Shares of Lowe’s Corporations, Inc. (NYSE: LOW) have been down on Thursday. The inventory has dropped 9% over the previous three months. The house enchancment retailer delivered blended outcomes for the fourth quarter of 2022 a day in the past however regardless of the difficult atmosphere, it stays bullish over the long-term prospects of the house enchancment market.
In This autumn 2022, Lowe’s whole gross sales elevated 5% year-over-year to $22.4 billion however fell wanting estimates. Comparable gross sales decreased 1.5%. Adjusted EPS rose 28% to $2.28, surpassing expectations.
Residence enchancment traits
In This autumn, comparable gross sales for the US house enchancment enterprise fell 0.7% however Lowe’s noticed sturdy gross sales inside the Professional buyer class. On its quarterly convention name, the corporate mentioned the vast majority of its Professional clients seem to have wholesome backlogs. Inside Professional, the corporate noticed energy throughout classes like tough plumbing, paint and millwork. Lowe’s additionally noticed strong DIY demand in core house enchancment classes in the course of the quarter.
Regardless of the macroeconomic uncertainty, Lowe’s stays optimistic on the core drivers of its enterprise – disposable private revenue, house value appreciation, and the age of housing inventory. On its name, Lowe’s acknowledged that shopper financial savings are nonetheless roughly $1.5 trillion larger than pre-pandemic. As well as, the housing inventory continues to age with 50% of US houses over 41 years outdated.
The corporate believes that these components, together with sturdy millennial family formation, the distant work mannequin, and an rising desire amongst child boomers to age in place will show to be helpful for its enterprise. Lowe’s continues to see extra shoppers opting to improve their current houses to fulfill their altering wants. All these components give it confidence within the medium and long-term outlook for the house enchancment trade.
Though its long-term outlook for the house enchancment market stays sturdy, Lowe’s expects residential funding to stay pressured in 2023. The corporate is forecasting a slight decline within the house enchancment market as a consequence of inflation, larger rates of interest and a extra cautious shopper.
For FY2023, Lowe’s expects whole gross sales of approx. $88-90 billion whereas comparable gross sales are anticipated to be flat to down 2% in comparison with final yr. EPS is anticipated to vary between $13.60-14.00.
Click on right here to learn the total transcript of Lowe’s This autumn 2022 earnings convention name