Lowe's Q4 results: shares up 2% after earnings revenue misses estimates

Lowe's stock is up despite missing Wall Street's earnings estimates.

Trader data after Lowe's Q4 results Source: Bloomberg

Lowe’s stock is up despite a mixed Q4 earnings report. Lowe’s Q4 results fell below Wall Street expectations.

Lowe’s earnings: key figures

Earnings per share (EPS) $0.80
Revenue $15.65 billion
Net income $554 million
Same store sales +2.4 %

Lowe's earnings

Lowe’s Q4 earnings per shares (EPS) were $0.80, slightly better than expectations. Lowe’s Q4 revenue was $15.65 billion, surpassing its total from 2018. However, it was still lower than financial experts’ estimates of $15.74 billion.

The corporation’s chief executive officer, (CEO), Marvin Ellison, blames Lowe’s diminished revenue on bad weather and a decline in the US and Canadian housing markets. Q4 results were mixed, there was positive news with the company’s sales. The retailer’s same store sales increased by 2.4% and stores open for a year saw purchases jump by 1.7%.

What do Lowe’s Q4 results mean for its share price?

Lowe’s Q4 results mean an increase in its share price. Lowe’s share price has increased despite a mixed earnings report because of encouraging Q1 guidance from the retailer, strong same store sales, and revenue catching up to its competitor, Home Depot.

How do Lowe’s Q4 results compare to other home improvement retailers?

Lowe’s Q4 results were better than Home Depot's earnings. Lowe’s EPS and revenue were high, even if they fell beneath Wall Street expectations. Home Depot’s EPS and revenue dropped farther than Lowe’s and beneath financial experts’ predictions.

While Home Depot focuses more on consumers’ home construction work, Lowe’s sales improved from customers buying products for a wider range of small home improvement projects.

What is Lowe’s dividend forecast?

Lowe’s dividend forecast is optimistic, with the corporation projecting 2019 earnings per share between $6 and $6.10. The retailer predicts total store sales to rise by 2% and same store purchases to increase by 3%.

Ellison predicted that despite the Canadian housing market slowdown, he thought the stores would improve its sales over a longer period.

‘We anticipate continued weakness in the Canadian housing market in the near-term, but remain confident in our market position in Canada and the long-term potential of that business,’ said Ellison.

Ellison also had an upbeat outlook for Q1 results in the US.

‘We are encouraged by an improved comparable sales progression through the fourth quarter, culminating in U.S. home improvement comp growth of 5.8% in January,' said Ellison.

'Though we have remaining work to do, we are pleased with the results we are seeing in early spring categories, which is evidence that we are focused on the right actions at this stage of our transformation,’ added Ellison.

Home improvement retailers like Lowe’s are struggling to increase revenue despite a downturn in the US housing market. While Lowe stock is rising, investors will be watching to see if Lowe’s Q4 results will have a long-term positive effect on its share price.


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