Lowe’s Q1 Results Show Dip in Earnings and Sales, But Optimism Remains for Total Home Strategy
Lowe’s Companies, Inc. (LOW) is set to release its first quarter results on May 23, with earnings expected to be at $3.49 per share, a slight dip from the prior year’s quarter. Sales are projected to decrease by 8% to $21.65 billion. Despite the dip in earnings, the company is expected to rebound and see a 9% jump in fiscal year 2025 at $14.91 per share. On the top line, sales are forecasted to drop by 9% in FY24 before stabilizing and rising by 2% in FY25 to $90.58 billion.
However, Lowe’s shares slid in premarket action on May 23 due to a tempered outlook for FY23 total sales ranging from $87 billion to $89 billion instead of the previous forecast of $88 billion to $90 billion. Comparable sales are expected to decrease between 2% and 4%, and the company has reduced its projected adjusted diluted earnings per share from $13.60 to $14.00 to a range of $13.20 to $13.60.
Lowe’s Chairman, President, and CEO Marvin R. Ellison commented on the Q1 results, stating, “We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather. Although we delivered positive comparable sales in Pro and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases.”
Despite the tempered outlook, Lowe’s has remained optimistic about the medium-to-long-term outlook for home improvement and its ability to continue growing market share through its Total Home strategy. The company plans to invest $2 billion in capital expenditures in 2023.
Lowe’s has been underperforming the broader market in 2023, with its stock price rising by only 2.65% compared to the S&P 500’s total return of 7%. However, analysts have given the company a consensus rating of “Hold” and a consensus target price of $223.08.
Overall, Lowe’s is expected to see a rebound in earnings and sales in the coming years, despite a dip in Q1 results and tempered outlook for FY23. The company remains optimistic about its Total Home strategy and its ability to grow market share in the home improvement industry.
0. “LOWE’S REPORTS FIRST QUARTER 2023 SALES AND EARNINGS RESULTS” PR Newswire, 23 May. 2023, https://www.prnewswire.com/news-releases/lowes-reports-first-quarter-2023-sales-and-earnings-results-301831544.html