Lowe’s Companies Inc (NYSE:LOW) raises the outlook

Lowe’s Companies Inc (NYSE:LOW) stock fell 3.59% (As on November 17, 11:26:34 AM UTC-4, Source: Google Finance) though the company reported better than expected results and raised its full year outlook. Same store sales rose 2.2%. Comparable sales for the U.S. home-improvement business rose 3% in the reported quarter. Pro-customer sales jumped 19%, recording the 10th consecutive quarter of a double-digit increase. Gross profit rose up 3% year over year to $7,818 million, while gross margin expanded 20 basis points (bps) to 33.3%. Operating income amounted to $4,229 million, up 0.5% year over year. Operating margin significantly contracted to 3.93% from 12.17% recorded in the year-earlier quarter. LOW ended the quarter with cash and cash equivalents of $3,192 million, long-term debt (excluding current maturities) of $32,904 million and shareholders’ deficit of $12,868 million. Lowe’s generated cash flow from operations of $8,138 million for the nine months ended Oct 28, 2022. Capital expenditures amounted to $1,090 million. As of Oct 28, 2022, Lowe’s operated 1,969 home-improvement and hardware stores across the United States and Canada. LOW serviced nearly 212 dealer-owned stores.

LOW in the third quarter of FY 22 has reported the adjusted earnings per share of $3.27, beating the analysts’ estimates for the adjusted earnings per share of $3.11, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 2.4 percent to $23.5 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $23.2 billion.

Additionally, in the quarter Lowe’s bought back 20.5 million shares for $4 billion and paid out dividends of $666 million. LOW expects to repurchase nearly $13 billion of shares in fiscal 2022 compared with the earlier projection of $12 billion.

For fiscal 2022, LOW expects a capex of up to $2 billion and it foresees full year sales between $97 billion and $98 billion. The 53rd week is likely to witness a sales increase by $1-$1.5 billion. Comparable sales in fiscal 2022 are envisioned in the range of flat to a 1% fall from the previous fiscal year’s reported figure. Lowe’s continues to expect the gross margin rate to improve slightly from the last fiscal year’s level. The adjusted operating margin is expected to be 13%. Management anticipates earnings per share of $13.65-$13.80 for the current fiscal year compared with the earlier projected range of $13.10-$13.60.

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