Lowe's Reports Higher Profit, Beating Estimates
August 21 2019 - 8:58AM
Dow Jones News
By Kimberly Chin
Lowe's Cos. reported higher earnings in its latest quarter that
topped expectations, in a sign the company's aggressive
cost-cutting strategy could be paying off.
The home-improvement retailer's earnings rose 10% in the second
quarter to $1.68 billion, or $2.14 a share. Analysts forecast
earnings of $2.03 a share, according to FactSet.
Shares of Lowe's climbed 12% in premarket trading.
The company took a $14 million pretax loss related to the wind
down of its Mexico retail operations. Excluding special items,
Lowe's said earnings were $2.15 a share, also ahead of analysts'
estimates.
The profit increase was largely due to a drop in expenses, which
fell 7.7% in the quarter.
Earlier this month, Lowe's said it would lay off thousands of
store workers as the company moves to outsourcing tasks such as
assembling barbecue grills and janitorial services. Lowe's employed
190,000 full-time and 110,000 part-time workers as of Feb. 1.
Since Chief Executive Marvin Ellison took the helm last summer,
he has called for vast improvements in the company's inventory,
customer service and work processes. The company is now stocking
more faster-selling items while reducing inventory of
lower-performing ones.
In recent years, Lowe's sales growth has lagged behind rival
Home Depot Inc. During the first quarter, Lowe's sales growth
outpaced Home Depot for the first time since 2016. In the latest
quarter, Lowe's said same-store sales in the U.S. rose 3.2%, ahead
of Home Depot, which reported U.S. same-store sales growth of
3.1%.
Overall same-store sales at Lowe's rose 2.3%, while Home Depot's
same-store sales were up 3%.
Net sales rose 0.5% to $20.99 billion from a year ago. Analysts
projected revenue of $20.93 billion.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
August 21, 2019 08:43 ET (12:43 GMT)
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