Lowe’s revenue jumps 30% in the fiscal second quarter

Lowe’s Companies Inc. (NYSE: LOW) published its quarterly financial results on Wednesday that came in stronger than what the analysts had anticipated. The company attributed its hawkish performance to the Coronavirus pandemic that restricted people to their homes. Consequently, home improvement projects were very much in trend in recent months.

Shares of the company opened less than 2% up on Wednesday. But the stock lost the entire gain later in the day. At the time of writing, the £91.47 billion company that has a price to earnings ratio of 26.80 is more than 30% up year to date in the stock market.

Lowe’s Q2 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £18.51 billion in revenue in the fiscal second quarter. Their estimate for earnings per share (EPS) was capped at £2.25. In its report on Wednesday, Lowe’s topped both estimates posting a higher £20.83 billion of revenue and £2.86 of adjusted earnings per share.

In terms of same-store sales, the home improvement retailer registered a 35.1% growth in Q2 versus 16.3% expected. Lowe’s said its profits came in at £2.16 billion in the recent quarter that represents a 68.7% increase on a year over year basis. The massive increase in profit was even more surprising considering its operational costs surged to £351 million in Q2.  

Lowe’s earnings report on Wednesday also highlighted an over 20% growth in comparable-store sales in all of its merchandising divisions. All U.S. regions, the retailer said, posted a same-store sales growth of more than 30%. It’s peer, Kohl’s, also said on Tuesday that it topped analysts’ estimates for earnings and revenue in its Q2.

Lowe’s to pay £81.63 million of quarterly bonus

Lowe’s also highlighted on Wednesday that it will pay £81.63 million of quarterly bonus that marks its highest in history. On a year over year basis, Lowe’s sales saw a 30% growth in the second quarter. Lowe’s said earlier in August that it will offer $20K grants to small businesses.

Owing to the health crisis, the Mooresville-based company revealed an unprecedented 135% increase in its digital sales in the recent quarter. Lowe’s, however, decided in favour of keeping its guidance for the full-year suspended due to the Coronavirus uncertainty that it acknowledged was still very real.

Being an essential retailer, Lowe’s remained open for the public throughout the virus-driven lockdowns. Its sales, as per CEO Marvin Ellison, was showing resilience in the fiscal third quarter to date as well.