4.6 percent to $58.79 billion.

The company also said it expects to add 15 to 20 home improvement and hardware stores in fiscal 2015.

LOW closed Tuesday's regular trading session at $73.02, down $0.15 on a volume of 10.77 million shares. In the past 52-week period, the stock has been trading in a range of $49.70 to $76.25.