Lowe’s reported stronger-than-expected fiscal fourth-quarter earnings Wednesday as the world’s No. 2 home improvement retailer benefited from a strong U.S. housing market and an unseasonably warm winter that lured consumers through its doors.
The North Carolina-based company also raised its sales forecast for the year. Such moves typically drive a company’s share price up but the move comes in a mid-week sell-off in U.S. stock markets that’s pushed equity prices down. Lowe’s said it expects sales for its current fiscal year to rise 6 percent to $62.62 billion, up from $59.07 billion in the fiscal year ended Jan. 29, 2016.
The news comes a day after the company’s bigger rival, Home Depot, posted a record fiscal fourth quarter. Robert A. Niblock, Lowe’s chairman, president and CEO, attributed the positive fourth-quarter results to warmer weather that drove consumers to outdoor products, like lawn furniture and rain gutters.
"In 2016, we will continue to leverage the favorable macroeconomic backdrop for home improvement,” Niblock said in a statement.
U.S. home prices, a measure of improvement in the housing market, was at its highest level since the second quarter of 2007 in the three months ended in September, the latest available quarterly data, according to the St. Louis Federal Reserve Bank.
Lowe’s said sales at established stores rose 5.2 percent in its fourth quarter, above Wall Street’s estimate of 3.6 percent. Net sales grew 5.6 percent to $13.24 billion, which also beat analysts’ estimates.
Net profit fell to $11 million, or 1 cent per share, compared to $450 million in the year-ago quarter. The steep drop was attributed to a one-time event: a $530 million charge for ending a joint venture in Australia.
The price for Lowe's Companies Inc. (NYSE:LOW) shares fell 2.3 percent to $66.35 late Wednesday morning amid a larger market sell-off. The company’s share price fell about 11 percent over the past 12 months and about 13 percent since the start of the year.