Lowe’s Cos. topped Wall Street estimates for its fourth quarter and pointed to adjustments it is making to adjust to the current economic and consumer spending environment as it prepares for the important spring shopping season for DIY retailers.
Net earnings for the quarter were $1.02 billion, or $1.77 per diluted share, versus $957 million, or $1.58 per diluted share, in the year-prior quarter, the company reported. Adjusted diluted earnings per share were $2.28 in the year-earlier period. Lowe’s made no adjustments in the latest completed fourth quarter.
For the quarter, Lowe’s beat a Yahoo Finance-published analyst consensus estimate of $1.68 per diluted share and $18.45 billion in total revenue.
Comparable sales declined 6.2% because of a slowdown in do-it-yourself customer demand and unfavorable January winter weather, the company noted. The Pro customer component of the total comp was flat year over year.
Net sales were $18.6 billion versus $22.45 billion in the year-previous quarter. They were impacted by an extra week in the year-pas period as well as the sale of the company’s Canadian business. Operating income was $1.69 billion versus $1.7 billion in the year-before period.
For the full fiscal year, net earnings were $7.73 billion, or $13.20 per diluted share, versus $6.44 billion, or $10.17 per diluted share, in the year prior, Lowe’s stated.
Net sales were $86.38 billion versus $97.06 billion in the year previous. Operating income was $11.56 billion versus $10.16 billion in the year before.
In a conference call, Marvin Ellison, Lowe’s chairman, president and CEO, said November and December DIY trends improved from the third quarter, followed by a sharp drop in traffic during periods of extreme weather in January. Macroeconomic factors such as persistent inflation and a stagnant housing market continue to make DIY customers hesitant to spend on big-ticket purchases for their homes, Ellison said. Those who engaged in home improvement activities took on smaller non-discretionary projects with a heightened focus on value. In the fourth quarter, Lowe’s adapted to changing consumer behaviors, resulting in record Black Friday and Cyber Monday online sales and improved holiday sell-through and margins, he added.
Lowe’s now is focusing on winning the biggest season for home center retailers: spring. Ellison maintained Lowe’s is excited to see how the customer responds to its more targeted, traffic-driving marketing strategy and a product lineup set to provide value.
In announcing the fourth quarter results, Ellison said, “This quarter, we delivered strong operating profit and improved customer satisfaction despite the continued pullback in DIY spending. We remain confident in the long-term strength of the home improvement market, and we are making the right investments in our Total Home strategy to take share. We are also pleased to award $140 million in discretionary bonuses to our frontline associates in recognition of their exceptional customer service in 2023.”
