A Lowe shop is on February 27, 2024 in New York City in Brooklyn.
Spencer Platt | Getty pictures
Lowe's The quarterly profit and sales expectations of Wall Street on Wednesday and said that his drop in sales should end in the coming year.
The retailer for the handyman said that the total turnover of the year will be $ 83.5 billion and $ 84.5 billion, which would be higher at the top than the total turnover of $ 83.67 billion for the 2024 financial year. It was expected that a comparable turnover was 1% in the previous year in the previous year.
With regard to the company's profit call, CEO Marvin Ellison emphasized that Lowe is still exposed to “a challenging market for the home improvement”.
He said that high mortgage interest rates had “created a significant gap between today's interest rates for home buyers and the lower interest rates that many homeowners are currently enjoying.” This has led to a “lock-in effect” that has held consumers from buying and selling, he said.
Nevertheless, he said, Lowe's investment in his own strategy advanced, e.g.
Here is what the company has reported for the fourth quarter of the financial year compared to the expectation of Wall Street, based on a survey of LSEG analysts:
- Win each share: $ 1.93 adapted compared to USD 1.84
- Revenue: $ 18.55 billion expected compared to $ 18.29 billion
Lowe's shares rose by almost 2%on Wednesday after the company's managers announced that sales trends improve, but still about flat compared to the previous year.
In the three-month period, which ended on January 31, the net profit of Lowe was $ 1.13 billion or $ 1.99 per share compared to $ 1.02 billion or $ 1.77 per share in the previous year. The turnover fell in the year $ 18.60 billion.
The adjusted result per share of Lowe concluded an input tax of $ 80 million in connection with the sale of its Canadian retail business of 2022, which entered the fourth quarter.
Investors are looking for signs that the market for do -it -yourselfers is resuming. Slow residential turnover and higher credit costs have kept some customers on the edge. Lowe's net turnover for the 2024 financial year was $ 83.67 billion, which is 3% due to the previous financial year.
Trends looked better in the fourth quarter of the financial year. The comparable sales rose by 0.2%and were increased by online profits, a high single-digit growth of house information and sales in connection with the reconstruction of efforts to Hurricanes Milton and Helene. This slightly positive metric ended eight consecutive quarters of comparable sales declines. It also exceeded the expectations of Wall Street. Analysts had expected a decline in comparable sales by 1.8%.
A hard real estate market
Nevertheless, the leaders of Lowe said they had seen no changes in the apartment stand. Ellison said about the profit call that the company was pursuing two factors that would indicate a return to more typical expenses for improving the home: an increase in expenses for do-it-yourself for more expensive goods and more service expenditure, e.g.
According to CFO Brandon Sink, the retailer is expecting an “approximately flat” market improvement market this year, whereby sales from home members exceed customers through the do-it-yourself self-self due to repair and maintenance projects.
Lowes competitor, Home DepotBattled on Tuesday in the fourth quarter of Wall Street and won a defeat of eight consecutive quarter with a comparable turnover.
But Richard McPhail, CFO from Home Depot, does not expect the company to change the real estate market or mortgage interest. Instead, he said CNBC that he believes that consumers are gradually getting used to increased rates as “new normality”.
Ellison repeated these feelings on a call with CNBC and said that he expects homeowners and potential buyers to use a point if they accept the higher prices and decide to modernize the kitchen, end the basement or build the deck anyway.
“I can't give you the date, the time, but we think we will see, and if this is the case, we are in the perfect position to benefit from it,” he said.
How Lowe tries to increase sales
Against this background, Lowe's tried to move the needle by investing in his online business, attracting more sales from contractors, electricians and other professionals and expanding value-oriented offers for homeowners.
The turnover of large devices, a category that was often from purchases according to the old article or breaks, grew in the quarter compared to the same period last year, said Bill Boltz, Executive Vice President of Merchandising, about the company's profit call. He said Lowe's has doubled the number of deliveries the next day in recent years and can deliver and install large devices in almost every US mail code the next day.
The online turnover rose by 9.6%compared to the previous year, since customer traffic, especially on Black Friday and Cyber Monday, increased.
As a customer, Lowe's has introduced a new private brand called Lowe's Essentials with products that cost 10 US dollars or less, e.g. These elements are exhibited near the front of the shops.
Lowe's launched a loyalty program for DIY customers last year. So far, it has attracted 30 million members and the non -members exceeded almost 50%, said Boltz on the winning call.
“It is clear that these customers see the value in this free program that now gives them even more incentives to choose Lowe,” said Boltz.
During the Key spring sales season, Lowe will offer exclusive offers and doorbuster for these members, he said.
Professionals were also a growth area for Lowe, especially because it had a lot of space for improvements, Ellison told CNBC. He described it as “one of the most broken parts” by Lowes business when he started as a CEO in 2018.
The company has hired the committed personnel for professionals, adjusted their inventory in such a way that the right product mix is equipped, and the website improves so that professionals can easily give up orders of articles that they buy frequently.
Nevertheless, Lowe's pro business is smaller than that of Home Depot. The sales of do-it-yourself customers make around 70% of Lowe's sales. In Home Depot, pro -sale per sale of around half of the company's sales and growth -especially after the purchase of SRS sales, a company that sells stocks to experts in the shops in the shops.
Ellison told CNBC that Lowe's was waiting to use the full advantages of changes that it did in his business.
“We fixed our pro business,” he said. “We repaired our online business. We repaired our household business. We have dramatically improved our supply chain. The only thing that has not happened to us is that we haven't had a healthy DIY owner since I was informed.”
Lowe's shares closed $ 247.07 on Wednesday. Until the end of Wednesday, the company's shares have increased by less than 1% this year. This corresponds to almost the 1% growth of the S&P 500 in the same period.
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