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Lowe’s Companies, Inc. (LOW - Free Report) posted solid third-quarter fiscal 2022 results, with both the top and the bottom line beating the Zacks Consensus Estimate. Also, both metrics improved from the previous fiscal year’s quarterly readings.
Results benefited from higher comparable sales (comps) and Pro sales as well as improved DIY sales trends. Sales on Lowes.com grew 12% compared with 25% growth seen last year. Also, LOW witnessed a substantial improvement in adjusted operating margin on the back of disciplined execution and cost management.
This presently Zacks Rank #3 (Hold) player’s shares have gained 5.1% in the past three months against the industry’s 9.6% decline.
Quarter in Detail
Earnings per share (EPS) of $3.27 surpassed the Zacks Consensus Estimate of $3.11 and rose 19.8% from the third-quarter fiscal 2021 tally.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Net sales of $23,479 million increased 2.4% year over year and exceeded the Zacks Consensus Estimate of $23,150 million. Comps inched up 2.2% in the quarter under review. 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 inched 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.
Other Financial Aspects
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. For fiscal 2022, LOW expects a capex of up to $2 billion.
In the reported 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.
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.
Outlook
Management updated guidance for fiscal 2022. LOW expects revenues of $97-98 billion (including the 53rd week). The 53rd week is likely to witness a sales increase by $1-$1.5 billion. In fiscal 2021, Lowe’s revenues amounted to $96.3 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.
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 40.5% and 76.4%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
GMS, a distributor of wallboard and suspended ceiling systems, currently flaunts a Zacks Rank of 1. GMS has a trailing four-quarter earnings surprise of 10.8%, on average.
The Zacks Consensus Estimate for GMS’ current financial-year sales and EPS suggests growth of 10.8% and 10.2%, respectively, from the comparable year-ago reported figures. GMS has an expected EPS growth rate of 10.7% for three-five years.
Wingstop, which franchises and operates restaurants, currently sports a Zacks Rank of 1. WING has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.3% and 22.2%, respectively, from the corresponding year-ago reported numbers. WING has an expected EPS growth rate of 11% for three-five years.
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Lowe's (LOW) Q3 Earnings Beat Estimates, Sales Rise Y/Y
Lowe’s Companies, Inc. (LOW - Free Report) posted solid third-quarter fiscal 2022 results, with both the top and the bottom line beating the Zacks Consensus Estimate. Also, both metrics improved from the previous fiscal year’s quarterly readings.
Results benefited from higher comparable sales (comps) and Pro sales as well as improved DIY sales trends. Sales on Lowes.com grew 12% compared with 25% growth seen last year. Also, LOW witnessed a substantial improvement in adjusted operating margin on the back of disciplined execution and cost management.
This presently Zacks Rank #3 (Hold) player’s shares have gained 5.1% in the past three months against the industry’s 9.6% decline.
Quarter in Detail
Earnings per share (EPS) of $3.27 surpassed the Zacks Consensus Estimate of $3.11 and rose 19.8% from the third-quarter fiscal 2021 tally.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote
Net sales of $23,479 million increased 2.4% year over year and exceeded the Zacks Consensus Estimate of $23,150 million. Comps inched up 2.2% in the quarter under review. 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 inched 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.
Other Financial Aspects
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. For fiscal 2022, LOW expects a capex of up to $2 billion.
In the reported 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.
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.
Outlook
Management updated guidance for fiscal 2022. LOW expects revenues of $97-98 billion (including the 53rd week). The 53rd week is likely to witness a sales increase by $1-$1.5 billion. In fiscal 2021, Lowe’s revenues amounted to $96.3 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.
3 Top Retail Stocks for You
We highlighted three better-ranked stocks, namely Tecnoglass (TGLS - Free Report) , GMS (GMS - Free Report) and Wingstop (WING - Free Report) .
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 40.5% and 76.4%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
GMS, a distributor of wallboard and suspended ceiling systems, currently flaunts a Zacks Rank of 1. GMS has a trailing four-quarter earnings surprise of 10.8%, on average.
The Zacks Consensus Estimate for GMS’ current financial-year sales and EPS suggests growth of 10.8% and 10.2%, respectively, from the comparable year-ago reported figures. GMS has an expected EPS growth rate of 10.7% for three-five years.
Wingstop, which franchises and operates restaurants, currently sports a Zacks Rank of 1. WING has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.3% and 22.2%, respectively, from the corresponding year-ago reported numbers. WING has an expected EPS growth rate of 11% for three-five years.