Lowe’s Companies (LOW) – Get Free Report posted better-than-expected third quarter earnings Tuesday, but trimmed its full-year profit forecast while echoing Home Depot’s (HD) – Get Free Report warning that consumers are spending less on big-ticket items heading into the holiday season.
Lowe’s said adjusted earnings for the three months ending in October were pegged at $3.07 per share, down 6.1% from the same period last year but just ahead of the Street consensus forecast of $3.03 per share.
Group revenues, Lowe’s said, fell 12.8% to $20.47 billion, missing analysts’ estimates of a $20.89 billion tally. U.S. same-store sales fell 7.4%, compared to the Refinitiv forecast of a 5% decline.
Looking into the final months Lowe’s financial year, which ends in January, Lowe’s said it sees overall revenues of $86 billion, down from its prior forecast of between $87 billion and $89 billion.
Same-store sales are likely to fall by around 5%, compared to its prior forecast of a 2% to 4% decline, while earnings are expected to come in at $13 per share, down from its last forecast of between $13.20 to $13.60 per share.
“In the third quarter, the company delivered strong operating performance and improved customer service despite a greater-than-expected pullback in DIY discretionary spending, particularly in bigger ticket categories,” said CEO Marvin Ellison.
“As we look ahead, Lowe’s is committed to offering value and convenience this holiday season, helping our customers save time and money,” he added. “I’d like to extend my appreciation to our hardworking front-line associates who continue to elevate the customer experience.”
Lowe’s shares were marked 6.1% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $192.00 each.
Last, larger home improvement retailer Home Depot topped Street earnings forecast with a bottom line of $3.81 per share on revenues of $37.71 billion, but narrowed its full-year profit forecast as consumers pulled back spending higher-priced items and projects.
Big-ticket sales, defined as those of more than $1,000, were down 5.2% from a year earlier, Home Depot said, led by declines in flooring, countertops and cabinets.
Looking into the 2023 fiscal year, which ends in January, Home Depot said earnings would likely decline between 9% and 11%, compared with its prior forecast of a decline of between 7% and 13%. Comparable sales are seen down between 3% and 4%.
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