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Lowe’s Companies, Inc. (LOW - Free Report) posted mixed fourth-quarter fiscal 2022 results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. Also, both metrics improved from the previous fiscal year’s quarterly readings.
This presently Zacks Rank #3 (Hold) player’s shares have increased 5.2% in the past six months compared to the industry’s 4.2% gain.
Quarter in Detail
Earnings per share (EPS) of $2.28 surpassed the Zacks Consensus Estimate of $2.21 and rose 28% from the fourth-quarter fiscal 2021 tally.
Image Source: Zacks Investment Research
Net sales of $22,445 million increased 5.2% year over year but missed the Zacks Consensus Estimate of $22,702 million. Comparable sales (comps) inched down 1.5% in the quarter under review. Comparable sales for the U.S. home-improvement business dipped 0.7% in the reported quarter. Pro-customer sales jumped 10%, recording the 11th consecutive quarter of a double-digit increase. Lowes.com sales climbed 5%.
The fiscal fourth quarter had 14 weeks, compared with 13 weeks in the prior-year quarter. The 14th week contributed roughly $1.4 billion in sales.
Gross profit inched up 3.3% year over year to $7,256 million, while the gross margin contracted 60 basis points (bps) to 32.3%. Operating income amounted to $1,704 million, down 7.8% year over year. The operating margin significantly contracted to 7.6% from 8.7% recorded in the year-earlier quarter.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
LOW ended the quarter with cash and cash equivalents of $1,348 million, long-term debt (excluding current maturities) of $32,876 million and shareholders’ deficit of $14,254 million.
Lowe’s generated cash flow from operations of $8,589 million for the fiscal year. Capital expenditures amounted to $1,829 million for fiscal 2022. For fiscal 2023, LOW expects a capex of up to $2 billion.
In the reported quarter, Lowe’s bought back 10 million shares for $2 billion and paid out dividends of $643 million. In fiscal 2022, it bought back 71 million shares for $14.1 billion and paid out dividends of $2.4 billion.
As of Feb 3, 2023, Lowe’s operated more than 1,700 home-improvement stores across the United States.
Outlook
Management issued its guidance for fiscal 2023. LOW expects revenues of $88-$90 billion. In fiscal 2022, Lowe’s revenues were $97.1 billion.
Comparable sales in fiscal 2023 are envisioned in the range of flat to a 2% fall. The operating margin is expected to be 13.6-13.8%. Management anticipates earnings per share of $13.60-$14.00 for the fiscal year compared with $10.17 earned in fiscal 2022.
Three Top Retail Stocks
We have highlighted three top-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Boot Barn (BOOT - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 0.5% and 526.3%, respectively, from the year-ago reported figures. ANF delivered an earnings surprise of 107.7% in the last reported quarter.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 82.6% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 3.3% and 24.2%, respectively, from the year-ago reported figures.
Boot Barn, a fashion retailer of apparel and accessories, currently carries a Zacks Rank of 2 (Buy). The company has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS suggests growth of 8.2% and 9.1%, respectively, from the year-ago reported figures.
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Lowe's (LOW) Q4 Earnings Surpass Estimates, Sales Rise Y/Y
Lowe’s Companies, Inc. (LOW - Free Report) posted mixed fourth-quarter fiscal 2022 results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. Also, both metrics improved from the previous fiscal year’s quarterly readings.
This presently Zacks Rank #3 (Hold) player’s shares have increased 5.2% in the past six months compared to the industry’s 4.2% gain.
Quarter in Detail
Earnings per share (EPS) of $2.28 surpassed the Zacks Consensus Estimate of $2.21 and rose 28% from the fourth-quarter fiscal 2021 tally.
Image Source: Zacks Investment Research
Net sales of $22,445 million increased 5.2% year over year but missed the Zacks Consensus Estimate of $22,702 million. Comparable sales (comps) inched down 1.5% in the quarter under review. Comparable sales for the U.S. home-improvement business dipped 0.7% in the reported quarter. Pro-customer sales jumped 10%, recording the 11th consecutive quarter of a double-digit increase. Lowes.com sales climbed 5%.
The fiscal fourth quarter had 14 weeks, compared with 13 weeks in the prior-year quarter. The 14th week contributed roughly $1.4 billion in sales.
Gross profit inched up 3.3% year over year to $7,256 million, while the gross margin contracted 60 basis points (bps) to 32.3%. Operating income amounted to $1,704 million, down 7.8% year over year. The operating margin significantly contracted to 7.6% from 8.7% recorded in the year-earlier quarter.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote
Other Financial Aspects & Developments
LOW ended the quarter with cash and cash equivalents of $1,348 million, long-term debt (excluding current maturities) of $32,876 million and shareholders’ deficit of $14,254 million.
Lowe’s generated cash flow from operations of $8,589 million for the fiscal year. Capital expenditures amounted to $1,829 million for fiscal 2022. For fiscal 2023, LOW expects a capex of up to $2 billion.
In the reported quarter, Lowe’s bought back 10 million shares for $2 billion and paid out dividends of $643 million. In fiscal 2022, it bought back 71 million shares for $14.1 billion and paid out dividends of $2.4 billion.
As of Feb 3, 2023, Lowe’s operated more than 1,700 home-improvement stores across the United States.
Outlook
Management issued its guidance for fiscal 2023. LOW expects revenues of $88-$90 billion. In fiscal 2022, Lowe’s revenues were $97.1 billion.
Comparable sales in fiscal 2023 are envisioned in the range of flat to a 2% fall. The operating margin is expected to be 13.6-13.8%. Management anticipates earnings per share of $13.60-$14.00 for the fiscal year compared with $10.17 earned in fiscal 2022.
Three Top Retail Stocks
We have highlighted three top-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Boot Barn (BOOT - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, 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 Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 0.5% and 526.3%, respectively, from the year-ago reported figures. ANF delivered an earnings surprise of 107.7% in the last reported quarter.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 82.6% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 3.3% and 24.2%, respectively, from the year-ago reported figures.
Boot Barn, a fashion retailer of apparel and accessories, currently carries a Zacks Rank of 2 (Buy). The company has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS suggests growth of 8.2% and 9.1%, respectively, from the year-ago reported figures.