Lowe’s gives dovish guidance for fiscal 2020 following weaker sales in Q4

Lowe’s announced its quarterly performance results on Wednesday that missed the analysts’ estimate for sales. The American retail company also gave its guidance for fiscal 2020 that also fell short of the expectations.

Despite the mixed results, share prices didn’t take offense and were reported trading 1.4% higher in premarket trading. The gain, however, was lost later in the week with Lowe’s closing at $113.30 on Friday that marks an over 10% decline in 2020 so far. But the retailer performed fairly upbeat in the stock market in 2019 with an annual gain of around 30%.

Lowe’s Q4 Financial Results Versus Analysts’ Estimates

According to Refinitiv, analysts had anticipated the company to print $16.15 billion in revenue in the fourth quarter. In terms of earnings, their estimate was capped at 91 cents per share. Experts had also expected a 3.6% increase in Lowe’s same-store sales in the recent quarter. In its report on Wednesday, Lowe’s highlighted to have generated a lower $16.03 billion in revenue in Q4 while it claimed to have made a slightly higher 94 cents of earnings per share. In the fourth quarter, Lowe’s announced its same-store sales to have seen a 2.5% increase. Lowe’s had printed $15.65 billion in revenue in 2018’s fourth quarter.

Lowe’s net income in the recent quarter was accentuated at $509 million that came out lower than $824 million that was noted in the same quarter last year.

In its guidance for fiscal 2020, Lowe’s said that it now expects a 2.5% to 3% increase in overall sales while a greater 3% to 3.5% gain in same-store sales. The company also estimated its 2020 earnings at $6.45 to $6.65 per share (adjusted). Analysts, on the other hand, have forecast Lowe’s EPS (earnings per share) at $6.34 to $6.92 in fiscal 2020.

Lowe’s Is Committed To Broadening Its Portfolio And E-Commerce Unit

Lowe’s brought Marvin Ellison on board as the new CEO in 2018. Under Marvin’s leadership, the home improvement retailer is committed to enhancing its business for which it wishes to broaden its portfolio with professional contractors and homebuilders and expand its e-commerce unit. Being the leading name in U.S appliance retailers, Lowe’s is also focused on capitalizing on its strengths and make appliance deliveries more efficient.

CEO Ellison commented on the Q4 earnings report on Wednesday and stated that the company’s recovery so far has been appreciable, but there is still a lot of ground to cover.