10:09 AM, Nov 20, 2019 — Lowe’s (LOW) on Wednesday raised its full-year earnings guidance as the home-improvement retailer posted fiscal third-quarter results that beat on earnings but missed on sales as it booked $53 million in charges relating to its Canadian business.
The Mooresville, NC-based company now expects adjusted per-share earnings between $5.63 and $5.70 for fiscal 2019, above its prior forecast for $5.45 to $5.65. The consensus compiled by Capital IQ is for $5.70.
For the quarter ended Nov. 1, adjusted earnings per share rose to $1.41 from $1.04 in the prior-year period and were ahead of the Street’s expectation for $1.35. Net sales slid to $17.39 billion from $17.42 billion. The Street’s view was for $17.68 billion.
Comparable-store sales rose 2.2%, below the Street’s expected 3.1% gain.
“We were pleased with the performance of our US home-improvement stores, which reflects a solid macroeconomic backdrop and continued progress in our transformation driven by investments in customer experience, improved merchandise category performance, and continued growth in our pro-business,” said Chief Executive Marvin Ellison.
Lowe’s said it booked $53 million in non-cash charges from its initiation of a strategic review of its Canadian operations. The company said the review has resulted in a leadership change for the business and it will close 34 underperforming stores in the country. It added that it will reorganize its Canadian corporate support structure to better serve the stores there and “rationalize the product assortment across the simplified Canadian store banners.”
“We are committed to the Canadian market and are taking decisive action to the performance and profitability of our Canadian operations,” Marvin said.
Wedbush Securities analyst Seth Basham said his firm looks “positively” on Lowe’s moves in Canada, adding that they will “have a modest favorable impact on continuing operations.”
Rival Home Depot (HJD) on Tuesday lowered its full-year guidance after its third-quarter results missed expectations due to the timing of certain benefits from that company’s strategic investments.
Companies: Lowe’s Companies, Inc.
Price: 119.94 Price Change: +6.54 Percent Change: +5.77