Lowe’s earnings, sales slide in Q2

Lowe’s Companies Inc. saw profits and sales decline year-over-year during the second quarter of fiscal 2023.

The home improvement giant reported net earnings of $2.7 billion, down 12% from $2.99 billion in the second quarter of fiscal 2022. Diluted earnings per share (EPS) of $4.56 were down from $4.67 in the year earlier period, but beat Wall Street expectations of $4.49.

Total sales for the quarter were $24.96 billion, down roughly 9% from $27.48 billion, narrowly missing analyst estimates of $24.99 billion. Same-store sales decreased 1.6%, with strong spring recovery and Pro and online sales growth partially offsetting lumber deflation and lower DIY discretionary demand.

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During the quarter, Lowe’s also debuted a couple of “shop-in-shop” concepts aimed at drawing specific customer segments into its brick-and-mortar stores in rural areas. These included a one-stop-shop concept designed to bring customers living in rural areas a wider offering of farm, ranch and outdoor products; as well as the expansion of a pilot program to open in-store Petco shops inside Lowe’s from 15 Lowe’s stores to nearly 300 locations by year-end, with a focus on rural communities.

"Our investments in our Total Home strategy continued to drive growth across Pro and online this quarter. And we are excited by our recent launch of same-day delivery nationwide and the expansion of our rural merchandising framework to roughly 300 stores," said Marvin R. Ellison, Lowe's chairman, president and CEO.  "Our ability to reduce expenses while improving customer service is the result of excellent execution by our team, and we remain confident in the mid- to long-term outlook for the home improvement industry.”

The company is affirming its outlook for the operating results of full year 2023 a 52-week year compared to the 53-week year of full year 2022:

• Total sales of approximately $87 – $89 billion.
• Same-store sales expected to be down -2% to -4% as compared to prior year
• Adjusted operating income as a percentage of sales (adjusted operating margin) of 13.4% to 13.6%.
• Interest expense of approximately $1.5 billion.
• Adjusted effective income tax rate of approximately 25%.
• Adjusted diluted earnings per share of $13.20 to $13.60.
• Capital expenditures of up to $2 billion

Based in Mooresville, N.C., Lowe's Companies Inc. operates over 1,700 home improvement stores and employs approximately 300,000 associates across the U.S.