FILE PHOTO: A view of the sign outside the Lowes store in Westminster, Colorado February 26, 2014. REUTERS/Rick Wilking
February 23, 2022
(Reuters) -U.S. home improvement chain Lowe’s Cos Inc lifted its full-year sales and profit forecast on Wednesday, as home improvement retailers benefit from resilient demand for tools and building materials.
Lowe’s shares, which fell nearly 4% on Tuesday following the profit margin warning from larger rival Home Depot, rose 2.6% in premarket trading.
The surge in spending on do-it-yourself home projects seen during the early stages of the pandemic has so far held up better than feared even as restrictions ease, while builders and handymen are upgrading their toolkits to complete a backlog of delayed projects.
Lowe’s same-store sales rose 5% in the fourth quarter ended Jan. 28, compared to analysts’ estimates of a 3.1% increase, according to IBES data from Refinitiv. In comparison, Home Depot reported an 8.1% rise in same-store sales on Tuesday.
Lowe’s also said it expects its annual gross profit margins to be up slightly from last year, a more optimistic forecast than its outlook in December when it forecast 2022 margins to be roughly flat.
Margins are at top of investors’ mind this earnings season as runaway inflation and labor costs threaten to dent Corporate America’s profits.
Home Depot on Tuesday indicated that it expects gross profit margins to remain under pressure through the year.
Lowe’s said it expects fiscal year 2022 total sales of $97 billion to $99 billion, compared to a previous forecast of $94 billion to $97 billion.
The company forecast full-year earnings per share of $13.10 to $13.60, above its previous outlook of $12.25 to $13.
(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)
Source: One America News Network
